Send money now, Mom!

The first installment of several posts addressing frequently asked questions about South America, Galapagos, and Ecuador covers money issues while traveling abroad.

Money Issues

• How do I carry around my money?
• Should I take traveler cheques with me?
• Are Visa, MasterCard useful and are ATMs available in South America?
• Debit Versus Credit?

How do I carry around my money?

Well, this is really a very personal question and thus requires an analysis of your personal preferences. I think every traveler I’ve ever met has a different scheme for toting his monetary wealth. The solution depends on a handful of circumstances, and the first thing to realize when you asses this situation is to consider how you deal with your money at home. Do you have a bank checking account with direct access via a check (debit) card. Are you currently under a wealth of credit card bills? Do you skip the tax and banking system altogether? Do you carry a fat wad of dough in your pocket? All these things add up to your monetary awareness. And now my personal solution, (so everyone knows where i hide my money at night): when I’m on the road…. i do things like MacGyver or your everyday boy scout would: a little bit of everything:

When traveling I rely mainly upon my trusty tarjeta (an ATM card) that has direct access to a small checking account where i control the amount of funds available from my bank’s secure website. I also have the everyday allotment of efectivo (cash) in my wallet that I’ve budgeted for daily use. You’ll find a tiny stash of travelers cheques (travelers checks) in the bottom of my backpack. And a kanguro, a flat, hidden waist belt i picked up at the market in Otavalo containing my passport, some extra cash, keys to tiny travel locks in placed on my backpack, to keep out curious fingers, and finally the ever useful earplugs. I dont keep cash in my backpack because of the three things I have when traveling (my pack and my clothes, and my person) i figure the pack is the most likely to get violated or stolen.

Should I take traveler cheques with me?

Why even bother with TCs in South America, when 1) almost no negocios (businesses) in SA accept travelers checks to pay for goods, and 2) most bancos (banks) charge a commission to exchange them or even buy new ones (eg, Banco de Guayaquil changes and sells them for $3 on every $100.)

Well, again, I think this has everything to do with personal preference about your illusion of security. If you get robbed, and you have the cheque numbers memorized or stored somewhere safe. Then yes, you can get some of your money back, but not without hassle. You’ll probably have to pay for an international call to file a claim and get the reimbursment. It is a little known fact that most banks in South America (particularly in Ecuador) that issue travelers checks will not reimburse you for checks lost. Don’t even bother going to one to complain that you lost money. Instead find out from a local where the nearest Western Union, go there and get their transfer id. Then make your call to the TC issuer to file a claim on the missing cheques. You give the TC issuer the numbers of the lost cheques and the Western Union id, and they give you a transfer code which you then take back to said Western Union to pick up your cold hard cash! Luckily you pay no commisions in this process other than the phone call (the TC issuer will pay for the wire transfer).

I suppose its really to your advantage to have some cheques, in the case that you loose all your money, your ATM card and your credit card. Then, independently, you still have your pride (and this essential wild card) to avoid the embarrassing “E.T., phone home” scenario to borrow more money.

Are Visa, MasterCard useful and are ATMs available in South America?

Here is the deal (quick and dirty) with ATM machines: ATM machines are indeed ubiquitous in Ecuador and everywhere else in South America. They work flawlessly for both debit (check cards) or credit cards on the Visa Plus and MasterCard networks [others beware!] It goes without saying that you definitely need your PIN to withdraw funds from either check or credit cards at ATMs. I highly recommend using ATMs as opposed to relying on changing travelers cheques, if and only if you 1) have your money in a bank that has affiliate banks abroad (in whatever country in South America you are visiting) such that they dont charge you a boat load for each withdrawal. PS, Make sure you tell your bank (in person, to a real person) you are traveling to X countries for X amount of time, so they can put a note into their security systems not to flag your account when it starts seeing money being withdrawn from abnormal locations.

Debit versus Credit?

You won’t know ‘till you get there, but the odds are that credit card providers will charge more of a commission per withdrawal than your banks direct debit ATM card. For instance, I have both credit and debit cards issued from the same bank in the USA, but the Visa credit card fines me a hefty $10 commission per withdrawal, where as my debit card charges NO commission from withdrawals at affiliate bank ATMs, and a $2 commission for withdrawals from non-affiliates in Ecuador.