Getting Your Money Out Of China

I spent 3 years working in mainland China and was paid in the RMB currency. Unfortunately, if you want to convert RMB to any other currency, it is a giant hassle. In mainland China, you can only do it at a bank and you need to have the following documentation:

  • Your visa, work permit, and residence permit proving that you are legally in the country and legally able to be employed.
  • Your paystubs proving how much you earned.
  • Your tax statement from the local tax bureau (Beijing Haidian in my case), proving that you paid your taxes, and the amount of tax paid has to exactly match what is on your paystub.

So, yeah, basically good luck with all of that. You’re probably going to be stuck with a whole lot of these.

100 RMB banknote

Somehow I managed to get most of my money out of the country, but I still have a not-insignificant amount tied up there. This didn’t really bother me much while the RMB was appreciating versus virtually every currency, but now the opposite is true: the RMB is now depreciating versus other currencies.

There are four loopholes for getting your money out of the country. None of them are particularly easy to use, and they all involve some degree of risk. However, until the RMB is more freely traded, these are the available options.

$500 at the airport: Anyone can change up to USD $500 worth of RMB to foreign currency at the airport. Most Chinese international airports have a branch of a Chinese bank (usually Bank of China) where you can do this at the official exchange rate with no fees. Don’t use Travelex or any of the other privately owned kiosks, or you’ll get the official rate plus a whopping fee.

Hong Kong: You can change effectively unlimited amounts of RMB to other currencies in Hong Kong. The exchange market is competitive, and there are many exchange booths and companies along Nathan Road. You can actually get better rates from some of these small, private companies than Hong Kong banks. No identification is required and no questions are asked. However, you have to get the money across into Hong Kong from China, and it isn’t legal to transport large sums of RMB out of China. However, it’s not illegal to transport large sums of RMB into Hong Kong, and you don’t even need to declare the money you bring in. So, if you’re not stopped on the way out of China, you’re golden. Usually, you won’t have any problem with a backpack full of RMB notes if you’re not obviously struggling under the weight, but if China Customs catches you they will keep all the money. Not for the faint of heart! This method also works in Macau, but the exchange rates are less favorable and Customs is a bit more suspicious in Zhuhai because of large sums of money frequently taken across by Chinese gamblers.

Chinese Friends: Chinese citizens (with a Chinese ID card) are allowed to exchange up to $50,000 USD worth of RMB annually. Once you have foreign currency you can wire it anywhere out of the country, so a Chinese friend could change your RMB into USD and then help to wire it to your US account. However, this can be risky. How good of a friend is your friend? Once you send the RMB to their account, you legally have no recourse. Your friend could take the money and disappear. Unfortunately this can and does happen. You also need to consider the emotional impact that handing $50,000 to a friend who makes $10,000 per year can have. This could unexpectedly change the dynamics of your friendship.

China UnionPay: If you have a Chinese bank card, it has a China UnionPay logo. In fact, it’s a very maddening logo, because it’s the only one that foreigners can get on a Chinese bank card (Chinese people can get a card with a Visa or MasterCard logo that is far more widely accepted, but this isn’t available to foreigners). Now, when is the last time that you saw a China UnionPay logo anywhere outside of China? If you saw one at all, it was likely on an ATM and you probably paid some pretty ridiculous fees if you used a Chinese bank card to withdraw money abroad. To give you an idea of just how hard it is to use China UnionPay at ATMs abroad, there is no ATM in the entire country of The Netherlands that accepts China UnionPay.

So, what about using your card for spending? It is pretty well known that merchants widely accept China UnionPay cards in mainland China, Hong Kong and Macau for purchases, but did you know that China UnionPay also works in the US almost anywhere that you can pay with a debit card? Just swipe your China UnionPay card and select “debit,” then enter your PIN. As long as the terminal is able to accept a 6-digit PIN, your payment should go through just fine. Note that you cannot get cash back. The charge will go through on your Chinese bank account in USD converted to RMB at the official rate on the day it is processed. There is no foreign exchange transaction fee and there are seemingly no restrictions on the size of transactions. Since you can’t get cash back, this is viewed as “consumption” rather than a purchase of foreign currency, and isn’t subject to the same restrictions. Obviously this won’t work to get large amounts of money out of China in one go, but you can easily spend your RMB on everyday purchases.

Working in China is an incredible experience, but be sure that you plan how to get your money out of the country! Hopefully these tips will help if you find yourself in a similar situation.

Will An App-O-Rama Clobber Your Credit Score?

In February, I did an App-O-Rama and applied for several credit cards in order to secure bonus miles to use for upcoming travel:

  • Citi Aadvantage Visa: 50,000 mile bonus, annual fee waived the first year.
  • BofA Alaska Airlines Visa: 50,000 mile bonus, annual fee not waived.
  • Chase Marriott Rewards Visa: 60,000 point bonus, annual fee waived the first year.
  • US Bank Avianca Visa, 40,000 mile bonus, annual fee waived the first year.
  • Delta American Express, 100,000 mile bonus, annual fee waived the first year.

Note that all of the above offers were exceptionally good ones. One was only available for 2 weeks, and none of these offers are now available.

This is the first time I applied for so many credit cards in such a short time, and I expected an impact to my credit score. I considered carefully whether I should really do this, but given that I don’t really need credit for anything (I have no debt except for my mortgage and I don’t need any), I decided that it didn’t really matter. I was approved for all of the cards, and didn’t have to call any reconsideration lines or anything crazy like that. Citi didn’t approve me “on the wire,” but after a day they approved my application manually and I received the card a couple of weeks later. I have properly received all of the bonuses except for the US Bank Avianca Visa, which posts 8 weeks after the final statement in which the minimum spend is met.

So, the impact to my credit score? After opening the new accounts, it dropped from 820 to 794. This was a pretty substantial hit, although it’s still in roughly the 95th percentile of American credit scores. The more interesting thing is what happened 3 months later after using all of the cards to meet minimum spend requirements and paying off the balances. My credit score went up to 830! I was pretty surprised to see this, and my credit score is now in the top 1% of American households.

The key takeaway? If my experience is any guide, don’t worry too much about the long-term impact to your credit score from opening a bunch of accounts to earn the signup bonus. In my case, there was actually a positive impact from signing up for a bunch of credit cards and going on what amounted to a massive shopping spree. I’m not sure that this is how things should work, but in my case, it’s how they actually did work.