Handbook

Money

How Much To Take

It is increasingly difficult to travel cheaply. Inflation has hit hard everywhere. Inexpensive is characterized as $20 per day. To spend as little as possible means that you will stay in hostels and eat in market places. You spend more time to save money. A higher budget allows more freedom and choice in accommodations, restaurants and entertainment. Once you have determined your travel budget, plan to live within it and take along a $100 emergency fund. You may not spend this money, but it will be there should you need it, and you will avoid the hassles that come with being stranded abroad. Cutting costs also depends on where you go. Switzerland, Scandinavia and Japan are most expensive. Travel in some part of Asia, Africa and Latin America can be much more economical than Western Europe. For detailed information on costs, consult student guidebooks.

Currency Exchange

American currency can be exchanged for foreign currency at most international airports prior to your departure, at the international airport of your destination, and at most major banks and railroad stations abroad. It might be wise to exchange a small amount of money prior to your departure in order to have some cash-on-hand upon arrival at your study abroad location. Should you choose to do this, be sure to exchange your money at one of the various bank branches at the airport. Do not exchange currency at hotels, restaurants, or retail shops: the exchange rate generally will be outrageous. Banks and bank windows often can be found both in airports and railroad stations abroad. They will afford you the fairest exchange rate available. You can expect to pay commission (which varies from one country to another) every time you exchange currency; in some countries the commission is based on a percentage of the amount you exchange, while in others there is a flat fee regardless of the amount of the transaction (in the latter, of course, it is to your advantage to exchange larger amounts to avoid repeated visits to the bank window, although this necessarily means that you will be carrying more cash than might be advisable; you will need to find a happy medium between the risks of carrying large amounts of cash and paying repeated bank commissions for exchange transactions).

The key to successful money exchange is advance planning. Try to anticipate how much you will need for a particular country. It is costly to convert all you have to a new currency, because each time you convert, you pay a service charge. Remember to exchange only as much as you think you will need for a particular country. It is not possible exchange coins once you move to another country.

Remember to have your passport with you as identification each time you exchange money.

Fluctuation is the key word in currency exchange today so rely on information that is current. The New York Times carries a daily list of exchange rates. Rates are published in the International Herald Tribune and other newspapers abroad. Once abroad, shop around at local banks for best rates. Rates are generally posted in bank windows. Published currency guides are useful in order to learn the denominations of a foreign currency but such guides never can be completely up-to-date in their conversion tables, since these depend on the exchange rate which can fluctuate daily. You can check the exchange rate before your departure by visiting the following web site: http://xenon.xe.net/currency/.

Traveler's Cheques

It is not recommended that you carry large amounts of cash with you. Traveler's cheques are the safest and most convenient way of carrying your money. Lost or stolen cash cannot be replaced; traveler's cheques can be refunded. Be sure to keep a separate record of the serial numbers of your traveler's cheques. It would be best to have three copies of these numbers. Should the cheques be lost or stolen, you will need to have these numbers available in order to obtain a refund.

Traveler's cheques are available in various denominations of various currencies (e.g., American dollar, British pounds, French francs, German marks, Australian dollars) and can be obtained at most banks. The major companies dealing in traveler's cheques are Citicorp (First National City Bank), American Express, Thomas Cook, Bank of America, and Visa. Often there will be a 1% commission for the purchase of traveler's cheques. Keep in mind that while purchasing traveler's cheques in small denominations means carrying a bulkier package of cheques with you, it also means that you will have greater control over the amount of currency you will receive each time you cash one or more of these cheques.

Credit Cards

Possession of an American Express, Visa or MasterCard, with your name imprinted on it will be helpful should circumstances make it necessary for you to acquire emergency funds while awaiting the money from home.

With American Express you can go to one of their offices (commonly found worldwide as they also act as travel agents) and cash a personal check for up to $1000. Only the first $50 will be provided in cash, the balance in traveler's cheques. If you have no personal checks with you, American Express can provide you with a blank check if you can provide some pertinent information such as your personal checking account number and your banking institution's name and address.

