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Do you, or someone you know personally, have a ZERO credit score like Dave Ramsey talks about? - Page 8

post #141 of 172
Quote:
Originally Posted by velochic View Post

.  You don't pay extra fees usually when using your credit card abroad.  We don't, anyway.  We just pay that day's exchange rate.  No fees involved.


Are you sure? Our credit card doesn't pop up with a fee separate from the transaction, but any transaction in a foreign currency has a 2% fee built into the exchange rate. Read the fine print about foreign currency transactions, I think this is pretty common. Because of this, we try to use cash as much as possible when we are in the US, even though we use the CC for regular purchases at home. But we certainly bring the CC along just in case.
post #142 of 172
Quote:
Originally Posted by Kyamo View Post



Quote:
Originally Posted by velochic View Post

.  You don't pay extra fees usually when using your credit card abroad.  We don't, anyway.  We just pay that day's exchange rate.  No fees involved.




Are you sure? Our credit card doesn't pop up with a fee separate from the transaction, but any transaction in a foreign currency has a 2% fee built into the exchange rate. Read the fine print about foreign currency transactions, I think this is pretty common. Because of this, we try to use cash as much as possible when we are in the US, even though we use the CC for regular purchases at home. But we certainly bring the CC along just in case.


Positive.  Our Capital One doesn't charge a foreign transaction fee.  Neither does our visa through our credit union.  Our AmEx does (or did... we just found out that they are not going to anymore), which is why we didn't use it abroad.

 

post #143 of 172
Quote:
Originally Posted by velochic View Post




Positive.  Our Capital One doesn't charge a foreign transaction fee.  Neither does our visa through our credit union.  Our AmEx does (or did... we just found out that they are not going to anymore), which is why we didn't use it abroad.

 


I can confirm this also. I travel abroad frequently and my Capital One does not charge transaction fees either.

 

post #144 of 172
Quote:
Originally Posted by rhiandmoi View Post

You have saved over time $20,000 in your account that earns 5% annually. You have the choice to purchase a car for cash or to finance at 0% for 5 years. You can either pay $333.33 a month in a car payment, or put that back into your account to rebuild your savings over that time.

 

Option 1. You pay Cash.

Now you have $0 in your account.

Each month you deposit $333.33

After 60 months, you will have $22,668.47

 

Option 2. You Finance

You have $20,000 in your account.

Each month you deposit $0, and pay that to your finance company instead.

After 60 months, you will have $25,560.67

 

Paying cash costs you $2,892.20

 

If you keep saving for 5 more years while you drive this car:

Option 1 - You have $51,760.24

Option 2 - You have $55,471.98

Paying cash now has cost you $3,711.73

 

Time to buy another car with the same options as before.

Option 1. You pay Cash.

Now you have $31,760.24 in your account.

Each month you deposit $333.33

After 60 months, you will have $62,833.12

 

Option 2. You Finance

You have $55,471.98 in your account.

Each month you deposit $0, and pay that to your finance company instead.

After 60 months, you will have $71,190.44

 

Paying cash for these 2 cars has now cost you $8,357.33

 

 

If you keep saving for 5 more years while you drive this car:

Option 1 - You have $103,305.90

Option 2 - You have $114,031.34

Paying cash now has cost you $10,725.45

 

So just based on paying cash for these 2 cars, you have cost yourself the equivalent of a European vacation for the whole family.

And so on.



I generally agree with this this calculation except that option 1 schould have started with a balance of $2000 (the rebate) not $0.  Also the fact none of the senarios take into account income tax (even with only paying at the long term capital gains rate/not state income tax would diminish the ROI for both the option 1 and option 2 situations) closes the gap even further.

 

I'll conceed that it is marginally more expensive to pay cash, but no way it is as expensive as velo's orginal senarios.  Also not paying interest is a sure thing (which I still think you are with the 0% loans due to the upcharge in price/lack of rebate) vs. keeping money in a long term investment has some risk.  I'll take the opportunity risk of not investing long term over the risk of my lost of inital investment.

 

post #145 of 172

Bolding mine.

