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What kind of money should you bring? The short answer is travelers checks. They are the safest because they can be replaced if lost or stolen. You can change them into local currency at most banks and changing houses around the world, but only during their business hours. Travelers checks often cost money to buy (typically 1%), but if you look around, you can probably find some way to get them at no charge -- through your bank, Automobile Association, or if you're an American Express member.
The check brands most reliably honored throughout the world are American Express and Thomas Cook, and the only currencies to consider for Third World travel are US Dollars and (a distant second) British Pounds. The travelers checks of other large banks (Bank of America, CitiBank, etc.) will be honored in most cities but perhaps not at every bank, and you may find some more remote areas where you have trouble cashing them at all. Other off-brand or local bank travelers checks are fine in your own country, but will get you nothing at all in Timbuktu.
You will also find many places where you may have a great deal of trouble cashing travelers checks in Deutchmarks, Yen, Francs, etc.; and then the rate will likely be less favorable than with dollars. But you can certainly use these in more modern places and major banking centers like Hong Kong, Australia, etc.; so if you don't live in the US, you could take some of your local currency checks along to avoid the exchange rate fees when you buy them; just find out which banks will honor them. You could try to take into account how the value of the dollar is expected to change over the course of your trip in comparison to other currencies, but taking nothing but Swiss Francs is probably asking for trouble.
Most of the time you will be staying long enough and spending enough in a country to change 100 dollars at a time (especially for two or more people), so keep your check count low with mostly $100 checks, and some fifties. Loads of twenties just fill up your money belt unnecessarily, but you might find use for a few over the course of a trip. If you just need a little money before leaving a country, use some of your cash (see below).
If you are planning to take a large amount of money in travelers checks -- several thousand dollars to last you for a while -- it is very useful to get some large $500 checks, because they don't take up so much room. I know this works with American Express because I have done it a number of times. When your other checks grow short, just drop into an American Express office and they will exchange your $500 checks for lower denominations at no charge. Does this really work? Well, there are probably a few places (India) that want to charge you, but they should not, and I have pulled this off without a hitch in some surprisingly funky American Express offices (Belice City and Colombo, Sri Lanka).
In many countries you have the option of changing your money at banks, legal money exchange shops, and maybe surreptitious black market dealers. There are a number of countries with "gray markets" for currency. In this case, the banks will only give you the "official" exchange rate, which no one ever uses -- these rates are only used for import and export to protect the local economy. But perfectly legal money exchange shops will give a much better (the real local) rate, and they will change travelers checks at good rates. In this case, you are very unwise to use the banks, and the tellers will often tell you so.
There are other countries where the rates at banks and exchange shops are quite similar, but the official bureaucracy and paperwork of changing travelers checks at the bank is incredibly cumbersome, while you can change them at a legal money changer just by showing your passport. But you may still need to compare the rates and fees (does the exchange shop charge $2 per check?) and make your own decisions. And you will need to learn these situations in each new country you visit.
Cash
Now, the longer answer is that you will definitely want to carry some amount of (US$) cash with you as well. You will sometimes need this cash instead of travelers checks because:
In a few countries, the paperwork for changing a travelers check is ridiculously cumbersome, while cash is changed in the wink of an eye with no paperwork. In many places you may get a slightly better exchange rate at banks for cash, but in others travelers checks get a better rate!
For changing large amounts of money on serious black markets, $100 bills often get a better rate than smaller bills. But there will be plenty of times when you just need to change or use 20 or 5 dollars, and even a few 1's can be useful sometimes. Keep in mind that every once in a while (at the worst possible time) someone starts passing counterfeit 100's (or 20's), and all the money changers stop accepting them for a few days. (This occasionally happens even with travelers checks in some more remote places.)
How much cash you should have at any time depends on how much you will need it versus the danger of getting it stolen. If you're not planning on serious dealings in black markets, then $100 cash in various denominations should be plenty for your few late night and last-minute cash needs on a short trip. Personally, I'd need a pretty good economic reason (black markets) to be carrying around more than $200 or $300 in cash.
But be aware that you cannot just go into any bank and get a new supply of US Dollars cash. In fact, there are very few countries in the Third World that allow you to buy dollars, and then in limited quantities. That is to prevent all their citizens from buying (the much more stable) dollars and exporting them to bank accounts in Miami or Zurich, draining the local economy of its capital.