With a Visa or MasterCard you usually can obtain a cash advance against your account from a foreign bank. The bank will take your passport number and your credit card number and phone them both into a central computer to prevent you from exceeding the established limit by repeating the transaction at other banks. Visa is probably the most recognized card worldwide.

Most credit cards now can be used like an ATM card, with limitations on daily withdrawals. This is often the cheapest way to get money with the best exchange rate. Make sure you have a PIN for your credit card and check what your daily limit is and your overall credit limit.

Many students prepay their credit card or have someone at home put a positive balance on it so they can withdrawal money without a daily interest charge that comes with a cash advance.

Credit cards also can come in handy, of course, when you wish to charge a purchase to your account rather, than, pay cash. Keep, in. mind, however, that not all merchants abroad accept credit cards, regardless of the name brand: many of your gifts and/or souvenirs might be obtained at small shops and bazaars that do not provide charge services.

For your information, the amount of your ultimate bill will be based on the exchange rate on the day that your bank and credit card company processes the transaction; if the merchant with whom you charge your purchase is slow in submitting your charge slip, the bill could be a bit different from what you might have expected.

In the case of all financial transactions abroad, be sure to have adequate identification with you (i.e., your passport).

Automated Teller Machine Cards (ATM)

As more countries offer automated teller machines using your ATM card is becoming the most convenient way to get money while abroad. You don't need any form of identification to use these machines, nor will you be charged commission. Check with study abroad returnees from your host country to see if ATM machines in the country where you will be studying will accept U.S. ATM cards.

If you are able to use your ATM card overseas, you will most likely be charged a service fee by the bank who owns the machine and by your own for using another bank's ATM, but it won't be any higher than you would be charged for the same procedure here in the states. You will receive foreign currency from the machine, which, as with credit card purchases, will be converted in your account according to the exchange rate on the day you withdrew your money. Keep the 1 800 number on the card somewhere safe so you can cancel the card in case of theft. This service is not available with all ATM cards, so check with your bank to make sure that your card and personal identification number (PIN) will work in your host country.

Transfer from Home

Should you run short of cash while abroad, money can be sent from home in a variety of ways:

• As discussed above, if you have enough credit or have not reached your daily limit, always consider using your credit card or ATM card. This will be the best rate of exchange and the most economical.
• If neither your ATM or credit cards works, the quickest way, although the most expensive, is by cable transfer from your American bank to a bank abroad. You might want to visit your hometown bank before your departure to obtain a list of the overseas correspondent banks to which money can be transferred by cable and to let them know who is authorized to initiate cable transfers on your behalf. To pick the money up at the overseas bank, you will, of course, need identification (i.e., your passport). For your information, it may be necessary for your hometown bank to process cable transfer through a major, internationally recognized U.S. Bank which in turn probably will have to deal with a comparable internationally recognized bank overseas. The correspondent bank abroad can then complete the transfer to a local bank in your study abroad location. This will take some time.
• American Express money orders also are relatively fast. Transactions must be initiated at an American Express office in the U.S. and completed at one of their branch offices abroad, either of which could prove inconvenient depending upon their location. American Express can cable money from some of their American offices to one of these overseas offices, where it can be picked up, again with appropriate identification. Since not all American Express offices prepare money orders or cable money, it would be wise to call your local American Express office for the location of offices that can provide these services.
• It is also possible to obtain from an American bank a foreign currency draft drawn against a recognized bank in the foreign country. This draft can then be sent to you (by registered or certified mail) for cashing abroad.
• Should you prefer receiving a bank draft in American currency, cashier's cheques drawn against a major U.S. Bank (e.g., Chase Manhattan) probably can be obtained from your hometown bank and forwarded to you abroad (again registered or certified mail). This however, may prove to be a relatively slow way of obtaining the money you need, for once the cheque has been received you will have to wait for the foreign bank to confirm the cheque's validity before they will cash it.
• Personal checks drawn against your local hometown bank will virtually be worthless in most instances.