What is a cheap, safe way to travel with money around South America?

My long awaited annual overseas holiday is coming up and I am excited!  I am going to Latin America for the first time and I have been planning this trip for months. However, as with any international trip you need to have plan for how to carry your money around when you are travelling.

Travelling to South America I wanted to make sure that my plan for my money

1. Minimised the amount I was going to be paying in fees (these can really add up)
2. Ensured that any payment option was convenient
3. Ensured that any payment options was also safe (i.e. I was going to be safe and my money was going to be safe

Several of my friends had their accounts hacked when they were in South America so I spent a fair bit of time and effort developing the following plan which I wanted to share with you all.

Check your fee structures carefully before deciding what payment method to use

Fees suck and they really suck when you are travelling overseas.  If you decide to withdraw cash from an overseas ATM on your credit card you are normally stuck with the following fees:

• Foreign ATM withdrawal fee: $5
• Foreign exchange service fee: 2.5%
• Cash advance fee: 2%
• Combined with a crappy foreign exchange spread

If you withdraw $100 in cash you're paying ~$10 (or 10%!) in fees and getting nowhere near what you thought you would be getting in foreign exchange.  You try and minimise the impact of the fees by withdrawing large amounts (e.g. $1000) but you are still paying $50 in fees.

Travel cards are not a lot better.  You still get

How to maximise the value of your free Credit Card Travel Insurance

I love to travel.  If I had a choice I would constantly be travelling.  One of the things that I always do whenever I travel is make sure I have the right travel insurance as getting sick in a foreign country can be financially disastrous.

Specialist travel insurers are great...

I had always used specialist travel insurers and have been served well by them.  I once booked a month long trip overseas with my brother and when he fell ill and was no longer able to travel I was able to get almost a full refund on all the flights and tours that I had booked until that point.

If you are looking for a specialist travel insurer I can highly recommend CoverMore insurance.  As long as you read the fine print and understand what you are covered for they are a well run, reputable insurer who does pay out when they say they will (that was my experience anyway).

...but this year I'm going to give my credit card insurance a go

I have had the option of free credit card travel insurance for a while but I had never used it.  I confess that I rarely trust anything that is free but I recently decided to look into it a bit more.  I have a Commonwealth Bank platinum credit card which offers free travel insurance and when I looked through the PDS for the free travel insurance (offered by Zurich Insurance) I realised that it was reasonably comprehensive.

It covered everything that CoverMore had offered me and more including unlimited medical coverage, an amount for delays, lost luggage, stolen goods and anything else I could think of.  Even better I found a few people who had actually claimed on their insurance and found that they paid out fairly and promptly as long as you met the conditions in their fine print.

Meeting the conditions was relatively easy.  All I had to do was spend at least $1,000 of my travel expenses on my credit card and I was covered for the whole trip.  The biggest downside was that it would not cover my girlfriend (although if you are married it covers your spouse and children as long as you spend $1,000 per person before you travel).

Make sure you maximise the benefit of your free credit card insurance when you purchase your holiday related expenses

Travelling Overseas: Saving on airline fares which code share

As we come into the Christmas season and the summer holiday period (for Australians and all those in the southern hemisphere) many people will be well advanced in their vacation planning.  If you are travelling overseas and not going on a cruise you are going to be booking flights and in this day and age of global air alliances, the chances are that you may book with one airline but be flying with another (aka code sharing).

You may be in a situation where you are paying a very different price for exactly the same airline seat because you have booked through a different carrier.  

When I recently travelled on holiday, my destination was a small island in the Pacific and there were only two carriers that flew there: the local carrier and Qantas (an Australian airline).  If I'm going to be honest I had reservations about travelling on the local carrier - when it comes to air travel, safety is the most important factor and I had no idea what this small airline's safety record was.

