Why won’t you take my money?

Part of the reason Bulgaria’s economy is stuck in minor obscurity is because they make it extremely difficult to spend money here. I’m not saying prices are so cheap that it’s hard to spend money; I’m saying that even if I wanted to buy something expensive I would have to jump through hoops to buy it.

First of all, credit cards are nearly unheard of. Bulgaria is essentially a cash only society. People pay their rents in cash, they stand in line at the local telecom to pay their phone bills in cash, cable TV – cash, fine dining – cash. Everything is cash. Companies even pay their employees’ salaries in cash. I guess it’s not entirely the people’s fault – banks haven’t really caught on to the whole internet banking phenomenon. All the banks have a website, but you can’t do much at the site other than read about what services the bank will provide if you stop by in person. They won’t even mail you a statement. You have to go to the bank, request a statement and pay for them to print the statement out.

Let me illustrate how all of this leads to a slugging economy. Now, say you decide to go out to the shopping district for a few hours. All of this is happening on Saturday because you work during week. By the time you get out of work the stores are closed, so the only time you can go shopping is on Saturday. Luckily, some business have graciously decided to remain open for those people that must work during business hours, so they can make money, so they can actually afford to buy stuff (many businesses do not follow this challenging concept). Anyway, you pass by a store and see a diamond necklace that you know your wife would love. The necklace costs 900 BGL (about $550, BGL stands for Bulgarian Lev), but you make decent money and think this one purchase will stop your wife from pestering you for at least a month. You want to buy it. The store wants to sell it. Sounds easy, right? Wrong. You only have 34 BGL on you and the store doesn’t even know what a credit card is – but, you do have a debit card. Oh, too bad the ATM machines will only let you take out 200 BGL at a time. Wait, you remember there are a couple ATMs in town that let you take out 400 BGL (strategically unmarked so they only way you know if it’s a 200 or 400 BGL machine is to you put your card in and try to take out 400 BGL). Also, 400 BGL (~$250) is the most any ATM will let you take in a day. So, even if you took out the maximum from the ATM, the earliest you could buy the necklace would be 3 days from now. Screw it – the wife will have to live with some flowers. …See what I’m talking about?

Then, to compound the problem, the ATMs only give you 20 BGL notes. That’s fine for diamond necklaces, but since food, beverages and taxis are so cheap, half the city won’t even take a 20 note because they can’t make change for it. So here I am with a fistful of cash, I’m starving and freezing, but I can’t buy a slice of pizza or get a taxi ride home. I spend no less than 10% of my waking hours trying to generate situations where I can break my 20’s. A 2 BGL note is the most coveted thing in my wallet because I can spend it anywhere.

All this leads me to open a local checking account because, a) I want to go to the bank and take out small notes and b) I’m tired of having to pay $5 to Bank of America every time I use the ATM (the fee they charge for overseas withdrawals). As I mentioned, everything is cash only so I have to go to the ATM a minimum of 3 times just to pay my rent. That’s a $15/month minimum charge from BofA – and usually $20, because I like to eat as well. It also means I need to plan a minimum of 3 days in advance to pay my rent. Of course, none of the coveted 400 BGL ATM’s are near my apartment so for 3 days prior to rent being due I find myself trekking all over Sofia. Anyway, I was tired of all this so it was time for a local account.

I go to a local bank – First Investment Bank, which came recommended from local Bulgarians as a good bank. Plus, it has an English name, which I like. The English name conjures up visions of English speaking tellers who will understand me when I want to open an account. Well, my first visit didn’t pan out quite how I had envisioned it. I finally found an English speaker (probably the only one there) who could help me. I told her I would like to open a checking account. She had no idea what I was talking about. I told her I would like to open a chequeing account (thinking that saying it with a British accent may get better results). Another blank stare. “I want to open some kind of account where I can use the ATM (“Bankomat” in Bulgarian) to take money out.” That got a glimmer of understanding. So we set up the account. Another limit to your ability to spend money in Bulgaria is a preference I had to elect. I had to choose the maximum amount I could take out of my account if I showed up in person at the bank and wanted my money. The highest I could elect is 3000 BGL. So, if I had 10,000 BGL in my account and I wanted to go to the bank and take it all out to buy, say, a used car (remember, cash only society – although for new cars I’m sure you can get a dealer loan). Nope. Sorry. You can only have 3000 BGL of your own money. Like I said – they make it hard to spend money here. Anyway, back to the account story. So I opened my account and the rep asked me how I would like to deposit my money.

Now there are some interesting peculiarities about the international banking system which don’t make sense to me. For example, if I want to electronically transfer funds from my Bank of America account to my new First Investment Bank account I would have to pay Bank of America a $40 international wire transfer fee plus $2.50 for a statement of that transfer (no, you can’t not elect to get the statement). Then First Investment Bank charges me €10 to receive an international wire transfer from Bank of America. To summarize – for a transaction with no human interaction, that is essentially free for both banks, I get charged over $50. Now, if I want to write a Bank of America check to myself to deposit funds – something that requires a bank representative to physically verify the check, photocopies to be made, special forms to be signed verifying First Investment Bank received the check, those forms to be verified by a bank representative, the check to either be mailed or scanned and emailed back to the US, someone (or some machine) at Bank of America to make sure the check goes to the right place, then, at the end of it, the money still gets wire transferred to First Investment Bank – all of that costs nothing. This convoluted thinking keeps me up at night.

Anyway, now I have a shiny new ATM card where I can withdraw funds from my new Bulgarian bank account. Whew!

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