 

Quote:
Originally Posted by happysmileylady View Post

My daughter is not travelling alone.  She is with a guided tour group composed of three of her teachers, the tour guides and about 20 other students.  If an emergency happens, there are adults there to handle it.  I absolutely will not be getting a 15 year old a credit card just to travel to Europe for 12 days with a school group. 

 

The reality is that when you travel overseas, any method of cash flow is going to involve some fees.  Currency exchange fees, check cashing fees, ATM fees, taxes etc etc.  And all carry risks.  If someone steals your stuff, it doesn't matter what you have on you, it's a pain in the rear.  While there's no way to get straight cash back, carrying a credit card, particularly in another country, doesn't automatically guarentee access to funds if it's stolen either.  If your card is gone, how are you going to take it to the ATM?


 

I was going to step away from this thread becasue clearly, we simply do not view this issue the same.  And that's fine, there's just really no point in debating it any longer.  However, now you are bringing up your 15 year old daughter travelling overseas alone.  Alone = without parents.  Please, at least do a prepaid Visa or Amex to use in addition to travellers checks.   Please.

 

I don't know how much you've travelled but if you are in a bind, travellers checks are not going to be a quick and easy solution.  A credit card is.  It is accepted without question, travellers checks are not.  I still remember travelling when I was 17 without my mom.  I was with *responsible* adults and friends.  Yeah.  Not so much.  I ended up deciding it was best to leave in the middle of the night (very long story) and even though I was under 18 I was able to arrange a car to take me to a hotel, a hotel room, and a flight the next day with a telephone and a credit card.  No way travellers checks would have been as simple.


She will be alone, 15 and in a forgeign country.  Give her the ability to easily get herself home if needed.

 

I also think it is kinda hypocritical to assume the adults will have access to credit should an emergency arrise but that is a separate issue from your daughter's safety and ability to get herself out of a bad situation if it arrises.  Give her that option.
 

 

post #146 of 172
Quote:
Originally Posted by ChristyMarie View Post

Bolding mine.

 


 

I was going to step away from this thread becasue clearly, we simply do not view this issue the same.  And that's fine, there's just really no point in debating it any longer.  However, now you are bringing up your 15 year old daughter travelling overseas alone.  Alone = without parents.  Please, at least do a prepaid Visa or Amex to use in addition to travellers checks.   Please.

 

I don't know how much you've travelled but if you are in a bind, travellers checks are not going to be a quick and easy solution.  A credit card is.  It is accepted without question, travellers checks are not.  I still remember travelling when I was 17 without my mom.  I was with *responsible* adults and friends.  Yeah.  Not so much.  I ended up deciding it was best to leave in the middle of the night (very long story) and even though I was under 18 I was able to arrange a car to take me to a hotel, a hotel room, and a flight the next day with a telephone and a credit card.  No way travellers checks would have been as simple.


She will be alone, 15 and in a forgeign country.  Give her the ability to easily get herself home if needed.

 

I also think it is kinda hypocritical to assume the adults will have access to credit should an emergency arrise but that is a separate issue from your daughter's safety and ability to get herself out of a bad situation if it arrises.  Give her that option.
 

 



Yes, exactly.  Safety trumps all, esp. for a minor child travelling abroad. This just feels like common sense to me.  I don't get the struggle here at all.  It's as though credit is bad, except if someone is going to use it on your (or your child's behalf).  Would she still travel abroad if you were relying on the school to not have any access to credit to take care of students in an emergency? I cannot imagine school administrators authorizing a trip under those circumstances.  That seems foolhardy.

 

post #147 of 172

She will not be alone, she will be with 19 other students, 3 teachers, and a commercial tour company guide.  She's far from alone, she's just away from us.

 

I don't in the least find it hypocritical to be comfortable with the people in charge choosing to use debt.  Because I don't care if other folks use credit, I am not like morally opposed to others using it in their own lives.  That's like saying it's hypocritical for me to be ok with a vegetarian family feeding her a vegetarian meal when she is visiting, even thought we aren't vegetarians. 

