Explore Granada: Managing your money in Granada

Background
On January 1, 2002 Spain officially change to the Euro along with 12 other countries in the EU who decided to adopt the new currency. Those 12 countries are:

Austria

Belgium

Finland

France

Greece

Ireland

Italy

Luxemburg

The Netherlands

Portugal

Spain

Note the absence of the UK, Denmark and Sweden, which recently voted to keep their own currency rather than change to the Euro. Otherwise the Euro has made things a lot easier for travellers who now do not have to exchange money every time they cross a different border. While many miss the peseta few would disagree that coins are now easier to manage. Around 1992 Spain introduced a whole new set of coins for the peseta. Until the switch to the Euro you had to manage almost two of every coin (i.e.: two types and sizes of 25 peseta coins, two types and sizes of 50 peseta coins, etc.). To make it worse there were many machines for drinks, food, etc. which only took one type of coin.

Currency switch in Spain
In Spain there was a rush to convert pesetas earned in the black market (money not undeclared to the government) to Euros before the January 1st switch. Many chose real estate as a good way to "legitimize" their undeclared pesetas and this led to a steep increase in property values within the cities. The result has been prices for real estate. Most Spaniards still think in pesetas. Some stores still show the price in both pesetas and euros, and the shopkeepers are even more likely to convert to pesetas when discussing the price of an item with you. In the overwhelming majority of my conversations with Spaniards about salaries, real estate, cars and a half dozen other topics they still refer to the amount in pesetas. The result is confusion for me as I tend to think in Euros and dollars. If you want to keep up with amounts as they talk about them here then familiarize yourself with the following calculations:

1€ = 166 pesetas
100 pesetas = 0.66 €

What does it look like?
So what does the Euro look like? All coins share the same front but there is a different design for each country on the back. There are also different sizes and thickness of each coin so they are easily distinguished from one another. Below are photos of each of the eight Euro coins. Place your mouse over each one and await a second to see what the back looks like in Spain.

The day of the travelers check is over for me and a lot of people traveling in Europe. However it is generally wise to maybe have a few checks with you, although my last 6 trips to Spain (before moving) were all with about $50 in cash (which I never spent) and my ATM card. There are ATM's almost everywhere in the center thanks to the '92 Expo, and most support Plus, Cirrus, MAC and other popular systems. Just look for the signs next to the ATM or on the display itself. You will get the best rates from ATM's and I have yet to be charged a fee for using them aside from what my bank charges me. When exchanging the last of my U.S. dollars here at a bank I received a rate of 1.14 and was charged a commission of $5 (I could have done a bit better had I looked around). When I used my ATM to withdraw money that same day I received a rate of 1.09 plus the $0.75 my bank charges for me to use an ATM outside of their own system. (Note this was originally written when the exchange rate was much better!) The lesson: if you like to walk around for half a day and look for the best exchange rate, wait in line at a bank, get charged commission and still get a rate worse than an ATM, then bring cash and traveler's checks. If you prefer convenience and a better rate take your ATM card. ATMs are easy to use and all offer English as well as other languages. Sometimes the language can be cryptic: many refer to your checking account as your "current account", but that's about as diffcult as it gets. A note: don't panic if one ATM doesn't work with your card - I have found several which advertise the Plus system that refuse my card for some reason. The next day the same machine may accept my card, so if it doesn't work the first time move on to the next ATM. If I were traveling today knowing little about Spain I would recommend the following mix of credit cards, cash, traveler's checks, etc.:

Visa, American Express and Master Card. You'll be just fine without the Master Card, though.
$200 in travelers checks in case you lose everything
$100 in cash, and plan to come back with all of it.
My personal checkbook...why? With an American Express green & white card you can go to the nearest American Express office and cash a personal check. I did make the mistake once of bringing my American Express Blue card instead of the old green and white. Seems they will only cash your personal checks at the office with the green and white card, so keep that in mind if you plan to go this route.

-Locate an American Express office
-Locate any VISA/Plus ATM
-Locate any MasterCard ATM

Banks

Banks are generally open from Monday-Friday from 8:30am-2pm and sometimes on Saturday from 8:30am-1pm. From May to September they are often closed on Saturdays. Expect to wait in line much longer than you likely wait back home, and in some places you need to take a number and wait your turn. You need your passport to exchange money and some banks will allow you to use your credit card to make a cash advance. As I mentioned above, all banks will charge a commission when exchanging money or traveler's checks. If you need to exchange money at night or some odd hour try El Corte Inglés or a nicer hotel, although the rates will be less favorable. In every case it will be better to use an ATM than change money in a bank. In every case it will also be better to change money in a bank rather than an exchange house.

Opening a Bank Account

When should you open a bank account in Spain? If you are living here for a year or longer there are many reasons to consider doing so, especially if you plan to get your own apartment and handle your own utilities. Some of the things a bank account will help you with:

Mobile phones - you can recharge your mobile phone at any ATM, which you cannot do with a Visa or ATM card from outside of Spain in most cases. You can also get a contract phone instead of pre paid or tarjeta, phone, which will be cheaper in the long run. Some offices for Vodafone, Amena and Telefonica may tell you that you need a NIF (like a social security number), but other offices will let you set up a contract using your passport number.
Utilities - some practically require that you have a bank account, and if not setting up an automatic draft from your account is much easier than going to the bank or a central office during set hours, waiting in line and paying cash.
Health Insurance - almost every company covering foreigners requires a bank draft for health insurance and will not make other arrangements.
Bank fees - avoid being charged the transaction fee from your bank back home every time you take out money.
Safety - keeping your money in a bank instead of a shoe box in your house is always safer. Also, many people withdraw up to their limit from their home bank account to limit the effect of the transaction fee (smart), but have to carry that cash back home with them (sometimes risky)
Getting paid - whether you're working legal or not it's always good to have a bank account where your employer or the person paying you for contract work can make a transfer from their bank. Helps with the safety issue mentioned above as you don't have to carry a large sum of money home with you.

Opening a bank account as a non-resident in Spain is very simple. You will need to open a cuenta no-residente, or a non-resident account. Once you become a resident you can quickly change it over to a resident account, generally with no charges. They require a picture ID and most will accept a driver's license from home although a passport will make it a little easier. Some banks have different charges for non-resident accounts while others offer the same services (and fees) regardless of whether you are a resident or not. Cajas, much like credit unions in the U.S., offer cheaper fees but may charge you for other things when opening a non-resident account. I took into account not only the fees but also the banks network of ATM's or cajeros automaticos, to avoid fees for withdrawing from machines outside of my banks network. All offered online banking at no charge, although there may be some which charge a fee for this..

maintenance - charged monthly or every 6 months
card - charged annually and you may have your choice of cards with different fees
per transaction - some banks will charge you for every movimiento or transaction. Others do not, or give you a certain amount per month free

Exchange Rates

When comparing places to exchange money always check the rate and the commission, especially in currency exchange houses. Some places offer better rates but charge a higher commission. You'll have to do the math yourself, but it is easy to see how a $6 commission on $100 exchange could outweigh the 0.2 difference in rate. Unless you desperately need Euros exchanging at an excahnge house, the train station or airport should be avoided. If you are looking for an approximate exchange rate for today check out XE.com's converter or the graph above. With the current rates it is no longer so "cheap" to travel in Spain. I miss the days of the peseta.