The local carrier's price was ~$750 return and Qantas was ~$100 more than this.  In the end I decided to go for the local carrier to save the $100.  It's not that I valued my safety at $100, it was more I considered my fear of the small carrier to be irrational and I wasn't about to pay more for an irrational fear.  I was surprised when I boarded my flight and noticed that Qantas was actually code sharing with this small regional airline - paying the $100 would have gotten me nothing more than a Qantas boarding pass.

Airlines generally disclose when they are going to put you on a different carrier

I went back to Qantas' website and found out that when you selected a flight they did disclose

Don't get ripped off when converting currency

I recently returned from my overseas holiday and realised that although people shop around a lot to reduce the costs for their flights and accommodation we rarely ever really shop around for a good deal on the currency that we exchange.  We normally go for safety and convenience, which are undoubtedly important, but given the amount that you are likely to spend in cash on your travels (from trinkets and souvenirs to meals, drinks and transport) it is always worth remembering that you can save a lot by shopping around for a good exchange rate

You can never change cash for anything like the actual exchange rate

I think we are all used to the idea that we are going to get screwed when we exchange cash.  Anywhere that retail punters typically go, there is a large spread between the buy and the sell rate with the actual exchange rate somewhere in the middle.  The first time it happened to me I was outraged but then I (like most people) got used to the idea of being screwed.

On my recent overseas holiday though I was once again reminded how badly you could get screwed.  I am going to call out one company which was particularly bad: Travelex.  They were offering to convert my currency at 20% less than the official exchange rate. 

Even by the regular standards of exchange rate rip offs - this one seemed particularly bad.  What was even worse was that this was their rate when I was looking to change a rather large amount of cash.  On top of this outrageous rate they were going to charge me a 'transaction fee'...normally this is built into the spread but Travelex believed that they could convince me that this was their charge.

Always shop around for a better rate...you may even do better next door

Obviously I wasn't going to exchange cash at this rate...I walked less than 10 meters to the ANZ branch that was right next to them at the airport and I got a rate that was only a 10% discount to the official exchange rate (with no transaction charge).  I wanted some cash for when I landed at my destination so I exchanged a bit at this (still exorbitant rate).

You can often get a better rate if you wait until you get to your destination

I'm not sure if it is only Australia which rips people off so badly when it comes to exchange rates but I always seem to get a better rate when I exchange cash at my destination rather than before I travel.  I exchanged more cash when I got to my destination airport at a

Beware travel medications: You can get ripped off

I am used to losing cash pointlessly when I travel - in fact when I am going to the third world I expect to pay 5 times what I should because I have no idea what the cost of something is meant to be.  But when it happens at home it really irks me.  This is a warning for all those who simply assume a doctor is going to prescribe the cheapest medication because it's the right thing to do: they aren't and you can get stung for hundreds of dollars.

I was travelling and left my medical appointment to the last minute...

I am going on holiday to a part of the world where you really need malaria medication and I had completely forgotten about it.  With 2 days to go before I leave (don't worry - the posts will keep coming - I learned my lesson from the last time I travelled) I scrambled to make an appointment with the doctor.

I have been going to the same doctor for as long as I could remember however he retired earlier this year and this is the first time I've needed to go to one.  I went to one in the CBD next to work.  I knew it was going to be expensive...but $70 for an appointment which took exactly 6 minutes seemed a little excessive to me.  I'll get a bit back on Medicare but it is still ridiculous.

I was actually going to post about this - about trying to find a doctor who bulk billed because it could save you a lot of money if you went several times in a year - but then I got stung really badly.

I had a doctor who was not interested in providing me the full information

The doctor I got stuck with did not bother to provide me with the information I needed.  I went in and asked for a prescription for malaria medication.  I have travelled overseas a fair bit and I know what I usually take: Doxycycline.  I mentioned to him that I have a real sensitivity to light when I take it (a common side effect) and asked whether it was the only medication out there.

He said there was - it was just as good and then he prescribed me Malarone which seemed like a magical drug when he described it - you don't need to take it as often as Doxycycline, you don't need to take it for as long and it works just as well which sounded like a miracle replacement...

However when I went to the chemist...10 days worth cost me $150!