 

The reality is that financial difficulty she's most likely to encounter there is losing her money.  If you lose cash, it's gone, you are SOL.  If you loose a credit card, you aren't liable for charge made on it, woo who, but you still don't have a card or access to that credit.  You do get another card in the mail, eventually, usually takes like 4 to 6 wks, mailed to your house.  Same with a debit card.  I know because I have lost both.  You are still SOL.  However, with American Express Travellers Checks, you can get that money back usually within 24 hours

 

Quote:
 

Lost or Stolen Cheques

American Express® Travelers Cheques are safer than cash. If they are ever lost or stolen, the funds can be replaced virtually anywhere in the world, usually within 24 hours.*

 

What to do if your cheques are lost or stolen

  • 1. Locate serial numbers Have the serial numbers for your lost or stolen Cheques on hand when you call.
  • 2. Call Call an American Express Travelers Cheque Customer Service Center as soon as possible to report the loss and open a claim. Use the search tool to the right to find the customer service number for your current location. Service Centers handle claims 24 hours a day, 7 days a week.
  • 3. Plan delivery During this call, we will help determine the best way for you to obtain a refund. Refunds are available at American Express Travel Services Offices and partner locations around the world.

https://www212.americanexpress.com/dsmlive/dsm/dom/us/en/personal/cardmember/additionalproductsandservices/giftcardsandtravelerscheques/travelerschequesservicecenter.do?vgnextoid=8a79b244dc310210VgnVCM200000d0faad94RCRD&vgnextchannel=95ddb81e8482a110VgnVCM100000defaad94RCRD&appinstancename=default

 

They can also be purchased in Euros, so no exchange fees to worry about (other than obviously the one time fee at the time of purchase).  And when I have used them, I just cashed them at a bank or the hotel and then used the cash at merchants.  So, that morning, take whatever check down to the hotel front desk, cash it, then that cash is what would be used to pay for lunches and such. 

I intend to send her with both cash and travellers checks.  And if we have a checking account set up by then, she will bring her debit card too.  Three forms of financial access will be MORE than enough, and IMO, two is sufficient.  And if something worse than losing her cash happens, she can contact us, we will book whatever plane tickest and hotel rooms she needs if the tour company isn't able to.  And before we discuss what if phones go down, even in the current situation in Japan, people are contacting others around the world through facebook and email and so on.  If things get so bad that there's absolutely no way to communicate at all, funds are not going to be a primary concern anyway. 

 

I am also not quite sure how not having a card to swipe at 15 is considered not financially savvy.  She's 15, not 35.  She's had a job for over a year.  She paid for a third of this trip herself.  The spending money she is bringing is all hers.  She is going to pick up paying for her own cell phone shortly, and has been paying for her own texts since she got it (no I will not pay for unlimited texts.  So, she wants unlimited, she's getting her own bill then.)  I have to say that it's my experience that she's the most financially savvy 15 year old I know.  I think 15 is a perfectly reasonable age to get the first checking account.  I don't know of too many folks who get them earlier than that.  And IMO, part of teaching her to be financially savvy is teaching her to live on less than she makes, and that debt is not a necessary evil of life.  Sending her with a credit card would be hypocritical of that, IMO.

 

If DH or I could get a credit card in the first place.  We don't have one and I am not sure we would get approved for one anyway.

post #148 of 172

Well, all I can say, happysmileylady, is that I feel sorry for your dd.  My mother came to visit us a few years ago when we were living in Germany and I had to pay for EVERYTHING.  She brought traveler's checks and could not use them anywhere.  We traveled to France, Austria, and Switzerland while she was there and most of the time, she couldn't even get them cashed.  Finally, back in Munich, she had to go down to the AmEx office and cash them in for cash.  She spent the last week just carrying around cash because most places didn't even accept them.  You might as well just send cash with your dd.

 

She will still pay exchange fees.  There will still be fees when using them.  They are no longer widely accepted and she'll probably have to go to the AmEx office itself to just have them converted to cash, so she'll be right back where you don't want her to be... with a form of currency that can be lost and not recovered.  I guess I just can't wrap my head around what you are saying because it make absolutely NO financial sense to me.  confused.gif

 

You seem to think that the issue is her losing the money.  I'd say that's the least of your worries.  The issue is that where she CAN use the traveler's checks, she's going to pay considerably more with extra fees, and the rest of the places she won't be able to use them at all.  I guess you'll figure this out in time... at your dd's expense.  (Quite literally because if it's her money she's spending, she's going to be paying a lot more for a decision you are making.)

