Over years of travel, I have noticed one thing, regardless of the rising popularity with credit cards and debit cards – Cash is KING.
Majority of small businesses around the world will only accept cash in exchange for services or goods. If credit cards are accepted, sometimes a 3% transaction fee would be added to cost of the item to help pay for the fees charged by banking institutions.
Depending on location, businesses may accept foreign currency in addition to their local currency. While in other countries, businesses prefer foreign currency over local currency.
When I arrived in Cambodia, I learned they were of the latter. Businesses which tend to deal with tourists would list out their prices in US dollars. Street vendors, restaurants, pharmacies, tuk tuk drivers – all preferred payments in US dollars. However, change would be provided in a combination of US dollar (USD) and Cambodian riel (KHR).
Luckily, Cambodians do not stipulate use of crisp US dollar bills.
Warning #1: Many foreign exchange counters in South America and Asia will only accept US dollars and Euros in near mint condition. Any bills with tears or marking will not be accepted. This leads me to a pet peeve – why does people mark brand new US currencies with a rubber stamp??
Now I have visited the United States of America several times and I thought I am familiar with their currency. I knew there is the famous one dollar bill along with $5, $10, $20, $50 and $100 USD bills. While in Cambodia, after a delicious lunch in the vicinity of Angkor Wat, I paid for my meal with a $10 USD bill. When the waitress returned with my change, I was taken by surprise – she gave me a $2 USD bill.
My mind questioned if I am in the midst of a money laundering scheme. I showed the money to my friend who was traveling with me at the time and he was unsure. Then I told myself, well if this is fake, at least it is only $2 – it could serve as a souvenir and a great topic of conversation. When I got back to our WiFi equipped hotel room that evening, I posted photos of the $2 bill on my Facebook account. Before I checked with Google, an ex-coworker replied to my post and informed me that it is REAL but not circulated within continental USA. It was good to know, I would not be considered a person in possession of counterfeit currency if found with this $2 USD bill.
The next day, my friend received his own $2 USD bill with his change after a meal. He didn’t agree with my thought of keeping it as a souvenir so he asked the waitress for 2-$1 bills. Her answer was not available – not possible. He then tried to spend the $2 USD bill by using it as part payment to our tuk tuk driver. He was very reluctant in accepting the $2 USD bill.
Warning #2: The $2 USD bill may not be accepted or recognized as valid currency.
One last thought I want to share pertains to ATM (automated teller machine) or cash machines. With the advent of technology, cash machines have provided convenience to travelers around the world. We no longer have to carry Traveller’s cheques or sufficient cash for our whole journey from home. Though some destinations do offer limited access or no cash machines at all.
Rapa Nui (Easter island) of Chile had only 2 ATM on the whole island when I visited it in early 2013. I remember the word of warning I received before boarding my flight in Santiago – withdrawal cash from the cash machines while on the continent before arriving on the island. Luckily I listened to the advice, as when I arrived, one of the bank machines was out-of-service and the other machine ran out of money part way through the weekend.
Warning #3: Banking fees are expensive and add up quickly!! ATM or cash machines does provide plenty of convenience. However, it is best to be aware of banking fees and hidden service charges. For each transaction, my home bank charges a transaction fee, the foreign bank charges a transaction fee and an International Service Assessment (ISA) fee is added to the foreign currency exchange rate. My solution for each withdrawal is to take the maximum allowed amount. This help reduce the frequency of my visits to the ATM and reduce the need to constantly be in search of a bank machine and cause unnecessary stress. If I have surplus currency at the end of my stay, I save it for future trips or sell it back to the bank.
Do you have money stories to share?! Feel free to share your stories and experiences in the comment section!