Doxycylcine costs ~$30 for a 10 day trip...I was out of pocket more than $120 to solve a problem that I had been dealing with for years.  The doctor I had a relationship with never bothered to prescribe this other drug for me because he knew it was super expensive.

I know I should have asked about the cost.  I know that it was on me to get the right prescription...but when a doctor doesn't mention to you that the cost is significantly higher...and the only way you can get another prescription is to pay another $70 then it does feel like a bit of a rort.

The moral of the story is...don't trust that a doctor is prescribing you the most cost effective medication

If it is not life and death it is worth asking them about the relative cost and benefit.  For me the difference between the two drugs was a sensitivity to light but they worked to stop malaria just as well as each other...I would have taken the cheaper drug.

If you don't have a relationship with a doctor that you trust to do the right thing by you it is worth asking the questions.  It is sad that you have to but you could get stung like I did. It pays to question what you are being told (whether it is by financial professionals, lawyers, accountants - or as it turns out here...medical professionals).

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How important is travel insurance?
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How important is travel insurance?

Most of us realise that we need to get travel insurance when we travel.  Indeed some destinations require appropriate travel insurance before they will issue you a tourist visa and almost all guided tour groups require adequate travel insurance.

However, I think because we often see it as a requirement of travelling (just like a visa) and not a product with pros and cons, we often go for the cheapest option and not the one which is the most appropriate.

Why is travel insurance so important

There are several well know and documented reasons for having travel insurance however there are some areas of coverage that you may not know about (which actually come in useful)

1. It covers your hospital bill in the event that you get sick overseas
• This is the one that everyone knows is important
• Hospital and medical cover for citizens is normally subsidised however tourists and foreigners normally cop the full hit.  This is definitely the case in Australia where citizens and permanent residents pay virtually nothing for hospital treatments however tourists get charged thousands of dollars for the same operation
• This alone makes travel insurance worth it - it is not worth penny pinching on travel insurance (or on a provider that may not pay out) when there is the risk that you may get sick overseas
2. It often covers lost or stolen property
• Most people know that it

Finding holiday accommodation - advertising websites are not always your best bet

A post today for all those who like to do weekends away (i.e. not major holidays) but always find that accommodation is the hardest thing to organise.  This post was inspired by my own experience trying to find a place to stay for a weekend away.

It is amazing how easy it is to find travel recommendations when you are going to major cities, whether you are looking to do the 5 star route or the back packer option - there are always places with reviews and comments.  It is often much harder to find recommendations for accommodation closer to home - where you live in the city and you are travelling down to a beach or holiday location or perhaps wine country for a relaxing weekend away.

I found that what I ended up doing (and taking a straw poll amongst some of my friends this is what they do too) is that they go to a dedicated vacation website, look at the options and try to get a sense of whether the location and amenities are really what you are looking for.   If you really are in a rush these websites are the best thing going around because it takes very little time to easily see what is available.

However using these websites often means that you miss many better (and cheaper) options

When I was booking a weekend trip away I thought I had looked at almost every single house that was available to rent in the location I was looking at for the dates I was interested in.  However one of my work colleagues sent to a site, that admittedly looked like it had been built using one of those auto-website builders, for a single cottage accommodation that had a better location, better amenities and a lower price than anything I had seen advertised - AND it was available.

I could not understand it until I realised that it actually was not advertised on all of those aggregation websites.  When I called to book, I asked the lady who was renting it why she didn't advertise it on those sites - surely she would get more enquiries that way.  She said that a bit risk with holiday accommodation is that you cannot check things like references and they prefer to get people through word of mouth.

So what is a better option?

I think there are several things you can do before you commit to a place advertised on one of the aggregation type websites (assuming you have time):

1. Ask friends:  Friends and colleagues often have great recommendations of places that you would not be able to find ordinarily.  If you come with a reference people are much more willing to open their property to you
2. Spend some time on Google:  If you are not able to find a friend who has a recommendation - a lot of these places have very basic websites on google and you can find a lot just by looking.  I did this when testing my hypothesis and a LOT of places that are much cheaper and often better suited to couples or small groups are just not advertised on the aggregation websites

Hopefully you come up with some better results that save you some money and get you a better location.  If you do I'd love to hear about it so please comment below.

