What Form of Money Should One Carry in the Himalayas?

Well, the answer to these questions depends on where you are going and how long you are staying there.

Cash in Kathmandu
The Westernization of Kathmandu gives visitors to Nepal many options for accessing and using money. Cash, especially U.S. dollars, remains the "hardest" (i.e., preferred) form of currency. (In fact, U.S. dollars are required for tourist visas.) Dollars also have the advantage of bringing in the highest rate on the black market – usually a few rupees per dollar above the official rate.

The drawback to dollars, of course, is that if they are lost are stolen, they cannot be replaced.

Traveler's checks are widely accepted in Nepal, though not quite as universally as U.S. dollars. Traveler's checks receive a slightly lower rate on the black market than cash. However, for many people the ability to replace lost or stolen traveler's checks far outweighs this slight cost.

In the fall of 2000 Nepal Grindley's Bank installed ATM's capable of receiving cash funds in Nepali Rupees from a Visa or Mastercard (including many "debit credit cards" that withdraw funds directly from a savings or checking account). There are more than a dozen ATM machines in Kathmandu and one in Pokhara. In the tourist district of Thamel alone, there are at least three machines, including one in the Kathmandu Guest House. The exchange rate will also be the standard bank rate, so will be slightly less than the money changers in the carpet shops.

Many popular hotels, restaurants, shops, and trekking agents also accept credit cards. (Be aware that many of these businesses openly add a 3 percent to 5 percent surcharge.) Nepali banks also accept credit cards for cash advances and usually offer the advance in rupees. (Again, be careful where you receive the cash advance: Grindley's Bank does not add a surcharge, but a tourist shop like Alpine Travel does). Make sure to check banking hours in advance, as the banks are closed for many holidays.

Another consideration with cash advances is that many U.S. credit card companies charge a fee for a cash advance. To avoid this charge, we recommend a debit card, which works as a credit card but withdraws funds immediately from one's bank account, thereby avoiding a fee (assuming you have enough funds in your account back home).

American Express offers an excellent option for travelers. Gold card holders can cash an unlimited number of personal checks for U.S. dollars or traveler's checks. Thus, gold card holders can have open access to their checking accounts while traveling. (The annual cost for a gold card is $75).

So, given this maze of options, what do I recommend?

For the traveler who will be overseas for three months or less, I recommend a combination of cash and traveler's checks. The ratio between these two options depends on one's comfort level with traveling with cash. I also recommend carrying a debit card for large, unexpected purchases (a thanka, for example) or for cash advances.

For those who will be travelling longer than three months, I recommend the American Express gold card. One traveler I met used his gold card to write checks from his money market checking account. Thus, while abroad he was earning more interest than someone with a typical checking account, and he could withdraw money from this account in the form of U.S. dollars, traveler's checks, or local currency at any American Express office. In addition, he also received his mail at the American Express offices.

Bucks in the Boondocks
While trekking, it is almost always necessary to pay in rupees, so you must plan ahead. In popular areas, such as Everest and Annapurna, many lodges are very busy and can accept large notes (even a 1,000 rupee note). However, it's best not to assume that large notes are accepted in other areas. Travel with smaller bills in less popular areas.

If you run out of rupees, many lodge owners or other trekkers will normally change cash for rupees. However, they probably will not accept traveler's checks, so make sure you have some extra dollars before you head for the hills.

Other Countries
Visitors to India will find that major cities (e.g., Delhi) are similar to Kathmandu in the types of money they accept. However, in Northern India (e.g., Ladakh) credit cards are not widely accepted, and it is better to travel with cash or traveler's checks.

In Tibet, credit cards can be used for cash advances in Lhasa or Shigatse, but it is still recommended to travel with enough cash or traveler's checks to cover your expenses.

Travelers in Pakistan should depend more on hard currency. In the northern areas credit cards are not accepted, so visitors must have cash or traveler's checks. And cashing traveler's checks in Pakistan is no small feat--I once waited three hours to cash a $100 traveler's check in Skardu!