In the city, the bank-run exchanges have recently had the best rates, about 10 kyat per dollar more than the black market rates. So far, such bank-run exchanges only exist in Yangon. There have been long lines of locals trying to exchange dollars for kyat. Recent exchange rates have been around 800 kyat to the dollar. Typically, exchanges set their rates twice a day.

These bank-run exchanges will exchange not only dollars, but also Euros and Singapore dollars. 
 However, this has not eliminated the need for crisp, unmarked US dollars. You still need US dollars to pay for hotels, flights, and admission fees.

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Recently, there have been changes in the banking laws in Burma, and banks are being allowed to open currency exchanges. So far, there is a report on Thorntree of one open in Yangon. The currency exchange does exchange at rates similar to the black market rate, not the official rate. (Will this mean they will eventually do away with the “official rate”?)
 Note that you still cannot exchange money at banks, but the banks are opening separate currency exchanges.

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There is a dual currency system: US dollars are used for paying hotels, flights, and entrance fees and the local currency, kyat (pronounced “chat”) is used to pay for taxis, meals in non-hotel restaurants, purchases from markets, etc.

The kyat, like currencies of many small countries, is not a convertible currency. You can’t order it from your bank or buy it in other countries, and outside of Burma, it is worthless. This is also true of the VN dong, the Laos kip and the Cambodian riel. But the kyat has additional complications.

There is an “official” exchange rate of about 6 kyat to the US dollar. However, the “real” exchange rate is varies widely, in the last year ranging from about 650 to 850 kyat to the dollar. In 2009, we got 1000 kyat to the dollar. As a traveler, you exchange money on the “black market” (jewelry stores, travel agents, hotels, etc). Indeed, in the past if you asked to exchange money at the airport exchange counter, they would tell you not to exchange money there because they had to use the official exchange rate. Recently, an exchange has opened at the airport that gives reasonable rates, not as good as you would get in Yangon, but only 40-50 kyat per dollar less. It is illegal for a foreigner to exchange money at a bank.

Worldwide, you get the best exchange rates for $100 bills. The difference in exchange rates for $100 bills versus lesser denominations is more marked in Myanmar than other places I’ve been.

You will want to take $100 bills to exchange for kyat and $100 bills to pay your agent for hotels and airfares, but take a variety of smaller bills so you can pay exact amounts as you settle bills for meals and incidentals at your hotels, pay admission fees, etc. You cannot guarantee that places will have good bills to give you change.

The best exchange rates are in Yangon. In Yangon, the best rates are at Scott’s Market. The farther from Yangon you get, the lower the exchange rates will be. In Mandalay, expect rated to be perhaps 40-60 kyat per dollar less, at Inle, they are even lower, perhaps 100 kyat to the dollar less. So it makes sense to exchange what you’ll need in Yangon.

US dollars, whether to spend or exchange, must be pristine. Bills that are wrinkled or worn, with ink marks or scuffs are not acceptable and cannot be exchanged or spent in Burma. I have known people who ironed their dollars to make them acceptable. If possible, order new currency from your bank for your trip. If that is not possible, ask them to save to the best-looking bills for you.

The national bank has a policy of not accepting bills that have even the tiniest tears or are dirty or have ink on them. Thus, places that accept dollars such as hotels and travel agencies are very particular about the currency they accept, as if the central bank won’t accept a bill, it cannot be exchanged. Their only recourse is to find a visitor who will exchange an unacceptable bill for an acceptable one.

Technically, private citizens in Burma are not allowed to possess foreign currency. Even those private citizens who are allowed to accept foreign currency (such as taxi drivers from the Rangoon airport or horse cart drivers in Bagan) are often hassled by government officials as they try to exchange dollars. For small vendors, exchanging dollars is a problem. If/when they can exchange them for kyat, they may be harassed and they will not get a good rate. Vendors often ask tourists to trade them kyat for the dollars they have previously accepted. Do the vendors a favor and only use kyat when you purchase. If you have extra kyat, do trade them kyat for dollars.

Because of the sanctions placed on Burma by most of the world, Burmese companies cannot accept credit cards. You will find some places (typically high-end hotels) that will accept credit cards to pay your bill with a 5-15% surcharge, as they use Thai or Singapore companies to process the charges. No American Express cards can be accepted anywhere. 
 If you find yourself really in trouble – out of money – there are a few hotels that will advance you money by charging your credit card, but you’ll pay about a 20% premium for this. So when you figure out how much money to take to Myanmar (Burma), add a good margin of safety. It’s not like the rest of the world where you can just find an ATM if you need to replenish your money supply.

