ELLEN CREAGER: Lari, Rupee, Lira or Bhat?

Aug 8, 2005

Purchase Foreign Currency

ATMs may be convenient. Plastic may be safe.

But good old hard U.S. cash is still the traveler's best friend, especially in remote parts of the world.

Crisp new U.S. currency in small denominations still smooths the way on remote streets and in taxi lines from Juarez to Cairo.

It is also nice to have some local currency to get you through the first few days.

But what are the rules for bringing currency into various countries?

"These rules are very elastic. Nobody really knows all the rules, because they change," says Arnoldo Efron, the Houston-based author of the quarterly "MRI Bankers' Guide to Foreign Currency," used by foreign exchange dealers worldwide. "I check every six months. But to be 100% sure is very tricky.

"For instance," he says, "in India, it is OK to bring in dollars and euros, but not Pakistani, Nepalese or Butanese currency." India bars its own currency from coming in or going out, "but if you have a few rupees in your pocket, you should be OK."

It gets more complicated. In Thailand you can bring in all the bhat you want, but you can be jailed if you rip up a bank note with the king's picture on it. Saudi Arabia does not recognize Israeli new shekel currency. In Georgia, you can take out only four notes of each denomination of lari. Belize, Angola and North Korea do not allow visitors to bring their currency into the country at all.

And if you inadvertently break the customs rules?

"In many countries, each person arriving is a business opportunity for the customs inspector," Efron says.

Find a currency exchange

If you want to buy foreign currency before you leave on a trip, where do you get it and how do you know how much to take? If your bank no longer handles foreign exchange, seek out a currency exchange company in your community or online.

Bruce Beattie, president of Foreign Exchange Services in downtown Birmingham, says most of his customers are walk-ins. In Michigan, travelers usually ask for British pounds, euros or yen, but he can get less-familiar currencies with a couple days' notice. Most people get about $300 to $400 worth, but business travelers often bring more. A good dealer will know the rules of how much you can legally take without penalty.

Why bother with cash at all? Peace of mind.

"When you get off the plane on a trip, you are at the mercy of the airport ATM," says Beattie. If it's working, great. But if not, you may be stuck with no money to pay for a taxi or tips.

Here's more advice from Beattie and Efron:

  • Bring a mix of cash, credit cards, ATM card and traveler's checks on big trips.
  • Beware of commissions that can strip 3% to 10% from your money when you change it. Beattie's firm charges a $5 flat fee instead, no matter how much you change. Airport change bureaus tend to be most costly.
  • Don't buy more currency than you need because it will cost you to switch it back to dollars.
  • The currency exchange rates you see online at sites like www.oanda.com are not the price you will actually pay or get; those are rates banks give each other.
  • If you are already on a trip and need to exchange dollars for local currency, look for exchanges with no commissions.

"Read the small print, or they may charge you rates so high you will end up getting $800 for your $1,000," Efron says. Should you change money at your hotel? Often, this is fine, he says: "Israel, Turkey and Egypt are good. In some countries, though, they do it for your convenience and their benefit."

Ask for better rates

If you are exchanging a lot of money, ask the dealer politely if he can give you a better rate. The worst he can say is no.

Efron says some countries have issued new or revalued currency this year, including Turkey and Romania. For Turkey's yeni (new) lira, "where before 1 million was worth 75 cents, now 1 is worth 75 cents," he says. And that leads to one other piece of advice: Never change money from someone on the street, because the cash you get back may be last year's dough.

Cash, of course, is not the only way to go. Travelers have an arsenal of money options:

  • A bank ATM card. This is really the cheapest way to get money abroad, with a few caveats. First, foreign ATMs will usually draw only from a checking account, not savings. Second, if you lose it, your account could be sucked dry if a thief learns your PIN number. Third, some ATM cards don't work in certain machines, such as in Japan. Fourth, ATMs are as rare as double lattes in some remote destinations. Bring it, but don't make it your only choice.
  • Credit cards: A good way to pay for purchases abroad -- but watch out for new foreign transaction fees of 1%-3%. Before you go, alert your credit card company you will be traveling so the company can mark it on your account; that way, your card won't be rejected in Siberia or Dubai. Many small shops abroad don't take plastic. Make sure your entire credit card number is not printed on the receipt for all to see.

And avoid using credit cards for cash withdrawals at foreign ATMs because of high fees.

  • Travel Money Cards: Visa, AAA and American Express offer these pre-loaded cards. You use it like an ATM card abroad. The advantage is, it's not hooked into your bank account. And if you lose it, it can be replaced at offices worldwide. But they only work if you can find an ATM .
  • Traveler's Checks: Some may believe they are out of date, but a few traveler's checks either in U.S. dollars or foreign currency tucked away in your wallet can be a good backup for emergencies. Even if businesses in small towns don't accept them, a bank usually will.

Traveler's checks are available in euros, British pounds, Japanese yen and U.S., Canadian and Australian dollars. American Express and Travelex traveler's checks are sold at many locations.

  • If worse comes to worst, have someone wire you money via Western Union and Moneygram. You may have to pay a fee of almost 10%.

But it's better than sleeping on the streets of Barcelona without a yeni to your name.

Contact ELLEN CREAGER at 313-222-6498 or ecreager@freepress.com

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