CASH OR CREDIT?

Unlike most things, money is much easier to handle when you have lots of it. Much of what follows is, however, equally applicable to those who can afford whatever they fancy, and those who have to watch every penny.

What follows applies primarily to Europe. India and the United States are dealt with separately at the end.

CURRENCIES

The arrival of the Euro has vastly simplified matters in most of Europe. It is used in the following countries:

Apart from these, the two most important currencies in Europe are the British pound (abbreviated GBP on this site) and the Swiss franc (CHF), which is also used in Liechtenstein. There is, however, plenty more choice:

EXCHANGE RATES -- AND COMMISSIONS

Over 90 per cent of transactions (by value) on the world currency markets are speculative: in other words, they are no more than bets on whether one currency will rise or fall in value against another. This is a disgraceful figure and should give pause even to the most ardent proponent of free market forces, though it is hard to see what (if anything) can be done to improve matters.

The only exchange rates that it makes sense to deal with here are those between the pound, the dollar and the euro. Since I started motorcycle touring in the early 1980s, the value of the British pound against the US dollar has varied by a factor of about two, from near-parity to over two dollars. There's not a lot you can do about this. As a very rough guide, think of GBP 1 as US $1.50. You are quite likely to be out by ten per cent, or more, but it's a quick, easy way to see if a price looks reasonable, or to work out roughly what a room costs. You can work it out in more detail later, if you think it will do you any good.

The euro has varied less, from about US $0.90 to about $1.20, so thinking of a euro as US $1 is again adequately accurate for quick calculations. Likewise, think of an euro as 70p, or a pound as 1.50 euros. It's enough for a rough guide.

The posted rates in newspapers are normally the 'million-dollar' rate for large transactions, and tourist rates are worse. Typically, you pay 5 to 10 per cent more when you buy a foreign currency, and receive 5 to 10 per cent less when you sell it. Rates are sometimes (not always) better if you use a credit card or debit card.

There may also be a separate commission on top of this, whether a flat fee or a percentage. The bureaux de change that say 'No Commission' often make up for this by having an even worse rate of exchange.

CASH

Cash is acceptable just about everywhere, though occasionally I have had people look askance and say 'what about a cheque'. But cash is bulky stuff, and if you lose it, you've lost it for good, unless you can get a bit back eventually on your travel insurance. Credit and debit cards are more convenient for many purchases, and are now more and more widely accepted throughout most of Europe. In the country by country guides I have tried to give some idea of just how useful they are in each individual country.

Even so, you need cash for purchases that are too small to put on a credit card (many places have a lower limit of anything from 6 to 15 euros) and for those places that don't accept credit cards. I carry my cash and credit and debit cards in a 'biker's wallet', the sort that has a chain to fasten it to my belt. This is partly a security measure to make it harder for pickpockets, etc., but much more, it is a security measure against my own absent- mindedness.

Note too that some public toilets still require payment, so even if you plan on hurtling through a country, you can have problems if you are caught short without some small change.

THE HOLE IN THE WALL

The spread of the hole in the wall or autoteller is one of the greatest boons to the traveller. In the last few years, we have found it easy to get money out of a hole in the wall in just about every country we have visited in Europe. This is using English, American and French cards: all seem to work about equally well, everywhere.

A bank debit card that allows access to your current account is all but indispensable, but note that some so-called banks demand notification if you plan to use your debit card overseas. Check the symbols on your card and on the machine itself, because not all auto-tellers are hooked up to all cards. The most useful ones are Eurocard and Plus, though Honor and Interlink are worth having. Before you leave home, ask your bank how good their network of international cash-points is. Ask for details: they'll all tell you they're good. The ones with the best networks -- not just Network Albania and ZzzyzStop -- will generally have a pre- printed brochure. This is especially important for Americans venturing overseas.

It is generally worth going for a good-sized wodge of cash, up to the maximum that your bank will let you have, simply because you pay fewer withdrawal fees that way. These are rarely substantial, but on the minimum possible withdrawal they can approach 10 per cent of the amount withdrawn, while on the maximum possible, they are less than 1 per cent. Also, you don't know when you're going to find the next working cash machine.

The only times to go for less are when you don't have the money in the account; or you don't expect to spend all that much before you return home; or you are reasonably convinced that the exchange rate is going in your favour.

You often get a better exchange rate from a hole in the wall than you do from a bank, and you almost invariably get a better rate from either than you do from a bureau de change.

CASH AT THE BANK

Most debit cards and credit cards allow you to withdraw cash from banks, on presentation of suitable identification (the passport is ideal). You usually get quite a good rate this way, but if you get a cash advance on a credit card there is normally a percentage fee at the time of withdrawal and of course you start paying interest when the period of 'free' credit is over.

BUREAUX DE CHANGE

Exchanging cash at a bureau de change, whether at home or abroad, is an expensive option and also saddles you with carrying a good deal of bulky money around.

