Don’t you find it a pretty unrewarding experience being a bank customer in this day and age…? when automatic cash machines were first introduced they seemed like a great innovation; no more rushing to the bank on a Friday afternoon to withdraw enough cash to cover you for the weekend, ready access to your money whenever you needed it. But now things have gone in the opposite direction and those blasted machines have made many people’s lives a misery at times.

I have found that my own building society has all but closed up shop with regards to their branches and you have to travel into the city to find the only two branch outlets there. Once there you are not even welcome inside unless you are making some major transaction – so you are expected, or forced, to be more specific, to use the machines outside. I expect pretty soon we will all have to join the ever growing longer queues at the post office to do our banking s more branches close down, which is another issue altogether, have you tried to simply post a letter these days and stood for half an hour behind other people doing everything else expect buying a stamp…? I’ll save my rant about that inconvenience for another time!

Popularity: 2% [?]

I find that very few people give any thought to how they should take their money when they go on holiday beyond saying they’d like $200 or whatever to the travel agent and thereby getting ripped off. So, to help you decide, here’s a little guide:

The first thing to do is to check what currency is used at your destination. If it’s a mainstream currency such as dollars or euros then it’s best to take the money in that form. However, if you’re going off to less mainstream countries, check which of the principal currencies is most commonly used there (if in doubt, take dollars). Sometimes you can’t get the currency used outside the country or can’t get sensible amounts of it so you need to take dollars or euros eg India used to only allow you to import £5 of their currency which wasn’t really worthwhile getting.

What about taking cash? Well, if you’re in America then it’s always worthwhile to take, say, $100 with you (nothing larger than a $20 bill) and likewise for those living in euro-land. However, if that’s not the currency of the country you’re going to, it’s going to be expensive to convert to the local currency. The other option is to buy some of the local currency before you go but beware that this is usually quite expensive and not as cheap as you would think from the advertisements eg when I bought $150 for about £100 in a shop advertising that the commission was £3.50, the actual charge was over £10 ie 10%. The other main downside of cash is that if it’s stolen, it’s gone as holiday insurance rarely covers cash to any significant amount so if you are taking it, limit the amount to $100 or so. If you buy foreign currency on a card, it counts as a cash advance with all the charges that implies.

Travellers cheques (or checks) are much better than cash in that they can be replaced fairly easily if stolen (keep a note of the numbers, date bought and where you bought them). However, they are equally expensive to purchase and there is often a charge to cash them too. If you’re going to America or Canada you can use dollar cheques as though they were cash in shops (even where they say “no checks accepted”). Again, take them in the currency of the country you’re going to if it’s a mainstream one, otherwise dollars or euros. If you have any left over after your holiday, keep them rather than cash them in your bank as you can use them later (there is no expiry date) and this will save you paying the commission again. If you buy travellers cheques on a card, it counts as a cash advance with all the charges that implies. Make sure that your travellers cheques come with the Visa or Mastercard or American Express brands as others may not be accepted. You can’t use American Express travellers cheques in Cuba or Vietnam nor any issued by American banks.

Credit/Charge cards are used nearly everywhere these days. If you don’t have a card already, you should get one (Visa or Mastercard) even if you only plan to use it for emergencies. Bear in mind that not everywhere accepts them though and also that not all places take both Visa and Mastercard. If pushed, you can get cash on these cards either in an ATM or over the counter in a bank but save this for emergencies only as you’ll get charged a cash advance fee, currency conversion fee and interest. The exchange rate used is much better than you’ll get for either cash or travellers cheques so that $150 that I got would have cost me around £2.75 vs the £10 that I was charged had I used the card in a shop, around £7 had I used it to get cash (assuming I’d paid the full balance when I returned home). In those countries which don’t have ATMs, you can usually still use the card to buy things and get cash over the counter in banks. I say usually because it isn’t always the case eg in India we couldn’t use the card in shops and the banks weren’t practical either.