 

Also, just FYI, you can get credit cards replaced immediately when abroad if you are in a major city with a regional office.  It doesn't take 4 - 6 weeks.  Even in a non-emergency situation at home, we get our cards replaced in just a few day.

 

 

 

 

post #149 of 172
Quote:
Originally Posted by velochic View Post

Well, all I can say, happysmileylady, is that I feel sorry for your dd. 

 



Huh?

 

I don't think this is called for.

post #150 of 172
Quote:
Originally Posted by laohaire View Post





Huh?

 

I don't think this is called for.

Why?  She is the one that is going to have to deal with the traveler's checks in Europe.  Not her mother or anyone else.  I feel sorry for her.  She's going to be on a trip of a lifetime and have to deal with a huge headache trying to get things paid for.  I'm not the only one trying to explain the difficulties of using traveler's checks abroad.  What's not to be "called for"?
 

 

post #151 of 172

I don't know if I just lived in a different dimension, but I've traveled to Europe using American Express Traveler's Checks, and don't recall them being a problem at all. I was 19 at the time, a little older than 16 but not by much - and I was on my own, not with a tour group helping me out. For sure, my memories of Eastern Europe are all about the trip, and not at all about the traveler's checks (heck, I almost don't remember anything at all about using them other than how fancy they looked). I'm really trying to figure out exactly what is such a major hassle that one would actually feel sorry for a girl going on a trip to Europe and having traveler's checks. That's just really a strong way of wording it, and I don't think it's called for.

post #152 of 172
I don't think traveler's checks will be a problem; even though there will be places that don't accept them (certain restaurants, for example), as long as there are banks, she can cash them there. That is what we have done: write out traveler's checks to a bank, and gotten cash for food, etc.

The pre-paid visa is a great idea; however, I don't see how that is much different than a debit card with a visa logo (for those who travel but don't have credit cards). They are ran the same way, I assume.
post #153 of 172

When was this?  I too traveled as a teen and young adult and that was in the eighties and early 90's.  TC were an accepted mode of payment.  However I can attest that in the last 10-15 years they have become more and more obsolete.  Heck- last year in Barbados I witnessed 2 American tourists have to go back to cruise ship and exchange their TC their and you can use US currency on the island!  The service fee was 25% so they (intelligently) decided to go back and get cash where the the fee was 5% to cash them. Needless to say they were pissed- they had left their CC on the ship so they wouldn't lose them. 

 

I also think velo has valid point- Has the OP actually asked her daughter what she wants and explained the options?  If she has funded a large chunk of her trip and has worked hard for some spending money I wonder how she will feel about throwing a large amount of her hard earned cash away on service fees and/or the disappointment of not being able to buy a treasured memento because the place doesn't take TC. She could easily take a portion of her  hard earned cash and apply it to prepaid Visa card. No credit check needed. 
 

Quote:
Originally Posted by laohaire View Post

I don't know if I just lived in a different dimension, but I've traveled to Europe using American Express Traveler's Checks, and don't recall them being a problem at all. I was 19 at the time, a little older than 16 but not by much - and I was on my own, not with a tour group helping me out. For sure, my memories of Eastern Europe are all about the trip, and not at all about the traveler's checks (heck, I almost don't remember anything at all about using them other than how fancy they looked). I'm really trying to figure out exactly what is such a major hassle that one would actually feel sorry for a girl going on a trip to Europe and having traveler's checks. That's just really a strong way of wording it, and I don't think it's called for.



 

post #154 of 172

It was in the 90's that I used traveler's checks. It's possible things have changed, I don't know. I still think it's over the top to feel "sorry" for a kid having traveler's checks. Advice is one thing, and I don't claim to know everything about money and traveling, but false pity like this isn't helping anyone, just driving wedges.

post #155 of 172
Quote:
Originally Posted by laohaire View Post

I don't know if I just lived in a different dimension, but I've traveled to Europe using American Express Traveler's Checks, and don't recall them being a problem at all. I was 19 at the time, a little older than 16 but not by much - and I was on my own, not with a tour group helping me out. For sure, my memories of Eastern Europe are all about the trip, and not at all about the traveler's checks (heck, I almost don't remember anything at all about using them other than how fancy they looked). I'm really trying to figure out exactly what is such a major hassle that one would actually feel sorry for a girl going on a trip to Europe and having traveler's checks. That's just really a strong way of wording it, and I don't think it's called for.