By the way, if you are headed there via Bangkok, there is an ATM airside at the Bangkok Airport that dispenses US dollars.

What about other currencies? You may be able to find people who will exchange Euro, Baht, Indian Rupees, Pounds Sterling or RMB in Yangon, but the rates won’t be as good as for US dollars.

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First of all, it helps to have a context for bargaining. In cultures where bargaining is done, it is a part of the social discourse. It is expected that you’ll bid back and forth and come to a mutually agreeable price. Think of bargaining as similar to other scripted social interactions. “How are you?” “ I’m fine, and you?”

Start low so you have room to trade bids when the vendor comes back with a higher bid. Don’t start with the price you want to pay.

Remember that when it gets down to the final bids, you are likely talking about a few cents. Don’t bargain as if your life depended on getting the lowest possible price. Bargain with a smile. Be pleasant even when you are saying, “that’s too much.” Remember that you both want the same thing, the seller wants to sell you something at a price you’ll both be pleased with, you want to buy something at a price you’ll both be pleased with.

What Should I Start With?

So how much less than the starting price should my first offer be? There is no hard and fast rule. Sometimes you should offer as low as 10% of the asking price; sometimes you’ll be lucky to get 10% off the asking price. It helps to have some idea of what the item is worth. If you’ve wandered around a bit, you’ll have an idea of what other sellers are asking for the item. If you’ve been to a store with fixed prices and have seen an item, you’ll have a better idea of what it is worth.

If you are really nervous about bargaining, you can always simply ask if you can get a discount or if the seller will give you a “special price.” The seller will almost always offer you a lower price, which you can then either accept or can make a slightly lower bid. You won’t get a rock-bottom price doing this, but it can be a way to start learning how to bargain.

You can ask the price of anything with no obligation to buy, but once you start bargaining, you are obligated to buy the item if you and the seller come to a mutually agreeable price.

The first sale of the day is considered good luck, so sometimes sellers are willing to come down farther in price for that sale. After you pay, the seller may touch all of the items in the stall with the money you paid. I always enjoy this little ritual and laugh with the seller about the sale being good luck.

Always Know You Can Say No

When you are bargaining for an expensive item and you can’t come to an agreement, it is ok to say no thank you and walk away. Sometimes that will inspire the seller to come after you and offer a lower price, sometimes not. But you can always return later and resume your bargaining.

There is no need for a common spoken language to bargain. I’ve often bargained for items with a calculator passed between us. Perhaps the most important currency in bargaining is goodwill and a smile.

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Your Own Laptop – Best Solution

Having your own laptop with a personal VPN and your firewall turned on is by far the safest way to go. This is true for both Windows and Mac. I’m more familiar with Windows, both XP and Vista have a personal firewall that you should always have turned on when you are using it on an unsecured network to prevent others from coming in a using your laptop as a launching pad for such unsavory things as pornography, spamming or spreading viruses.

Personal VPN software

The personal VPN software I recommend is from Witopia. It currently runs 39.99/year which is very cheap for what it does. It’s very simple to use and quite dependable. You install it on your laptop and every time you are on an unsecured wireless connection, you double click on it and it creates the VPN tunnel within about 30 seconds. Actually, you can use it any time you turn on your laptop, even at home, and your IP will continually be different. If you don’t understand what an IP is, don’t worry! I initially purchased Witopia when I started spending more time working in coffee shops around Seattle. I now need not worry about someone in the area “sniffing” my network connections in plain text.

Many more reasons to install a personal VPN are explained here at the Witopia site. Witopia – Reasons to Install a Personal VPN

Here’s the one you’re most interested in while traveling, so I’m quoting it here:

“You use Wi-Fi Hotspots.

Although most don’t realize it, Wi-Fi Hotspots, whether paid or free, are horrifically insecure. You are literally broadcasting all of your data “in the clear” with typically no security whatsoever. This can include your e-mail, IM messages, web searches, and any other data sent or received over the wireless network.

It is shockingly easy for anyone to “sniff” and capture your data without your knowledge. Due to the ease of the crime, and the fact Wi-Fi Hotspots are typically frequented by folks with a little change in their pocket, a Wi-Fi Hotspot is a tantalizing place for bad guys to lurk.

One common tactic is something called the “evil twin” attack where the evildoer sets up a laptop as a seemingly legitimate Wi-Fi Hotspot. You connect to the Internet through “FREE Airport Wi-Fi” — or anything the bad guy wishes to name it — and although all seems fine you are actually sending all of your data through a hacker’s laptop.

