Part 2…Foreign currency while traveling…The most economic means of handling leftover currency…

We have a better view of sunset during this second stay in Bali.

“Sightings on the Beach in Bali”

Motorbikes have to navigate crossing the river to continue on the beach.

If you had an opportunity to read yesterday’s post, “Part 1…Foreign currency while traveling” today’s post will make a lot more sense. Please click here if you missed it.

Sure, it’s a lot of mumbo jumbo about foreign currency and ways we’ve found to save money in regard to exchange rates and currency acquisition. For those of you who are our beloved “armchair readers,” we hope we haven’t bored you with this information which may be meaningless to you. 

Perhaps, you could share the above link with friends and family who may be traveling outside their home country. We often hear from our readers who’ve shared our travel information with others and we’re so appreciative of each and every one of you for doing so.

One of the challenges of using foreign currency, particularly for us traveling to so many countries, is avoiding leaving a country with a wad of foreign currency or even the annoyance of a handful of small bills and change.

Gorgeous flowers blooming by the pool.

There are a few simple steps we’ve taken when we get currency at an ATM, not only the first day when we’ve entered the country but at other times along the way when we’re needing more.

Many ATMs have restrictions on how much currency a user can take at any given time. It depends on the risk of theft in the area, banking laws and how much currency the machine can manage. It’s also based on how frequently the stores of currency are restocked.

In Bali, after several stops to ATMs in a variety of locations, we’ve found the restrictions for currency distribution are more often in lesser amounts than the predetermined amount we’ve established with our bank in the US (for security reasons). 

As a result, for us, having multiple bank accounts enables us to continue to enter another debit card to continue to collect more currency. However, most travelers (for pleasure) may only have one or two accounts. If you have a second account, say a savings account, you can set that account to handle also ATM transactions.

Sun filtering through storm clouds.

In the US there are regulations of how many transactions you can move “out,” not “in” to a savings account. It’s important to know this if you’ll be using a savings account frequently for currency withdrawals. 

For those who generally don’t use ATMs, always verify you have sufficient funds in the account you’ll be using to acquire currency. There’s no margin of error here of which most are well aware if regularly using ATMs. 

Surprisingly, we’ve met many travelers, especially those who haven’t quite stepped up to modern technology, who’ve never used online banking or even ATMs. 

Before they travel, they physically visit their banks make a large cash withdrawal to handle what they assume will be sufficient for their entire holiday/vacation. Often, this requires advance notification for foreign currency. As a result the travelers ends up carrying huge amounts of currency earlier than needed. This is itself is a security risk. 

Another sunset view.

We’ve encountered travelers with only one credit card which may have a limited amount of credit available or remaining after other expenditures. This could be a disaster when traveling, especially in addition to not having set up their bank accounts to use ATMs.

Once they arrive at their destination if they haven’t already done it at their bank, they exchange the currency to that of the country(s) they’re visiting at a currency exchange facility or at their hotel/ship, etc. Again, we can’t encourage you more than to avoid currency exchange facilities. See yesterday’s post for more details.

We only use online banking. We can’t walk into our bank. We’ve established an added layer of security using a VPN (virtual private network), an app for which we pay an annual fee to Hotspot Shield. However, if you go to their site here you can sign up for a free account to use while traveling which is available for laptops, tablets and smart phones. 

We rarely edit our photos. There’s simply too many to take the time. The change in sunset colors appears exactly as we took these photos.

If you use the Hotspot Shield free account, you’ll have a bar at the top of any webpage encouraging you to sign up for the paid account. Ignore this while traveling. It’s quick and easy to uninstall the app when you return to your home and the bar will disappear.  We use the annual fee based app (without the bar) since we’re always traveling, but this app has security benefits you may appreciate even if you don’t travel.

Depending on the level of security offered by your bank, in most cases you can  view your accounts online from anywhere in the world without using a VPN if you have some type of security software. This is important to check into sooner rather than later. 

Do not conduct banking an any public unsecured WiFi hotspots!  Often cruisers rush to the free Wi-Fi locations at any given port of call and conduct business. This is very risky!

Another colorful view.

Anyway, on to the most economic means of handling what could prove to be “leftover currency” which we always make every effort to avoid. Early in our travels, before we were as diligent as we are now, we left the country of Kenya with KES 1000. Kenyan Shillings are impossible to exchange outside of Kenya. There were only valued at US $9.88, IDR 128,751 but we could have easily ended up with considerably more. 

It required that single experience to teach us that we’d never leave a country with their currency stuffing our wallets unless we knew we’d have a specific use for it such as Australian dollars, which we’ll continue to use over the next six months until we head to the US to visit family and friends. (Wow! We can’t believe we’ll be on our way to the US in six months!)

