Ex-Pat Living: Will That Be Cash Or Credit?
“Thank you, ma’am, will that be cash or credit?” They used to say that. But we hardly hear it said that way in the US anymore.
“Paper or plastic” used to mean paper money or charge card.
Now it’s all about “debit or credit?”
What happens, though, when an expat lives in a place where there is no credit? What if there are no checks? You’re continually walking a tightrope of having money that you need in case of emergency, but not having so much cash that you present a safety risk to your family.
When I went to Baku, Azerbaijan in the early 90s, the Soviet Union had recently collapsed. Banking systems, such as there were in the Soviet times, were not what you might call western friendly. There were no credit cards, no debit cards, no checks.
You couldn’t pay your own bills. We went to the bank and took a “Pay Order,” filled out three times- not in triplicate, there was no carbon paper (and yes, I realize some readers may have to look that term up! It’s been awhile since most people have had to think about how duplicates and triplicates were made before the “modern” NCR paper, that carbonless magic “press-hard-and-it-makes-a-copy” cash register or contract paper!).
I was often surprised that system worked at all for this small banking community- it was chaotic for cultures that weren’t used to queueing or taking a number and waiting for the next teller at a bank, but it actually did, mostly. However, as any system that works manually grows, the strain begins to show. And so it was. Modernization was required if Azerbaijan was going to join the Euro system of banks and develop correspondent banking relationships abroad.
That was years in the future though. When I arrived, none of that yet existed. I wrote recently about the collapse of the bank next to my office, and the skin-of-my-teeth, nick-of-time withdrawal of my life funds early on. So unstable were the banks that many people chose not to use banks at all, for any reason. Azerbaijan remained a primarily cash based society for several years.
When I ran my own business, students paid always in cash. I brought receipt books from the United States so that I could balance receipts against cash in a box each day. At first office staff were offended until I explained that US companies do their books by balancing cash drawers and receipts- it’s standard operating procedure.
Later when I was no longer running my own business but working for the Chamber, I was paid into a bank account. I would go to the bank and withdraw money for use during the month or wire it home to my daughter.
Imagine going to a bank today wherever it is that you live. Imagine going in and making a withdrawal for millions in local currency for your salary. (Actually, I kind of loved that part of banking day!) In Baku, the largest bill at the time was pink 10,000 Manat note (a ‘Shirvan’). That makes a pretty hefty wallet full of cash to walk back to the office with. Should you feel nervous or conspicuous? Can you trust the cab driver who knows what you went to the bank to do? Do you have a target on your forehead?
Interesting thoughts. Yet this is what expats go through every week. Moving money around is a real head-scratcher. And if you haven’t got someone at home to transfer funds to local accounts it gets even trickier.
Having been married to a banker for 25 years, I was fortunate to at least know how banks operate. Some expats or travelers get in deep when crises happen and the money manager is gone, unavailable or worse. My best tip for travelers and expats is to always be a pair, someone in your passport country connected to you. It may be a spouse, a parent, or in my case, an adult child. (There are risks to these arrangements too, but weighing the options, I’ll take the odds. Be sure to talk about the differences between Revocable and Durable Powers of Attorney and other safeguards before you go abroad.)
With my daughter in University, we set up and maintained access to each other’s account so that I could transfer and she could withdraw/deposit funds for me. She would go to the bank every day and withdraw the limit in US currency from my Manat account using a “plastic card” (not a credit or ATM card, just a card with a magnetic stripe of account information) and deposit that money into my US dollar account. That’s how I saved up money to buy my house that allowed me to have a place to live when I repatriated. Like buying one brick at a time.
So we had a plan survive in Point A (expat cash) and Point Z (home town savings), but what about travel in between? Travel to Europe, Asia or beyond, to developed (R&R) markets that cater to tourists? They don’t ask, “Will that be cash or credit?” They ask, “Debit or Credit?”
When you don’t have an international debit card or any kind of credit or charge card, what do you do then? Carry around scads of cash?
Think twice… you remember when I tried that in Paris? How’d that work out for me? The guy (I assume) who nicked my briefcase at Gare du Nord train station had no idea just how lucky he was getting that day. Who carries $2,500 in cash around with them? If you’re funding Christmas for two in Paris and London, you may have to! Aye, right, only a daft yank (as I was told!)
That was one of the difficult life adjustments, but expats tend to share information and we usually figure out ways to get what we need. More often, though, it’s the people at home, those who are not expats and never have been, who find this a ludicrous way to live.
My younger sister was one of them and as a result, she and I had some confusion when my mother passed. The reason? She didn’t understand how other parts of the world work. I needed to borrow money when my mother died and she wanted me to just give her a check. When I tried to explain that Azerbaijan didn’t have a checking system, she thought I was trying to skip out on my debt. I explained they also didn’t have ATM systems that connected to the US banks (at that time) so I couldn’t get it for her that way either. I would have to wire the money.
She of course got her money a couple of weeks later when I got back and got the wire transfer done, but she was convinced I wasn’t being straight with her. “Who lives like that?” she said. Well, dear, thousands of expats, students and travelers around the world live like that, or even rougher!
In the later years in Baku, after I built my home in Houston, my daughter lived there and I used it as a home base. I then was able to apply for a driver’s license again, and after establishing a residence history, I applied for- and received- my post-divorce credit card. Oh my goodness, what a feeling of freedom! But, freedom’s just another word for…
Once I had a my Visa, then I constantly had to email my US bank to let them know I would be traveling out of my ‘usual area,’ (as if Baku, Azerbaijan is a ‘usual area’ for their customer base), say to Europe [France, Scotland, England Ireland, Spain, Italy] so that the bank wouldn’t freeze my account when seeing abnormal charges. And yes, that actually happened during our Christmas in London.
So, let’s see, what else could happen? No checks, no credit, money lost or stolen, bank account frozen pending investigation of possible fraudulent charges, usurious exchange rates, bank collapse? Yep, that about covers most of the calamities that can (and did) befall an expat (that would be me). And still we survive.
Still we love to travel and explore. It takes more than money to deter those who have the world under their skin. We may be crazy to live like that to those who see us from home. But to the rest of the world, we are the testers of systems, the ones who let you know when something needs to be fixed. And it usually does get fixed, sometimes sooner, sometimes later. Sometimes there’s an expat work-around.
So when someone asks you, “Will that be Cash or Credit?” just say “Yes, it probably will be.”