Honestly, we’re not sure how often this happens, and it may even be pretty rare. Nevertheless, with data crimes, it usually only takes once to cause some pretty serious havoc in your life.

With WiTopia VPN service you could even connect through the hacker’s laptop and all they would be able to capture is a lot of encrypted gibberish they will never be able to crack.”

Public Computers

When you decide to use a public computer, even a computer at your hotel that you assume is safe, you’re taking a huge, repeat, HUGE risk. Even using an https address will not protect you from spyware and key logging programs or hardware. Always be very aware that when you choose to use a public computer, be it at the hotel or at an internet café, you are taking a huge risk of getting your passwords stolen if you type them in manually.

Bottom line, when you use a public computer, you should not log onto your bank accounts unless you are using some kind of password autofill program. Read more password autofill options below.

Password Autofill Software

I recommend password manager I use at home is RoboForm. For use while traveling, I’ve purchased Roboform2Go, which is a $20 add-on to the Roboform software. This will will provide you with everything you need to access your passwords securely while traveling using a USB drive. Be sure to purchase a U3 Smart USB drive, they have security built in. Bottom line, Roboform costs a relatively small amount for what it offers and I’ve gotten to where I can’t live without it now. It also does form filling for you.

If you’re looking for something free but not quite as robust as Roboform, check out Lastpass. It’s very simple software to use. All of your passwords are stored at LastPass (they use very secure 256 AES encryption). When you’re using an untrusted computer, you’ll log onto Lastpass using a one time password that you generated before you left (be sure to do this or you’ll be out of luck). Get this service before you leave, be sure to store all of your passwords that you’ll use on the road on it and then create about 50 one time passwords (or however many you think you’ll need to gain access to your password vault while on the road).

Other Opinions About Using Hotel or Other Non-Secured Computers

Quoted from CNET PCMag Article

“But really, you should do your best to avoid using nonsecure computers. Even if you keep a key¬logger from snagging your password, it might still take screenshots of key financial info. Your best bet is to implement a high degree of security on your laptop and resign yourself to lugging the darn thing along.”

What To Do Every Time You Finish Using a Public Computer

Clear the browser cache and cookies! Normally this is done by going to Tools – Internet Options.Don’t, I repeat, DO NOT leave any personal information on the computer.

In Conclusion

This isn’t about being paranoid, it’s about being smart. We’re beyond the days of leaving home and really being gone, but you can check your email and your bank accounts safely if you follow the recommendations shared in this article.

Bon Voyage!

About the Author
Cheryl is both a computer systems professional and as someone who travels frequently for both business and pleasure both here in the US and internationally.

Technorati Tags: computer fraud traveling, computer security traveling, password keeper programs, personal VPNs, travel laptops

When I am at home, my credit card company calls me if there is an unusual transaction on my credit card. When I am traveling, I need to check that for myself. If I were to find a fraudulent transaction, I have phone numbers I can call, collect, from anywhere in the world for each of my various accounts.

Of course with services such as billpay, you can pay your bills, transfer money, buy and sell stocks and mutual funds – effectively manage all of your money matters from thousands of miles away. Since I’m on vacation, I don’t want to spend a lot of time attending to these things, but I do want to know that my finances are running smoothly.

I have as many bills as possible sent electronically (utilities and credit cards) and have things like my mortgage paid automatically from my checking account. On most of my trips, I need to log on and pay my credit card bill or utilities.

With a few minutes every couple of days, I can keep tabs on my finances without interfering with my travel activities.

But there is one more thing to be concerned about as you pay bills and check your bank accounts: computer security while traveling. I’ve asked Cheryl, a computer expert to write about this important matter.

There are a number of things to think about as you consider using plastic in foreign countries:  fraud risks and protections, the cost of foreign exchange premiums, any miles or rebates you earn from your cards, and whether the merchant will give you a discount for paying in cash.

You will be able to use your Visa and MasterCard credit cards in many places in Asia.  In most countries, credit cards are accepted by hotels, many restaurants and many stores.  Street sellers typically don’t accept credit cards, nor do food stalls and such.  American Express cards are typically accepted at international hotels, but few other places.

Fraud protections and risks

First of all, there are differences between credit and debit cards.  A debit card subtracts your purchases from your checking account immediately.  A credit card bills you once a month.  But there are other differences as well.  If you pay with a credit card and there is a problem with your purchase, your credit card company can help you with it.  Not so for a debit card.