We’ve since learned that before we make our first ATM visit in a new country we estimate as closely as possible how much we’ll actually use. For longer stays, we may get cash as needed on multiple occasions. 

Recently, with lots of clouds and rain, we’d taken few sunset photos.

For short stays such as when we were in Singapore for one week using the SGD, Singapore dollar, or when in any country for any period of time, we carefully calculate our needs for the stay asking ourselves the following questions:

1.  Do taxis and driving services accept credit cards?
2.  What is the tipping policy in the country?  Will we need currency for tips? What will we need for additional cash tips on cruises, at resorts/hotels or vacation villas?
3.  Will we be able to pay entirely for our hotel/resort stay using a credit card?
4.  Do we have sufficient, appropriate currency for making purchases at shops/restaurants located at various ports of call when cruising? Find out in advance as to the currency used at a particular port of call. Use a local ATM. Don’t exchange the cash in your wallet.
5.  Have we signed up for any private tours or charters or sightseeing expeditions that require cash payments at the time of service?
6.  Do we have sufficient cash for incidentals such as a market, pharmacy, a coffee shop or food at a roadside stand?
7.  Do we need currency to pay for data/phone SIM cards?
Based on your use of services and products this list could go on and on. It’s not a bad idea to make a note of estimated amounts you may spend during your holiday/vacation. 

During every stay, we check how much currency we have remaining, asking ourselves these same questions. In the case in Bali, as mentioned in yesterday’s post, we use more currency than in any other country we’ve visited to date.

Local farming structures with a few nearby cows.

With whatever we have left which if carefully planned won’t be more than we intend to use to pay tips, drivers and a possible beverage at the airport. Recently, while at the airport leaving Vietnam, we had an extra US $15, VND 334,553, IDR 195,563.  We used the leftover currency to purchase nuts for the long flight in the event the food wouldn’t meet my dietary restrictions. It didn’t, and those nuts were a lifesaver for me while Tom ate both of our dinners on the flight.

While we lived at Trinity Beach, Australia, we decided to see if we could survive three months without ever using visiting an ATM or using any Australian dollars. Instead, we entirely used credit cards. We never needed a single AU dollar! That was the exception.  Australia is much like the US that way, credit cards are used everywhere.

There you have it folks, our detailed analysis of currency while traveling. If we haven’t addressed an area of interest to you, please feel free to write in the comments section below. We’ll be happy to reply with 12 hours, barring no power or Wi-Fi outage!

Have a great day!

Photo from one year ago today, October 13, 2015:

Breadfruit was growing in the yard in Fiji, a popular item in the islands. Here’s a good article on breadfruit. We’d love to try this which is the size of a grapefruit, but it contains 26 grams of carbohydrates and 11 grams of sugar in 1/4 of a fruit. For more details, please click here.

Part 1…Foreign currency while traveling…

Often we see statues in the centre of roundabouts which are more frequent than traffic lights in Bali.

“Sightings on the Beach in Bali”

Although they are smaller buffaloes than the more frightening males, these young boys have a big task to accomplish when they take them to the river.

Most countries have their own specific currency, which is commonly used with the exception of a few countries, such as the US dollar and the euro which are accepted in several countries as shown below.

For the US dollar:

“Countries that only use foreign currency. US dollar: Ecuador, East Timor, El Salvador, Marshall Islands, Micronesia, Palau, Turks and Caicos, British Virgin Islands, Zimbabwe. The US dollar is the most widely used currency in the world, with many countries employing it as an accepted alternative to their own currency.”

For the euro:

“The euro is the sole currency of 19 EU member states: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.”

Farming a wide array of crops is a big deal in Bali.

As we continue our travels around the world, we often need to access the local currency when we arrive. In many cases where we’re hiring a taxi or driver from a port or airport, we’ve often had to stop at an ATM in order to get cash to pay the taxi fare when many taxis/taxi companies in certain countries don’t accept credit cards. 

Overall, we’ve found most countries do accept credit cards for store purchases including supermarkets. Local currency is usually required for farmers markets, roadside stands and other small business operations.

This large red insect which appears in the shape like a grasshopper which could potentially have poisonous properties based on its red color.
Many have asked how we handle “exchanging” US currency to the currency of the country we’re visiting. At this point, we don’t carry any US currency other than enough for additional cash tips we offer certain staff while on a cruise. (These are over and above the tips added to our bill or per a promotion, included in our fare).

Essentially, we don’t “exchange” currency for another currency.  The cost of doing so is high with exchange rates at local facilities, including airports, shopping malls and near ports of call have proven to cost more than we’d ever pay using the most simple of all:  the local ATM.

Nor do we use regular credit cards to obtain cash. Often, the credit card companies encourage the card holder to use their credit cards for obtaining cash and foreign currency while traveling done so with the intent of them collecting often hidden and outrageous fees.