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Planning a cost effective bucks weekend

Bucks weekends (or even just a single night) are one of those events that typically do not come cheap.  This is especially true if you do all the 'regular' bucks activities in the regular venues.  I know bucks that have done trips to Vegas, Hong Kong, the Gold Coast (for Australians) and everywhere in between and everyone has a great time though laments after the fact how much money they wasted.

Having had to plan and attend a bucks night recently I thought I would write a post on how to cost effectively plan a bucks night that did not skimp on most of the frills that people expect.  The first thing you need to establish is those things that the buck (and more importantly the other attendees) consider essentially.  Generally this list is not very long and consists of:

• Alcohol; and
• Female 'entertainment'

Everything else should be considered an extra.  I have outlined a 9 step checklist to plan activities that should not break the bank.  I'm going to assume that there are approximately 10 guests and ever guest is paying their own way.  I am also setting a budget of $300 per person for the whole weekend (if you think about how much gets spent on a weekend in Vegas / HK / the Gold Coast including flights / accommodation / alcohol / partying etc you will realise how cheap this actually is.

1. Pick a location that is not typically thought of as a party location.  The fact is that when you're a group of 10 drunk males it doesn't really matter where you are.  You are kidding yourself if you think that in that state you're going to pick up women and bring them back to the share house.
2. Book a spacious house with not too many neighbours around (~$800).  The biggest killer is when the police get called because you're being too rowdy.  You want to be rowdy so next to a golf course (or something similar) is perfect.  For that price you are getting a seriously awesome place
3. Get every person to bring their own alcohol on the way up ($50 per person, $500 total).  This avoids the problems associated with you buying $500 of beer and there being some spirits only / wine only drinkers in the group.  Bars are also way over priced so if you can have the party at the house then you are much better off.
4. Book the female 'entertainment' to come to the house your are staying in (~$500 total).  This amount of money should provide more than enough 'entertainment' for the weekend. Having done this recently the objective is to really embarrass the buck
5. Book an activity for the Saturday morning - something fun and different that everyone can get involved in and doesn't depend on the weather (~$900 total).  When I planned this a few weeks ago we went trap shooting with ozshooting.  They were super professional and they do it whether it is sunny or raining.  It took a couple of hours and everyone had a blast.  The best activities are those which are perceived as 'manly' - paint balling and gokarting off the top of my head are other fun activities which will get people going
6. Don't buy too much food!  This is a bucks weekend.  All you need to bring along is eggs, bacon, bread, cereal and milk for breakfast and some snacks (~$100 total).  When I went away this is all we bought and we had HEAPS left over at the end. 
7. For all other meals go to a winery / order pizza or fish and chips in (~$200 total)  Guys really don't care that much for a bucks weekend so you should go overboard with meal planning.
8. The person / people organising the bucks should have some pre-planned activities that will embarrass the buck.  Public humiliation type activities are always fun (e.g. getting them to wear a mankini in public) but there are heaps of activities out there dedicated to activities.  You should not have a rigid timetable but if things are starting to go quiet then pulling out one of those pre-planned activities is a good idea to get the party going.
9. Drive if possible and take the minimum amount of cars necessary.  For 10 people 2 - 3 cars is more than plenty and will help keep the fuel costs down.  As I used less than half a tank of fuel on the weekend I went away I'm not counting this in the budget.

The total cost of the above weekend is $3,000 or $300 per head.  You would barely get flights and accommodation to Vegas / HK / the Gold Coast for that kind of price.  There is so much fat in that budget that you don't really need to skimp on activities.  I just had a look at the kind of places you could get for $800 for a weekend and there are some amazing options out there.