The few countries where you can buy dollars are not the ones (with black markets) where you will need to use them; so some advanced planning is needed. If you happen to be passing through places like Europe, Australia, Japan, or the US, along the way, you will be able to replenish. Otherwise you have to keep your eyes out for a Bank of America (like in Ecuador and Nicaragua), or else find other travelers with too much cash who are willing to sell some. That's why you may end up carrying a bunch of cash around for months just so you'll have it when you get to a country where you'll really need it.
Credit Cards
I can recommended that you carry a major credit card and use it only -- well, mostly -- for emergencies. Visa and Master Card are the most generally accepted by banks. If you get in a bind and lose (or spend) all your money and/or your ticket home, you can get a cash advance with your credit card and carry on with your trip, or at least charge an air ticket to get you home.
If you use your credit card for purchases, it tempts you to spend way too much money in places that take credit cards -- fancy hotels and gift shops -- which are not the places you should be spending all your time in. However, a good splurge now and then can be very worthwhile -- like a special adventure tour or renting a car for a couple days to get to Timbuktu.
The other main drawback with credit cards is that someone has to pay the bills at the end of the month! If you do not already have someone designated at home to receive and pay your bills, this will be a big problem. One good solution is to have a bank account that is tied to your credit card, and to have your credit card bills automatically paid out of that account! Often you have to have a large deposit to get this kind of service, but it could work out to be convenient. Otherwise, you have to keep track of what you owe, and regularly send in checks to the card company back home; this can be much more trouble than it sounds like.
Credit cards are one way to get more money from home. Although you will very seldom find ATM (automatic teller) machines in the Third World, you can get cash advances on your Visa or Master Card at banks throughout the world. In most reasonable countries it only takes a few minutes, worst case overnight. But this is somewhat expensive, usually with something like a 2% fee from the bank, plus you start paying credit card interest on the money from the day you take it out! If the immediate convenience outweighs the costs, then this can sometimes be a reasonable option.
One of the easiest (and cheapest) ways to get money from home is at American Express. If you have an actual American Express card, you can write a personal check (on your bank account at home) for up to $1000 every three weeks of your travels. With the gold card you get more, at least $1500 or maybe $2000. Most Amex offices charge a flat fee of just a couple of dollars for this service, but a few (India) hit you for much more. This is an easy way to regularly get money right out of your own bank account, while it earns some interest in the mean time. You just need a supply of personal checks with you; you don't have to "pre-register" your account numbers or anything. If your check bounces, the charge just goes on you Amex card. Of course, you have to have paid the normal annual ($75) card fee for these convenient Amex member privileges. Unfortunately, Eurocheques and Encashment Cards are no good except near Europe.
Remember I told you that you cannot often receive US dollars in cash; and then it is limited to maybe $100 or $200 dollars. When you get a cash advance on your credit card or when you cash a personal check at American Express, you can usually get your money in local currency, or in travelers checks, or both.
Then remember that you always pay a little "fee" each time you buy or cash travelers checks overseas, even if the fee is hidden in the difference in the exchange rates for buying and selling dollars. It is important to realize that even if you buy US dollars travelers checks with your US dollar cash advance (or personal check), your money is usually exchanged twice -- dollars into local money, then local back to dollars -- and you pay the difference (the 'spread') between the 'buying' and 'selling' exchange rates. This can be another 1% to 2% extra (in addition to any up-front money-transfer fees charged by the bank), so you may need to receive $508 (or more) "from home" in order to buy $500 in travelers checks.
Therefore, you can save a little money by getting as much of your transferred money as you can use in local currency. This means that you should get your new money "from home" soon after arriving in a country, and before you've already changed much money; then get as much local currency as you feel comfortable carrying around, to last you for awhile. You've only paid the exchange rate "fees" on this money one time, while if you had to cash one of your new travelers checks, you'd pay the exchange rate overhead three times! -- once when you received your cash from home and it was converted into local currency, again when this money was immediately used to buy dollars travelers checks, and a third time when you later exchange that travelers check for local money in any country except the US.
