* Citibank, how dare you reject my credit card?

May 1, 2008.

We arrived in Collioure after 24 hours travel, with no problems. Our first stop, after unpacking the car, was a pizza and beer in town, where we were greeted by our friend and waitress Sophie. The French pizza, as always, was excellent.

The next day, we used the rental car to shop for ‘large’ items and other things not available in our small village shops. At first, everything went smoothly.

The first problem occurred when Pat tried to purchase a bracelet at a small jewelry shop in Collioure. Our MasterCard, which had worked all day at other stores in and out of Collioure, was rejected. We tried again with the same result.

We first thought the problem was that this vendor, a new store, may have had the kind of credit card machine that only accepts cards with chips. (American credit card companies, apparently never having heard of globalization, still don’t have chips twenty years after they were introduced in Europe. More about this later.)

Then we went to buy some wine at the shop we frequented last year. They had the same credit card machine they had last year, but it, too, rejected our purchase. So it was not the chip that was the problem in this store.

A bright point of light in this otherwise gloomy story. The lady in the wine store insisted we take the wine without paying for it. “I know,” she said, “you’ll be back tomorrow.” We took it but didn’t drink any until it was paid for.

Now I’m on the phone with Citibank. I explain what happened.

“What caused the problem?

“It’s security checks,” the customer service representative says.

“But I told you two months ago we were going to be travelling, and every country we would be in.”

“It’s security checks,” she repeats, following the script.

“How do the security checks work?”

“We can’t explain it.”

Can’t? Or won’t?

“I think it’s the absence of a chip. Can you send me a card with a chip?”

“We don’t have one,” she says. “But we’re considering it.”

This is how to lose the international economic competition. Citibank, certainly a major player, is ‘considering’ chips! Right on top of things, aren’t we!

“So what are we to do?” I ask. “We’re going to be in Europe for the whole summer. Are we to live in constant fear of being embarrassed by having our Citibank MasterCard rejected in shops and restaurants?” There’s no answer.

“Did you change the security criteria for my account?” I ask.

“No.”

“You haven’t changed anything in 2008?”

“No.”

“Then why is it rejecting now when it didn’t before?”

“Well, the vendor is supposed to call us to get an ok on the card.”

“From France? And what language will the Citibank representative be speaking? And how does the vendor know he’s supposed to call? And what makes you think he’s going to take time to call when he has other customers waiting to be served?”

None of these questions are answered. But the Citibank customer service representative does say she will contact security, and they will ‘relax’ the security criteria so our card will not be rejected, at least not often.

“Can I please talk to your supervisor?”

The supervisor repeats the same unhelpful information, and casts doubt on the only solution proposed by saying they are going to ‘ask’ security to relax the criteria, but cannot be assured they will.

This is customer service that doesn’t serve customers.

This is a major American company out of touch with the rest of the world.

We have been Citibank MasterCard customers for years. We pay every bill in full before the due date. We informed Citibank about our travel plans. We don’t deserve to be treated this way.

The next day, we pay for the wine with cash. The following day, we try our credit card again –same store, same credit card machine – and it works. Is the story over? We’ll let you know,

Meanwhile, we applied for an American Express Blue card, a card with a chip.

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For more information about credit cards without a chip, please see Frommer’s 11-20-07 article titled “U.S. Credit Cards Lose Their Cachet in Europe.”  Click …

http://www.frommers.com/tips/article.cfm?tipID=MONEY&articleid=4793&t=U%2ES%2E%20Credit%20Cards%20Lose%20Their%20Cachet%20in%20Europe

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To get an idea how long this problem has been known, perhaps not to Citibank, check out this 2001 article in the New York Times, titled, “CREDIT CARD CHIPS WITH LITTLE TO DO.” It explains some of the reasons American companies, at least in 2001, had not adopted the chip. Click …

http://query.nytimes.com/gst/fullpage.html?res=9F00E5D6103FF931A2575BC0A9679C8B63

 

* transferring funds from the US to France … inventing a better way

 

Periodically, I have to transfer funds from our Key West account to our Collioure account. I have done this, until now, by writing a check on the KW account and depositing it to the Collioure account.