Credit/Charge cards come in four basic international-use versions. Visa/Mastercard are the most accepted worldwide but note that in some countries one may be more accepted than the other and in particular don’t rely on shops accepting both cards so, if you can, take both types. American Express is the next most accepted but it is widely accepted only in countries that are “American/British” influenced; the one principle advantage it has is that it can be replaced by any American Express office although note that these are not very widespread and may be difficult to get to. One thing to avoid is their Travellers Check Card: best to get one of their proper cards if you can, but only if it’s free in your country. Diners Club is very far behind Amex in acceptance worldwide and not worth paying for. You cannot use cards issued by American banks in Cuba or Vietnam which notably includes MBNA (owned by Bank of America). Discover isn’t accepted outside America. JCB acceptance is patchy: good where Japanese tourists are common, poor otherwise.

Debit cards are almost always branded Visa/Electron/Plus or Mastercard/Maestro/Cirrus and work in the corresponding systems however sometimes you may be issued with a card which can only be used in your own country: check that one of the Visa/Electron/Plus or Mastercard/Maestro/Cirrus symbols are on your card as if they aren’t you probably can’t use the card internationally. Charges are as per credit cards except that you don’t get charged interest on cash advances.

Cash cards are often limited to the country in which they are issued but if they have a Plus or Cirrus symbol on them, you can use them abroad too (this should change in 2008 with the introduction of the Single European Payment Area ie all European cards should be useable in all European countries, but don’t rely on that date). Charges are usually the same as for debit cards in ATMs. The principle advantage of having a cash card is that they are a lot less attractive for thieves as they can’t be used without the PIN.

Prepaid cards are becoming increasingly popular with travel agents, mainly because they see it as a way of getting even more commission than they can on travellers cheques. If you have a normal Visa/Mastercard credit or debit card, don’t bother with these. Charges are usually around £20 for the card, plus commission to convert to the currency of the card, plus cash advance fees ie a good deal more expensive than travellers cheques which in turn are a good deal more expensive than just using your own card. For example, had I got my $150 on a card, the cost would have been around £30 vs the £10 that it actually was and the £2.75 that it would have been on a credit card.

As well as the above options you also have a choice of providers of the various methods of payment. Travellers cheques may be offered “commission free” by your bank (and the UK Post Office), although note that this is not the same as “free” eg my $150 would have cost around £7 “commission free” (vs £10 with commission).

In the UK, the Nationwide Building Society offer a totally free debit card (ie no transaction fees, no ATM fees, no currency conversion fees) so my $150 would have cost nothing; their credit card is almost as good in that it’s free for purchases but is a bit expensive for cash advances. If you like to have large chunks of cash available to you, the Egg money account is excellent (2.75% currency conversion when used in shops or ATMs) and a good alternative to a prepaid card. Most UK cheque accounts come with a debit card with Maestro or Visa Debit facilities. For a UK cash card you seem to be limited to Egg’s savings account (Plus system) and Royal Bank of Scotlands Instant Savings account (Cirrus system).

In America you can get quite a range of systems listed on the card eg NYCE, Star, etc. but in reality the only two that matter are Plus and Cirrus for cash, Visa and Mastercard/Maestro for debit/credit card use as none of the others are accepted internationally. The costs for international use are rarely clearly laid out on American card agreements and smaller banks may not even know how much you’ll be charged for using your card abroad.

If you use one of the banks within the Global Alliance banks (BNPParibas, Bank of Nova Scotia, Bank of America, Barclays, Deutsche Bank and Westpac) can use machines from one of the other Global Alliance banks without transaction charges (currency conversion fees still apply).

Popularity: 36% [?]

Remember the days when you could withdraw the simple amount of £5.00 from an ATM…? and then one day you could not do it anymore. I always found this to be a pain as there were times when I only had £5.00 in my account (yes, it’s been that bad at times…) and it has not helped that many banks and Building Societies now will not even let you withdraw that small account over the counter due to their minimum-withdrawal-in-branch limits. Now cash machines that only dispense the £5.00 notes, regardless of how much money is withdrawn, are to be installed across the UK. The nationwide introduction of small fund-only ATMs comes after support by Bank of England bosses. They want to increase the circulation of the notes so that less crumpled fivers are handed out as change in shops.

On the other hand, while I welcome this re-introduction, charges are likely to be introduced on these smallish withdrawals and there is the possibility of the ATM’s running out of cash faster than usual. I, however, like the idea of the small-change dispenser – ever dashed in a hurry to withdraw some cash to pay for your bus ticket on a Monday morning only to get a £50.00 note pop out…? and then there’s the look on the face of the bus driver…

Popularity: 36% [?]