Unfortunately, most credit card companies immediately begin charging interest on the cash advance. We figured this out long ago when we first began our travels and never use credit cards for cash advances.

A government building.

These fees vary for each credit card company making it impossible for us to do a detailed analysis and comparison.  Also, based on one’s credit rating and/or types of credit cards, the exchange rates may vary from card to card.

Instead of using credit cards, we use debit cards to obtain local currency. To protect against a risk of a theft of substantial funds while at an ATM, we’ve set limits with our bank in the US, that we can only obtain a certain amount of cash on each of our four debit cards on four separate bank accounts. 

This enables us to use each card for the maximum amount in the event we need an especially large amount of cash on a particular day. Based on the fact we use credit cards to pay for flights, cruises, vacation rentals and general expenses, we only need a given amount of cash for incidentals, such as here in Bali.

Coleus plants are common in shady areas in Bali.

Generally, Bali is a “cash & carry” location for the vacation home traveler. Credit cards aren’t accepted from foreigners at most locations except hotels, resorts, fine dining establishments and a variety of more substantial business entities.

Our requirement for large sums of cash have been higher in Bali than in any other country we visited to date. Each evening after dinner we give the two Ketuts cash for the ingredients for the next night’s meals. Also, we pay cash for use of the vehicle, a driver, incidentals and eventual tips when we leave which counts into the millions of Indonesian Rupiah.

Many varieties of bananas are found throughout the world. Those grown in Bali tend to be smaller than in other countries.

We usually request the same meal two nights in a row (a habit we acquired when cooking for ourselves to cut down on daily prep time) and they collect the sums for the actual cost of the ingredients with a small fuel charge, paid in cash every other day.  (The cost for the meal preparation is included in our rent and of course, we leave substantial tips before departing).

Although the average evening’s meal is rarely more than US $12, IDR 156,600 (often less), with the denominations of Indonesian Rupiah as huge as they are: IDR 1,000,000 to US $76.63, we must keep enough cash on hand to avoid traveling back and forth to the ATM every week, incurring additional transportation expenses. 

Obtaining cash from an ATM is not free. Each machine has its own local fees which may vary from village to village. Plus, our bank charges a flat US $5, IDR 65,250 per ATM transaction when it’s not their own machine. 

There’s an apotek (pharmacy) every few blocks.

In most cases we use one debit card on a visit to an ATM. Many ATMs charge a fee of approximately US $2.50, IDR 36,625.  In each case we’ve received cash it’s in stacks of IDR 100,000, (US $7.66). This results in a lot of paper to handle when requesting millions of rupiah.

Our average cost per maximum transaction per debit card, including ATM fee and our bank fee is a total of US $7.50, IDR 97,620, which averages slightly under 1%. Had we taken the time to visit an exchange facility, we’d have lost considerably more than 1%.

Besides, visiting an exchange facility leaves the typical customer wondering how much they actually lost when they may not have that day’s actual exchange rate in hand, other than an often arbitrary number (we’ve noticed) posted at the facility.

On January 15, 2016 (click here for our link) while on the Celebrity Solstice on our way to New Zealand, where we were staying for 89 days, we inquired as to exchanging some intentionally leftover AU (Australian dollars) for NZ (New Zealand dollars). We were shocked by the high fees the cruise ship required to make the exchange which totaled 23%, a far cry from an ATM exchange of under 1%.

Rooster, chickens and a bucket. Notice the flip flops near the bucket. Most Balinese wear some type of flip flops even while riding motorbikes. Shoes of any type aren’t worn indoors.

As you can see, we’ve carefully analyzed the best course of action for us and possibly for other travelers seeking local currency.  However, each individual case may vary based on charges from ATMs, debit or credit cards you choose to use. 

Prior to traveling to foreign countries its a good idea to spend a few minutes contacting your bank or credit card companies to determine the charges they may incur for an exchange rate.  Purposely, early on our travels we chose only credit cards that didn’t charge any excess fees when we used the cards in foreign countries to make purchases.  

We avoid using regular credit cards at ATMs when each bank may levy outrageous fees for “getting cash on the card.” We only use a debit card taking cash from one or more of our accounts (if necessary).

With this post too long for one day, we’re continuing Part 2 tomorrow where we’ll explain our plans for leaving each country without any “leftover” currency (unless we need to use it elsewhere) to avoid losing so much in fees to exchange it back to our home country’s currency. Please check back.

Please note:  Due to WiFi issues today, we’re unable to edit line spacing.

Photo from one year ago today, October 12, 2015:

Boats at the marina in the village in Savusavu, Fiji as we began a sightseeing outing. For more details, please click here.