So I write a check on June 26 and take it to the bank. They’re used to me now, and understand how to deposit a check in dollars, converting it to euros and sending it off.

But where does it go? Not until July 9 does it finally does clear my Key West account, but by July 19 (23 days from the deposit), I am not seeing the money in my Collioure account.

“Ou est le euros?” I ask.

“Non arrive,” answers the bank clerk.

Soon, if the money doesn’t hit my account, I’m going to be out of funds, with automatic billings from the electric company, the internet company, and the syndic quarterly charge about to appear.

I write an email to my bank in Key West, asking if there is any way to speed up this process.

Their answer is a classic excuse for a really ridiculous delay in this age of the instantaneous internet…

“Thank you for contacting us.  When a check from the US is deposited in an account overseas it has to clear foreign collections before any credit is given to the account.  This generally takes about three weeks. The fastest way to transfer money from country to country would be through a wire transfer. While this method would be quicker than depositing a check there is a $50.00 international wire fee and it can take up to five business days for the transfer to be complete. Have a great afternoon.”

I think about the “instantaneous internet” and it comes to me there’s a better way.

I walk up to the ATM machine in my Collioure bank, withdraw 300 euros against my Key West account, turn around and immediately deposit the 300 euros cash into my French account, where it is of course instantly available.

Total expired time … less than 90 seconds (versus 3 1/2 weeks and counting).

Total cost … $1.50 charge against my Key West account for the use of a “foreign” ATM machine, which would apply to any ATM in the U.S. or elsewhere that is not my bank.

Of course this approach won’t work for large sums of money, but I email my Key West bank to increase my daily ATM limit to a number that will work for my needs.

managing our retirement travel budget

                      

As we enter our second year of retirement travel, living as most retirees do on a relatively fixed income, I have refined my process for budgeting travel expenses and then comparing actual expenses versus the budget.

The format is easy. The discipline to do it, and re-do it, is a little harder.

I use a simple spreadsheet. In the left-hand column, each trip is listed. This year’s trips (so far) include Mexico and Cherry Hill, NJ before we go to Europe, to and from Collioure in May and October, then Nice, Normandy, Ireland, along the Pyrenees, Paris (twice), Florence, Tuscany, Barcelona on the way back to the U.S., and New York City/Cherry Hill in December.

The expense categories, each in its own column, are the obvious: air travel, train and other travel, hotels (if it’s not a home exchange), car rental, and a daily spending allowance for food and entertainment. The daily estimate varies depending on the destination and whether any of our children are with us.

Thinking through the expenditures also forces thinking through all of the logistics, and sometimes reveals a gap to be filled. For instance, if the flight from Girona leaves early in the morning, we’ll have to go the night before and stay in a hotel. That’s part of the trip expense.

We used to have a category for travel purchases, but these have become relatively insignificant since retirement. We don’t need as much, and luggage restrictions pretty much preclude anything heavy.

I start out with pure estimates for each expense category. Sometimes, these are pretty close, sometimes not. The important thing is to have some number in each category as a placeholder until better information is available.

As we make air, hotel, and car rental reservations, I substitute the known figures for the estimates. At the same time, I update my Outlook Calendar with the now confirmed details, and remind myself to print out driving directions for each trip. The itinerary, all confirmations, and the driving instructions will form the trip docs package that we’ll carry with us when we travel.

After each trip, I’ll enter the actual expenditures from our credit card and bank statements, allocating ATM withdrawals to the proper trip as best I can.

This exercise lets us know what we’re spending and how it fits into our overall (evolving) budget for the year, and also what this means to our projected budgets for future years.

For me, it’s very comforting to have all these numbers accurately recorded and the long-term projections updated to reflect our most recent actual experience. Once that’s done, I’m free to enjoy what we’re doing without worrying about the cost.

about euros and dollars

We wire transfered the purchase price for our apartment to the notaire in France from our bank in New York, converting dollars to euros and paying the small fees involved.