Travelling overseas: Credit Cards vs Travel Cards

As I mentioned in my April 2012 expenditure review post I am going overseas at the end of this year and have been looking into the most efficient way to take funds with me.  When I have travelled previously I have used a combination of cash / travel card / credit card and debit card (I have never used travellers cheques as they never seemed to stack up for me).

At the very minimum I carry around A$500 (~US$500) in the local currency when I travel.  About $350 of this is as a float which I use to spend on various things and $150 is in different currencies (I have US dollars, Euros and Canadian dollars) as an emergency fund (I chose currencies that I figure will be accepted in every place in the world). 

On a month long trip I expect to spend ~$3000 - $5,000 so the question becomes - what way should I carry my excess funds around with me?  There are really 4 options

• Credit Cards
• Travel Cards
• Debit Cards
• Travellers cheques

I am going to cover the relative pros and cons of each of the above options (excluding travellers cheques which I have never used) below.

Credit Cards

• Pros
• Typically the best exchange rate of all the options
• Interest free period on purchases / reward points build up
• You already have one and you can keep using the same card when you go home
• Cons
• You typically get charged interest on ATM withdrawals from the moment you withdraw the cash (i.e. no interest free period) as these are counted as cash advances
• You also get charged currency conversion fees with most cards (For Australians you don't with the GE Finance 28 Degrees MasterCard which is a brilliant option)
• There is a real risk in less developed areas that your card details will be stolen
• If you haven't warned your bank that you will be using it there is a fair chance that they will stop debits on your card until you contact them (which in an emergency is a real pain)
• Susceptible to exchange rate movements

Travel Cards

• Pros
• You can lock in your exchange rate today and have certainty around your holiday budget
• You are using your cash which you have pre-loaded onto the card so there is no interest payable
• If you are travelling to a location where you have loaded the relevant currency (i.e. if you are travelling to Europe and have loaded Euros) then ATM fees are lower than most credit cards / debit cards
• Cons
• Often have lots of hidden fees
• You pay a (typically) 1% fee on all amounts deposited onto the card
• If you go to a country with a different currency to the one on your card then the fees really start to add up (e.g. I went to Egypt with a USD card and the fees were well above 4% plus the ATM withdrawal fee)
• The exchange rate is typically not as good as the one you get with credit cards or debit cards
• When you come back to your home country the money left on your card is 'trapped' and you have to suck up the high fees mentioned above to get your cash off the card.  Also you are then subject to the exchange rate risk you were trying to avoid

Debit Cards

• Pros
• You are using your own money from your bank account with the same pin.  There is no set up cost to this option and no interest payable on amounts withdrawn from ATMs
• You do not have any exchange rate risk when you get back
• Cons
• Exchange rate risk for the duration of your trip
• Typically not as good an exchange rate as credit cards (but is often better than travel cards)
• Very high ATM costs (when I went to Hong Kong it cost about $8 per withdrawal regardless of how much I took out of the ATM)

My preferred option

Having used all of the above options I have more recently started to use a combination of credit cards and debit cards.  If you find a credit card that has very low fees for overseas transactions (for example for Australians the GE Finance 28 degrees MasterCard has no annual fees, no currency conversion fees and no international transaction fees which makes it perfect for international travel) and combine this with a debit card which you use to withdraw large amounts of cash at a time (e.g. $1,000 every few weeks) then you can keep the fees to a minimum.

Having used the ANZ travel card I found that I did not like the travel cards very much.  Any certainty I had around exchange rate was far outweighed by the exorbitant fees.  Further exchange rates can move in your favour and you lose the benefit of this with a travel card.  I also lost significant value taking money off the card at the end and it expired after 2 years which meant that I could not even keep it for travel that I was planning to do in the future.  Also in some places the travel cards are not common and there is a bit of a hassle getting them to accept it.  Overall it is not worth the effort in my opinion.

Disclaimer: I get absolutely nothing for promoting the 28 Degrees MasterCard.  I just think it is a great product which I found recently and will be signing up for in the next few months.