CREDIT CARDS

Credit cards are very nearly as useful as debit cards, and indeed, they can be more useful: a few primitive debit cards (especially from United States banks) do not also function as credit cards, so there are times when it's cash, credit card or nothing.

An added advantage of credit cards is that if things go wrong, the credit card company will usually help you to sort things out. Thus, for example, it is a good idea to put airline tickets or ferry fares on your credit card, as a sort of extra insurance.

Again, a (very) few so-called banks may require advance notification if you want to use your credit card overseas. Call the toll-free number on your card if you are in any doubt.

Note that in France, where the petrol (gas) stations say '24/24' they accept only French cards: you will not be able to get petrol outside hours with any other sort of card. The same is true of a very limited number of other establishments in France. Usually, though unfortunately far from always, a large sign is posted to this effect.

CHEQUES

Most cheque books are useless, or next to useless, outside their own country, though increasingly, cheques on euro accounts are accepted across borders. Running a euro account in the UK or USA is a horribly expensive business with very few advantages: I really wouldn't recommend it.

TRAVELLERS' CHEQUES

With the rise of the hole in the wall, the only reason to use these is if you don't have a debit card that allows access to a hole in the wall, or if you're really paranoid about insurance. We haven't used them for years in Europe.

FOREIGN MONEY

In most of Europe, people accept euros, even in many countries that aren't part of the euro-zone. You cannot however rely on it, and you will often get a pretty poor exchange rate. It is better, it at all possible, to use the local currency unless there is an accepted parallel currency, such as the US dollar in Russia.

It is not a good idea to proffer dollars or pounds sterling in the euro-zone. It is unlikely to be accepted; it is seen as a symptom of the 'ugly American' or 'arrogant Englishman', and greatly increases your chances of being ripped off. If it is accepted, you are likely to get a dreadful exchange rate.

THE UNITED STATES

American financial institutions are surprisingly unsophisticated by European standards and tend to lag several years behind Europe when it comes to technical and financial innovations such as debit cards, debit cards that double as Visa cards, and cards with built-in microchips. Even so, European cards work pretty well in the United States, so it shouldn't be a great problem.

INDIA

Credit cards are accepted mostly in the bigger, more expensive places that cater principally to western tourists. Besides, prices are so low in most of India, even in those hotels and restaurants frequented by the Indian middle class, that there's no great hardship in using cash.

Getting hold of the cash is another matter. Cash advances and withdrawals tend to be very time consuming indeed, and so for that matter do straight currency exchanges, at least if you go to the banks. It is by no means unusual to spend an hour or two at the State Bank of India, or any other of India's overmanned banks, trying to change money.

The best idea, therefore, is to change cash or travellers' cheques at your hotel. You may get a slightly inferior rate, or (somewhat to our surprise) you may get a slightly better rate. Even if it costs a bit extra, the saving in time, hassle and bureaucracy is well worth it. If you decide to carry cash, notes of modest value -- GBP 20 or US $20 -- may be easier to change than notes of higher denominations.

The usual way in which money is presented from a bank or bureau de change in India is as a brick of often filthy notes, held together with two monster staples or even a bit of stitching. The brick is so thick that it makes sense to split it and carry part of your money in an everyday purse or wallet that you use to pay for small purchases, and part in another concealed purse or wallet that you use to pay for hotel rooms and the like. Petty crime is not really a great problem on India, though, and it is widely believed (not without justice) that you are at greater risk from other foreigners, especially ultra-low-budget backpackers, than you are from Indians.

In order to change money back when you leave the country, you will need proof of exchange, so save your exchange receipts. If you don't have enough, you may very well be prevented from re- exchanging the money, and because you can't take rupees out of the country, they will be confiscated. Indian politicians keep talking about full convertibility of the rupee, but if past performance is anything to go by, it will be a long time coming. There is more about this, and about the airport tax that you have to pay when you leave, under the (paid) country heading.

Black market exchanges are not a good idea. Not only is there plenty of scope for things to go wrong, but the rate isn't even that good any more (it was, 20 and more years ago). Among the traditional scams are a 'brick' with real money on the outside and waste paper on the inside, and a fake policeman who arrests you both and confiscates the money. Of course if you demand to go to the police station, you will be arrested. The fact that he will probably be arrested as well is not much consolation.

INDIAN EXCHANGE RATES

For some years, the Indian rupee has hovered around 70 to the pound sterling and 40-50 to the US dollar. Again, these figures are good enough for a rough calculation.

An interesting and somewhat confusing point about Indian currency is that Indians count large sums in lakhs and crores. One lakh is 100,000 and one crore is 10,000,000 -- millions don't get a look- in. One lakh rupees (or one lakh of rupees -- both terms are used) is therefore about GBP 1400 or US $2000.

DISCLAIMER

This information has been verified as far as possible but should not be taken as definitive. You alone are responsible for your safety on a motorcycle (or elsewhere) and should always ride and behave accordingly. Click here for the Official Health Warning.

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last updated: 30/10/03

© 2003 Roger W. Hicks