During the purchase period, I was a daily follower of the euro/dollar conversion rate. When the euro first arrived, in 2002, it was roughly 1/1 with the dollar, but by July 2005, when we signed our purchase agreement, the ratio was 1.22, which means it takes $1.22 to purchase one euro. Our 170,000 euro purchase price thus equated to $208,000.

Over the summer, the ratio rose to 1.25, but by the fall, it was back down to 1.23 for our final wire transfer. It could have been much worse, or better, and this fluctuation of the euro/dollar conversion rate is a major uncertainty in making a foreign real estate purchase, and also on the potential return when you eventually sell the property.

The rate peaked recently at 1.33. If we sold at that rate for the same euro price we purchased, we would gain about $12,000 when we converted the euros back to dollars. 

Notaires and tontine

Some aspects of the mechanics of purchasing a property in France are important to our story.

our notaire 

France has strict procedures to protect both buyer and seller. Central to the transaction process is a public official called a notaire, not an attorney and not a notary public, but sharing attributes of both. We had read about notaires and their role in Hampshire’s book. Kristina, bless her, who by now is in Collioure, which is why we had to switch from her apartment after two weeks, recommends a notaire who speaks English. We make an appointment and drive to the next town of Argeles-sur-mer.

tontine 

By this time, we have already signed a purchase agreement, although we still have the option to back out. The notaire’s office is modern and professional, and after meeting with him, we feel fully confident to go ahead. Our discussion includes something called a tontine agreement.

In the normal French real estate practice, if a husband and wife buy a property together, and one dies, the half interest goes, not to the surviving spouse, but is split equally among the children of the deceased spouse. We preferred that the property would revert to the surviving spouse, and to all six children equally when we are both deceased.

There is a provision which can be inserted into the purchase agreement, called a tontine, which allows the surviving spouse to receive the interest in the property. No one will tell you about it. No one will suggest it. Had we not read Hampshire’s book, we would not have known. But we do know, and our notaire agrees to incorporate a tontine provision in our agreement.

When we actually receive the papers, months later in New York, it does not include the tontine, and it takes a phone call to France and a revised agreement to finally get the agreement we want.

remote financial management

It is possible, and not difficult, to receive and pay all of your bills over the internet, no matter where in the world you happen to be. There are three basic approaches.  

credit card payments  Arrange for vendors to automatically charge your credit card. We do this with repetitive vendors with whom we have a trusting relationship. But still, we check. You can go on line to view your credit card charges, payments and statements. No paper. No bills in the mail. Each month, I epay my credit card bills, over the web, from my home bank account.

automatic epay   Most banks have on-line banking, whereby you can view all transactions and make electronic payments. Epay (electronic payment) can be automatic, if you authorize a vendor, say your mortgage company, to charge each month directly to your account. If you do this, you should check your bank accounts periodically, on-line, of course, to reconcile charges to date and to assure that you have sufficient funds to pay upcoming bills.

directed epay  For other bills where automatic payment is not feasible or not desired, you can arrange to receive bills by email, set up a vendor payment account on your bank’s site, and then enter the payment details manually through your bank’s on-line site.

epay considerations

Get everything as organized as possible before you leave home. But, if you have Skype, you can call your bank and/or vendors whenever there’s a problem or question.

Social security and retirement annuity income can be automatically deposited to your checking account, and IRA and other funds can be electronically transferred from other accounts. But you need to keep all of these transactions in balance.

I no longer keep a written bank book. Instead, I have set up a spreadsheet where I enter all receipts, payments and transfers. I reconcile my spreadsheet bank book to the web balance at least twice a month.In addition, I enter upcoming receipts and payments in chronological order, calculate what the balance will be, and transfer any funds needed to make the payments.

We have made the same arrangements with our French bank and French vendors (telephone, electric company, etc), and once established, it works fine.

TIP: monitor automatic bill paying very closely, especially in the early months, to assure everything is as you directed.