Also, if your card is lost or stolen a credit card company does not hold you liable for fraudulent use if you notify them promptly.  You do not need to pay any disputed amounts on your credit card. With a debit card, the money is subtracted from your account immediately, and if the use was fraudulent, you can dispute it, but the bank will take time before they re-deposit your funds in your account.  If your card is used fraudulently, the thief can empty your account and it may be some time before you get your money back.

Foreign Exchange premiums

Consider the foreign exchange premium on your cards.  Generally, the premium ranges from 1% – 3% of the amount charged.  Compare the foreign exchange premium with the premium you pay on ATM withdrawals.  This can help you make the most economical decisions about how to pay for things.  But the foreign exchange premium isn’t the only factor to consider as you choose how to pay for things.

Frequent flier miles, hotel points and rebates

Does your credit card earn you miles?  If so, that can change your computation about how to pay.  Generally frequent flier miles are considered to be worth 2 cents a mile. The miles may be worth more or less, depending on how you use your frequent flier miles.  Figure out how much each mile or hotel point is worth to you.

If you use your frequent flier miles for short domestic flight they are worth less than 2 cents a mile.  If you use your miles for premium tickets on international flights or upgrades on international flights, they are worth substantially more than 2 cents a mile.

Do you have a cash rebate card?  Consider that in your calculations as well.  My American Express card pays 1% on most purchases, but 2% on travel-related expenses such as hotels and 3% on restaurant meals.  Since the foreign exchange premium is currently 2.5%, it is worthwhile for me to use my card for hotels and restaurant meals.

Discounts for cash

You will find that many merchants will give you a discount for not using your credit card.  Such discounts are often in the 2% – 5% range.  Not all merchants will offer discounts and generally hotels and restaurants do not offer discounts.  If you are willing and able to pay cash for a purchase, it never hurts to ask for a discount.  Begin by presenting your credit card.  Sometimes the merchant will volunteer a discount if you pay cash, but if not, do ask.

Inform your financial institutions of your travel plans

For all cards – debit, credit and ATM cards – you must inform the issuer of when and where you are traveling so your card is not “turned off” for suspicion of fraud.  You should also have a phone number for every card issuer that you can call collect 24 hours a day from anywhere in the world in case there is a problem.

On occasion, you may find that a financial institution will not allow their cards to be used in a country that consider to be high risk for fraud.  Make sure you check on this long before your trip so you have the time to obtain a card you can use in your destination country.

What to do if your cards are lost or stolen

You want to inform the issuer of a lost or stolen card as soon as your realize the card is gone.  The 24-hour phone number mentioned above is the way to do this.  One way to make sure you have the 24-hour phone number as well as all of your card numbers is to email yourself an image for the front and back of each of the credit, debit and ATM cards you use.

Where you cannot use credit cards
No credit/debit cards can be used in Burma (Myanmar) and there are no ATMs.  If you are traveling to Burma, you may want to pre-pay any hotels that you can, often by using a booking service, as you generally cannot use credit/debit cards within the country.

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When I first began traveling internationally, I had to send a foreign bank draft to reserve my hotel room. Some hotels accepted American Express to hold a hotel room, but neither Visa nor MasterCard allowed this. Now, I can hold or pay for hotel reservations almost anywhere in the world via credit card over the Internet. Back then, options for getting foreign cash were travelers checks, exchanging cash or ordering foreign currency at home.

Exchange windows at airports often offered poor rates, and there were surcharges for travelers checks that often added 5% or more to the cost of getting the currency. Of course, that was still less expensive that ordering currency from home which added at least 10% to the cost.

Managing money while traveling has become easier and more convenient than ever before. But there are now so many options, it can be more confusing as well. This is a series of articles on travel financial issues.

Part I: Getting local currency

Always have more than one way to get cash in a foreign country. For instance, I always have an ATM card and I carry several $100 bills I can exchange if needed. Some people have a few travelers checks as a back up. While you can get a cash advance on your credit card, this should always be the last resort as it is such an expensive way to obtain cash (see below).

People often worry about having the local currency when they arrive at their destination. In my experience, there is always an easy way to get local currency at the airport. At the very least, there is an exchange window and usually, there are a number of ATMs as well as exchange windows. Even if the rate at the airport is not the best (and it is often a good rate), it will be a better rate than you could get outside the country.

In addition to an ATM card, I always carry several US$100 bills as my “emergency” money to exchange when there is not an ATM readily available or it is out of cash. If you are unsure of using an ATM in your (typically) sleepless state as you arrive after a long flight, just exchange some cash – make sure to ask for some small bills to pay your taxi fare.