ETA: read you other post and now know you were there in the 90's.  A lot has changed since then and "90's" could mean 20 years or it could mean 11 years.  Depending on that, it's probably changed a lot more even. My mother visited us in 2005 when we lived in Germany and it was nearly IMPOSSIBLE to use traveler's checks except to go to the AmEx office and cash them.  When she did use them, they hit her with a hefty fee.  If this girl is paying with her own money and her mother is forcing her to use a means of currency that is going to cost her in fees and hardship, then yes, I feel sorry for her because I think even at 15 a person should have some say in the matter when it come to their money.  And I didn't say I "pity" her. 


Edited by velochic - 3/28/11 at 4:06pm
post #156 of 172
Quote:
Originally Posted by Drummer's Wife View Post

I don't think traveler's checks will be a problem; even though there will be places that don't accept them (certain restaurants, for example), as long as there are banks, she can cash them there. That is what we have done: write out traveler's checks to a bank, and gotten cash for food, etc.

The pre-paid visa is a great idea; however, I don't see how that is much different than a debit card with a visa logo (for those who travel but don't have credit cards). They are ran the same way, I assume.


I have done all the things being discussed here (traveled underage, with traveler's checks, with a tour group). Realistically, if this is a multi-city tour - getting into a bank is going to be a challenge. The tours are very packed, and banks keep bank hours. When you are tied to 24 other people it is hard to pop off to the bank. Heck it is hard to even pop off at the souvenir stand. It's not going to be impossible, but it will require researching what banks are going to be nearby to their POIs and then having a good relationship with at least one of the chaperones. While there are ATMs sprinkled everywhere these days, actual banks don't tend to be near tourist attractions. If this is the plan, some of this research should be done now to help her find out which banks have the most favorable fees, and which are located closest to the hotels they'll be staying in and the attractions they will be visiting.

 

Another possibility to look into is whether or not the tour company itself has TC cashing service. Some do, for a high fee, and it might not be available on a daily basis. Sometimes it is only available at the beginning of the trip.

 

It can be done. Especially if she cashes enough for 2-3 days at a time (at least $100). If you know any of the other parents that are chaperoning, you might want to enlist their help ahead of time.

 

If other people, who don't mind the use of credit cards want to travel to Europe you can purchase prepaid CC in Euros - locking in your rate, and avoiding transaction fees.

 

 

post #157 of 172


 

Quote:
Originally Posted by rhiandmoi View Post




I have done all the things being discussed here (traveled underage, with traveler's checks, with a tour group). Realistically, if this is a multi-city tour - getting into a bank is going to be a challenge. The tours are very packed, and banks keep bank hours. When you are tied to 24 other people it is hard to pop off to the bank. Heck it is hard to even pop off at the souvenir stand. It's not going to be impossible, but it will require researching what banks are going to be nearby to their POIs and then having a good relationship with at least one of the chaperones. While there are ATMs sprinkled everywhere these days, actual banks don't tend to be near tourist attractions. If this is the plan, some of this research should be done now to help her find out which banks have the most favorable fees, and which are located closest to the hotels they'll be staying in and the attractions they will be visiting.

 

Another possibility to look into is whether or not the tour company itself has TC cashing service. Some do, for a high fee, and it might not be available on a daily basis. Sometimes it is only available at the beginning of the trip.

 

It can be done. Especially if she cashes enough for 2-3 days at a time (at least $100). If you know any of the other parents that are chaperoning, you might want to enlist their help ahead of time.

 

If other people, who don't mind the use of credit cards want to travel to Europe you can purchase prepaid CC in Euros - locking in your rate, and avoiding transaction fees.