The worst way to get money from home is the old fashioned way. You phone or telegraph your bank back home to "wire" money in your name to a certain bank near where you are; then you wait for it to arrive. "Waiting for Money" was the classic activity of countless travelers -- camped out on free beaches for weeks (and weeks) at a time, spending nothing because they had nothing. First you must find the right bank and get the information from them on where to send the money. Then (preferably) phone your bank back home to send the money. In reasonable countries it may take only a day or two and you are on your way, but in others it can really take weeks and weeks, and sometimes the money just never does show up. When it does, you still get charged a fee at both ends.
One of your important preparations is to plan where you will pick up mail from home, and providing the correct addresses and some kind of schedule (which will change) to your family and friends.
There is quite a bit of detail about how and where you pick up mail on the Road in my travel tips section on Daily Life, under "Mail". You should read that section before deciding where you are going to pick up your mail.
I recommend that you get your mail sent to Poste Restante (General Delivery at the post office) or American Express. If you choose American Express, then you should visit (or write) an Amex office to get the latest booklet listing the addresses of all their overseas offices; they change often. It lists which ones have mail service -- especially important when there is more than one office in a city.
For Poste Restante, tell your friends to just address mail to "My Name, c/o Poste Restante, General Post Office, City", or "Central Post Office". Remember (see the above links) that "My Name" should be exactly two words: your first name and last name -- no middle name, no Ms. or Mr., no Jr., Esq., or other cuteness that will get your mail hopelessly lost. Then you hope that the GPOs will be convenient for you, but this also applies for Amex offices.
If you are only gone for a few weeks or a month or two, you can just let your mail wait for you. But if you are heading out on a serious trip of a number of months or years, then it will be very, very handy to have someone at home to take care of your business for you. This must be someone you trust and who cares enough about you to perform this thankless job; probably one of your relatives.
The first thing they must do is get your mail, and watch for bills that need paying. Hopefully, there will be (almost) none, but if you're planning to make regular credit card charges then you must trust this person with paying those bills on time.
In addition, this person can be the one who keeps track of your whereabouts and future mail drop schedules for the rest of your family and friends. They can also forward personal mail to you that you would otherwise not see for months. If you stay away long enough, you'll have to ask them to submit your income tax forms for you, and renew your license plates!
Then there are the little emergencies, like your rent gets increased and the checks you wrote in advance are no longer enough. Or your bank gets sold and they move your money into a no-interest account until you come in and choose a new account. I was once audited by the Japanese Income Tax Office while I was traveling in South East Asia! My mother -- bless her soul -- took care of the whole thing (and never lets me forget it, either!)
Note that if you have no one at home to help out, you can still survive a few months -- even if you still have your house or apartment -- with some preparations. Write post-dated checks for your rent, house, car, or other regular payments to cover the time you will be gone and give them to the right people ahead of time. It is preferable to do this in person so they understand what you are doing. Send checks to your various utilities (phone, water, gas, electricity) to cover the basic charges during your absence and write "on account" on these checks. If you can arrange to have these bills automatically paid from your bank account, that's much more reliable. But the longer you're gone, the more likely you'll forget something like an annual auto or life insurance premium, or your annual American Express card fee.
Note that if you are leaving a vehicle at home, you should be able to get your insurance company to keep up your insurance for a very low fee, as long as the car is not driven at all. I did this for a year and a half once; it keeps your car insured against damage but is very cheap as long as no one drives it. Another benefit is that it can be difficult or expensive to get new insurance if you've had none for a year or more! You can still have the regular insurance re-instated on a monthly basis by having someone your pre-specify just call in and re-start it.
Well, yes, you've got to get out there somehow, and while most people will start with a long flight, there are some alternatives.
Overland
If you are in North America and want to explore Latin America, or if you are in Europe planning to head for Africa or the Middle East, congratulations! You can pretty much forget about the hassles and restrictions of international air tickets. Just hop on a bus, train, or ferry, and you are on your way.
Most of the old overland routes from Europe to Asia are shut down although some roundabout routes are still theoretically possible for some nationalities. But keep your ears open for the revival of these routes if situations change in Iran, Iraq, and Afghanistan. One route that is open is the "trans-Siberian" railway to Moscow, and on to China (or alternatively Japan). This is getting even more expensive and you must make official preparations well in advance. It is easier and cheaper to purchase this ticket in Hong Kong for the reverse direction.