Exchange Rates

Bureau de Change: Exchange rates are readily available online. You may want to check both a general foreign exchange website like www.xe.com as well as the website of a local newspaper. In most parts of the world exchange windows have had to become competitive, so the differential in rates has become smaller and smaller. It’s easier than ever to get a fair exchange rate. Large bills, US$100 or 100 Euro or Pound notes get the best rates. Notes should be crisp and unmarked.

Travelers Checks

Some people like the security of using travelers checks. If they are lost or stolen, they can be replaced. Travelers checks incur a charge to cash them, sometimes a minor charge, sometimes more. Many places (stores, etc) will not cash them, so bank or exchange windows are often your only options. In some countries one type of travelers check is preferred, and I’ve even heard of people being entirely unable to cash certain types of travelers checks. So travelers checks are not as convenient as they once were.

ATMs

ATMs are the most convenient way to get local currency in a foreign country. Sometimes they are also the most economical. By using the ATM, you get the bank-to-bank exchange rate, which is the best available rate. However, the bank adds a premium to this, usually ranging from 1-3% of the amount exchanged. At 1%, you usually will match or even beat the beast rate available for exchanging cash; at 3%, you’ll get a better rate for cash so you are paying a bit for the convenience.

But there may be other charges as well. You bank may add a per use fee for using foreign ATMs. This typically ranges from $1 – $5. The foreign ATM may also charge a fee, up to $3 or $4 per use. Some banks reimburse any fees charged by the foreign ATM; others do not. So the worst-case scenario is that you might be charged $5 by your own bank, $4 by the foreign bank, plus 3% of the amount exchanged.

If you are only withdrawing US$100 worth of foreign currency, you’ve just paid $12 or 12% for the use of the ATM. On the other hand, if your bank does not charge for use of a foreign ATM and reimburses any charges by the foreign bank, and only charges a 1% premium on the amount exchanged, you are getting the best rate possible. Always know what your bank charges before using your card in an ATM!

Another pitfall to watch out for is to make sure you know what kind of transaction you are making at an ATM. Usually, we think of taking money out of an ATM as cash coming directly from a checking account or a savings account. But you can use a credit card to get a cash advance at an ATM. This is probably the most expensive way to obtain cash, as you are charged an immediate cash advance fee (often 4%), plus any ATM fees, plus a premium on foreign exchange (usually 3%) plus interest beginning the moment you make the withdrawal – at rates higher than your credit card rate, often in the 20-25% range!

Note: If you want to be able to use foreign ATMs, you MUST inform your bank of where and when you are traveling. Otherwise, your bank will likely turn off your ATM access when it sees a foreign transaction. Make sure you have a 24-hour phone number at which you can call your bank collect from a foreign country in case you have a problem getting cash form an ATM.

What about using US dollars in foreign countries?

Some people wonder whether they can’t just bring lots of US dollars and use those instead of exchanging their dollars for foreign currencies. Pause and think about this… does your grocery store accept Euros or Hong Kong dollars in payment? How happy would a taxi driver in Chicago be to accept Thai baht or Malaysian ringgit? While sometimes merchants in say, Vietnam, will accept US dollars in payment; remember that they incur the expense of exchanging the dollars.

A street merchant may be willing to accept the dollars or may even quote prices in dollars if it will get them a sale that would otherwise have walked away. But the merchants need the local currency to transact their own business. I consider it more respectful to use the local currency. Prices quoted in dollars in foreign counties are higher than what you would pay in the local currency.

There are several exceptions I know of in regard to using the local currency. Several central and South American countries have independently adopted the US dollar as their legal tender: Panama (used along with the Panamanian Balboa), Ecuador and El Salvador. Several Caribbean Islands and several islands in the south Pacific also use the dollar. East Timor also used the dollar.

In Cambodia, the US dollar is the preferred currency for everything except small purchases. For a traveler in Cambodia, probably the only Cambodian riel they will handle will be small change they receive for purchase made in US dollars.

There was a time when the US dollar was king. People in foreign countries, especially those with non-convertible currencies wanted US to protect the value of their savings. So it was often to your advantage to exchange money on the “black market” to get a better rate. Those US$100 bills became someone’s savings account. This is no longer the case.

Special note

Some currencies are not convertible: Vietnamese Dong, Lao Kip, Cambodian Riel, Nepal Rupees, Indonesian Rupiah for instance. This means that they cannot be exchanged for hard currencies at official exchanges outside the country, so are effectively worthless outside the country, Also, it means the currency is not officially obtainable outside the country. While you might run into a traveler willing to pay you for your leftover currency, plan to spend or donate it before you leave.

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