 

 



Good point about traveling in a group.  That makes sense that it would be hard to stop the tour and drop by a bank just for one person.  I'd probably make sure my kid had access to cash, traveler's checks, and a pre-paid visa - but if my family didn't have credit cards, as it is now, I doubt I would apply for one just for my teen to travel abroad.  Who knows by then, though, I may be open to it in the years to come. Good to know there are prepaid Euro CC's.

post #158 of 172



 

Quote:
Originally Posted by rhiandmoi View Post




I have done all the things being discussed here (traveled underage, with traveler's checks, with a tour group). Realistically, if this is a multi-city tour - getting into a bank is going to be a challenge. The tours are very packed, and banks keep bank hours. When you are tied to 24 other people it is hard to pop off to the bank. Heck it is hard to even pop off at the souvenir stand. It's not going to be impossible, but it will require researching what banks are going to be nearby to their POIs and then having a good relationship with at least one of the chaperones. While there are ATMs sprinkled everywhere these days, actual banks don't tend to be near tourist attractions. If this is the plan, some of this research should be done now to help her find out which banks have the most favorable fees, and which are located closest to the hotels they'll be staying in and the attractions they will be visiting.

 

Another possibility to look into is whether or not the tour company itself has TC cashing service. Some do, for a high fee, and it might not be available on a daily basis. Sometimes it is only available at the beginning of the trip.

 

It can be done. Especially if she cashes enough for 2-3 days at a time (at least $100). If you know any of the other parents that are chaperoning, you might want to enlist their help ahead of time.

 

If other people, who don't mind the use of credit cards want to travel to Europe you can purchase prepaid CC in Euros - locking in your rate, and avoiding transaction fees.

 

 


 

You've made some really great points.  I think that if the DD will use TC as a main form of payment it will be worth it to contact the hotels she'll be staying at to find out if they offer TC cashing services on site.  That would probably be the easiest solution. 

 

Have you discussed this with any of the other parents or chaperones?  How are others handling the issue?  If she is the only one with TC to cash she will have a harder time (breaking away from the group, timing, etc) than if several need the service.  And if she is the only one, as a chaperone I would be a bit annoyed at having to be responsible for finding cashing options if you haven't done your homework in advance.  I'd probably end up taking them and giving the girl cash just for convenience and cashing the darn things when I got home.

 

And yeah, you can get a credit card replaced in 24 hours in a major city.  Even my small bank will overnight a replacement VISA debit card if needed.  But the thing is, you can talk your way into a hotel with the cc number and letting the front desk or concierge call the cc company for authorization of the charge.  You can't do that with cash or TC.

 

HappySmilieLady, I kow you don't agree with a lot of what is being said.  However, I hope you take some time to think about the logistics of overseas travel and discuss the options with your DD as well as the chaperones so that you are all on the same page and know what to expect in regards to TC.  Some of the posters here have made some very good points that deserve consideration.

post #159 of 172

OK. I think I might have missed something here, but why can't the daughter just travel with her normal bank ATM card. As long as it has the maestro or cirrus logo on it then you can use it anywhere in the world. I have travelled extensively and have never had a problem. In fact, I've never come across an ATM that wouldn't take it. Though you might want to change your PIN to a 4 digit one if it is longer because French machines didn't like my mum's 6 digit pin.

 

Traveller's Cheques really are a relic.

post #160 of 172
Quote:
Originally Posted by ChristyMarie View Post
 And if she is the only one, as a chaperone I would be a bit annoyed at having to be responsible for finding cashing options if you haven't done your homework in advance.  I'd probably end up taking them and giving the girl cash just for convenience and cashing the darn things when I got home.

 

I see this concern as a pretty big one, tbh. If some of the chaperones have traveled extensively, it might be okay, but I'd imagine many of the parents are excited about the trip, too. Now, someone has to go with this one child to find a bank every couple of days, assuming the hotel won't cash them. That has so much potential to make your daughter an inconvenience, and really, I don't think that's fair to either her or the chaperone.
 

Quote:
Originally Posted by redvlagrl View Post

OK. I think I might have missed something here, but why can't the daughter just travel with her normal bank ATM card. As long as it has the maestro or cirrus logo on it then you can use it anywhere in the world. I have travelled extensively and have never had a problem. In fact, I've never come across an ATM that wouldn't take it. Though you might want to change your PIN to a 4 digit one if it is longer because French machines didn't like my mum's 6 digit pin.

 

Traveller's Cheques really are a relic.

The OP's daughter doesn't have a checking account. OP keeps saying "if we get one before then," so apparently there's some hold up in getting one. I agree, though, that it would be a simple solution to the problem.
 

 

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