Another possibility will be the opening up of the new railway across southern USSR, via Alma Atar into western China. Eastern Europeans are already doing this by bus. From China you can cross into Pakistan and the Indian sub-continent, or go down to Hong Kong from where you can cheaply fly to the rest of Southeast Asia.
But even if, like most travelers, you fly directly into your destination area, you should still try to do as much surface travel within the area as possible.
So, should you buy the air tickets for your entire trip at home, or get them along the way? Well, that depends very much upon your trip. Clearly if you only have one destination, you will buy a round-trip ticket at home. If you are planning to travel around the world -- or over vast parts of it -- you should take a hard look at your itinerary and see if a single ticket makes sense. Look at this decision logistically, economically, and from the point of view of what will make a better trip for you.
Just because a round-the-world (RTW) ticket will be a good value does not make it the best for you. What if it completely leaves out two or three areas that you are really interested in visiting? Are you going to let that ticket dictate where you go? "Well, we wanted to visit Bali and the Philippines, but our ticket didn't go there." What a lame excuse! If you really want to go to Bali, then plan to buy a separate side ticket to get you there, or else revisit your overall ticketing plans.
On the other hand, if a RTW tickets gets you at least pretty close to about all the places you want to go, then it may be just the ticket! And it is certainly convenient to have all your long distance transport already taken care of. But don't hesitate to make side trips to places you really want to visit, even if it costs a bit. You decide where you want to go, and if the airlines have a ticket that gets you there most of the time, then it's a good value.
The other logistical problem with comprehensive tickets is that they go everywhere by air! It is just a completely different experience to work your way all the way down from Mexico to Brazil (mostly) overland, than to fly from capital to capital. You can skip a leg of your flight and do it overland instead but you must be sure to clear this with the airline somewhere in route. And it is often just too tempting to take the flight you have already paid for.
Look at your personal travel itinerary and see where the really long, unavoidable flights are -- across oceans. These tickets will cost you money, and if you have a whole lot of them, it may be cheaper to get a single ticket that covers the entire route. But if you see a lot of really enticing overland travel on your route -- from Hong Kong, through China, and out into Pakistan over the Karakoram highway (wow!), or from Peking via Moskow back to Europe (not bad!) -- then a continuous or RTW ticket could just get in your way of enjoying such a trip.
Sure, you might pay more to get individual tickets, but you only fly when you really need to, or want to, and you just might find some incredible values at the bucket shops in the Third World. Like the UTA ticket: Singapore - Jakarta - Sydney - New Caledonia - Auckland - Tahiti - Hawaii - Los Angeles, open for one year, which I bought for $645 in Penang! Or maybe not.
Look, if you just want to go around the world as cheaply as possible, they you'd never bother to leave the airports, and do it all in about 10 days! The point is to make your trip to the places you want to experience, the way you want to do it -- if an RTW ticket can fit into that plan, then go for it!
To give you an example of the type of Round-The-World air tickets you
can build -- and their cost -- visit AirTreks.com.
If you're considering buying air tickets along your travels as you go, see the section on Transportation, specifically the part under Where to Buy Air Tickets.
You can buy a travel insurance policy that will (or will not) cover you for medical, hospital, and ambulance expenses, lost or stolen luggage, canceled flights or tours, and maybe even get you a ticket home in some cases. That would be a pretty comprehensive (and pricy) policy. Ask your travel agent or insurance agent about what may be available. Sorry, I've never gotten such insurance and don't plan to.
If you already have medical insurance, call the company and verify how well you are covered in foreign countries, and what the procedures are for approving treatment, verifying treatment, and getting reimbursed. Your current insurance may be sufficient enough to at least keep you from bankruptcy if you get into a serious accident overseas.
Now, before you leave home, make multiple photo copies of everything -- all your documents and credit cards. Copy the part of your passport with your photo and personal information. Copy all of your International Vaccination Certificate, your travelers check receipts, you air tickets, your driver's license, your student card -- anything that is valuable and will be a problem if lost. Leave a copy at home with someone you can contact. Carry a couple of copies in various places in your luggage. Take a copy of your birth certificate to help you get a new passport. Keep at least one list in your notebook or address book of all the various numbers that are associated with you: insurance policies, bank accounts, social security number, credit card numbers, the serial number on your camera.
Okay! That's it, you're ready to go!
Happy Trails!
Randy's Travel Page
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