Banking Problems while Traveling

Many times I travel from North America to Europe, there is a problem with any of my Bank cards, either my regular Debit Card or a major Credit Card. The problem being not, that they are stolen or compromised by some hackers, the problem is always with the Banks themselves and their method of contacting them when such emergencies arise. Over the past years this situation has worsened because of the changing and more complex security devices the Banks invent. There are two types of banking privileges that can be cancelled by a Bank while out of country: (a) Using the bank card to get cash out of a banking (ATM) machine, or for payments; (b) access to online banking. Both are important to have as a traveler while having to rely on a mobile phone. But the worst situation arises if there is no way to contact the Bank. Mostly for technical reasons, telephone services, expensive mobile phones (foreign SIM cards and providers), and the banking telephone system itself: Either offering an international toll-free number, or even worse offering clients a call collect number. On another occasion, years ago, when my bank card got cancelled, I called a “collect” number, got someone from my bank on the phone who told me: “we do not accept charges”.
I have two cards, my regular bank card (that works via ATM, international Interac and PLUS* displayed almost anywhere), but which I not use anymore because it got cancelled in Europe (security reason, because I had removed several times a few hundred €). And my Credit Card, most precious, because it can be used anywhere for paying anything even food and super markets, and cash advances via ATM. Two cards from two different banks, I have been client of for at least thirty years.
However, if using a credit card for all payments, then when the payment for the card is due, it needs to be paid using online banking. One cannot pay off a credit card with the same credit card. This time in Europe for three months both my bank cards got cancelled/or suspended: (1) Credit Card because I accessed my online banking with my iPad tablet, a device the bank did not recognize. At least I could connect easily with the Bank and resolve that issue. (2) My online banking with my regular bank, because of a new security system, my error in logon, and telephone connection problems (I have an old unblocked cell phone, using a foreign SIM card), on my cell phone cannot enter other than regular phone numbers, but not bank card numbers, therefore, when calling I got cut off by my foreign phone provider.
This time I have someone here in Europe try out with a smart phone the process to connect to my bank with their ‘international toll free number’, going thru the process. If it works, then it is that old regular cell phone of mine, that is not usable. From all this, it appears that the safest way to have any money on you (at least for food) is, to take sufficient cash with you. Like in the old days. Either way, I still always inform my Banks that I will be out of country, and where, and how long.
It should always be remembered, that any banking or debit or credit cards are property of a Bank, not property of a client. Therefore, can be cancelled/suspended anytime by the Banks’ security system. The client does not need to know the reason. The client only needs to store their money with those Banks.

ON BANKING

Your Return on Investment. == FOOD FOR THOUGHT ==

Basically there are two ways of loosing money in a Bank: (1) The Bank gets broke and has not enough capital to pay out all of its customers (remember world-wide banking crisis), once the big run for it starts. (2) You buy an investment and receive a little bit of interest. And it adds to your overall income and bumps you up into a higher tax rate.

Usually at the time when you buy – be it bonds, or GIC’s or any other instruments – the promised interest rate is typically higher than the actual rate, once you have deposited your cheque into your Bank.Then of course, the Bank cannot promise any rate of interest to you, because of changing bank rates.

Here in Canada we have another type of instrument – that is the Tax Free Savings Account TFSA. Depending on your Bank, the interest rates paid to you are typically low. If many are taking advantage of this TFSA, then the Government has some money to work with. In fact, it helps the Government more than it helps you because the interest paid is negligible. Other investments are usually more subject to losses, such as Mutual Funds, Trust Funds. Or, be careful, buying any IPO’s – Initial Public Offerings. Wait a little until their value drops.

I did my homework. Had some money in one of those Mutual Funds, a big fund, which in fact is a ‘Fund of Funds’. Dangerous stuff, because one cannot easily find out what type of companies, corporations, financial institutions this fund invests in. I spent one day to get to the bottom of it and found: Several obscure banks – of unknown origin and country – that did not even exist. Now I knew why I lost so much in this FUND OF FUNDS (which by the way had been solicited). One year I decided to sell out a big chunk of my money (in my retirement fund) that was invested in mutual funds.After that I could sleep much better.

Per contrast: How safe would it be to stuff your money – in cash – under your mattress, providing you live in a save neighbourhood, and your housing does not burn down. What are the chances of that ?

And my advice to investment advisors: Try not to sell mutual funds to clients who are into their 70s, because those funds are for the long haul.

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