Communicating in Europe: Our cell phone solution

Bayeux

Bayeux, France

If your cell phone works overseas (and not all do), your wireless carrier is happy to sell you an international plan that typically includes a small amount of minutes, texts and data at what feels like a pretty inflated cost. (The cheapest option from AT&T: 120 megabytes of data for $30 a month, $10 for 50 messages, $30 for 80 minutes, for a total of $70 per month per phone for a fraction of what we’re used to at home.)

Apparently, if you don’t use your phone much, you might be fine with that. Given the way I use my phone—to scan email, translate signs and menus, find my way around, coordinate plans with friends and family, book restaurant reservations and check opening hours for museums —I couldn’t imagine paying so much for so little.

The good news is that you can get a lot more for a lot less, as long as you can get your hands on an unlocked phone. Fortunately for us, my iPhone was no longer under contract and we had an old iPhone 3 that my daughter could use, so AT&T sent instructions on how to unlock each one. A friend lent us a Samsung he’d purchased for overseas travel.

I unlocked our phones the day we left for Europe (I was still able to use it in the States that day, as per usual). Once we landed in London, we found our way to a little mobile phone shop just across the street from Harrods and picked up a SIM card for five pounds (about $8.50), which included a five-pound credit for talk time. The gentleman behind the counter inserted the new cards, showed us our new phone numbers and told us where we could buy a package of minutes, texts and data (just around the corner at a news stand, as it tuned out).

Our British numbers worked even after we arrived in France, but I wanted more data than the small plan we bought. Two blocks away from our apartment was an Orange store where another nice gentleman sold us SIM cards (for five euros, including a five-euro credit) plus calling/text/data plans. For 30 euros each, Daughter and I got plenty of minutes, texts and a full gigabyte of data for the month we’re spending in Paris. Hubby, who is not as entranced with the online world, got a less generous plan for 20 euros.

You can, by the way, buy SIM cards at airports, train stations and lots of other locations from kiosks or news stands. I highly recommend finding a mobile phone shop that has someone to help you set up your service, though, especially if you’ve never done it before.

My plan paid for itself just on our recent road trip to the D-Day beaches. I used Google Maps navigation as a GPS to get us from the edge of Paris to every location on our agenda and back again, complete with turn-by-turn voice instructions. That saved us the $12 daily rental fee for our four-day trip.

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10 steps to take if you hope to retire soon
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Deciphering the formula.

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Our apartment in Paris

Eiffel TowerWe’ve settled into our home for the next few weeks: a comfortably funky 3-bedroom apartment on the top of an older building not far from the Moulin Rouge.

Travelers will tell you that if you’re planning to stay more than a few days here (and indeed in many major cities), it makes a lot more financial sense to rent a place than to stay in a hotel. Not only is it cheaper*, but access to a kitchen and (often) a washer and dryer will further reduce your costs. And this time, I knew enough to get a place with an elevator.

Another way to travel cheaper: public transport. We’re less than a block from a Metro station and the bus stop is literally across the street. Several grocers and a good boulangerie (bakery) are nearby, as well as a number of restaurants when we don’t feel like cooking.

We used the Homelidays site, now known as HomeAway, to find this place, and AirBnB to book a flat in Edinburgh.  I relied heavily on other users’ reviews, seeking out the listings that have a bunch of them. (I’ll let other people take a chance on the newbies.)

The one thing we gave up was flexibility. Most of the listings we considered had pretty strict cancellation policies, with substantial deposits (usually half the rent) and steep forfeitures if you change your mind. Fortunately, our plans were pretty well set.

*We’re paying about $140 a night for three bedrooms and two baths. Before we arrived, we spent one night at the Westin Paris Vendome using points. The room we occupied typically costs over 500 euros per night, or nearly $700. There are much cheaper hotels, obviously, but you typically pay a couple hundred bucks for a small room, so renting an apartment can really make sense.

 

 

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How much will bankruptcy hurt your credit scores?

DrowningA reader whose credit scores have already been badly damaged by late payments and charge-offs had a question: How much more would her scores drop if she filed for bankruptcy?

For years the creators of the leading FICO credit scoring formula were a bit vague about the answer, saying only that a bankruptcy filing is “the single worst thing” that can happen to your scores.

Three years ago, though, the FICO folks provided a peek into how the formula treats a bankruptcy filing as well as other major negatives. You’ll find the post that covers that topic on FICO’s Banking Analytics blog. I go into more detail about this in my book “Your Credit Score,” but you’ll see that, indeed, the impact of a bankruptcy is bigger than that of other negatives. As with other black marks, a bankruptcy hurts already battered scores proportionately less than it does those with higher scores. But in the three examples given (people who started with scores of 680, 720 and 780), everyone ended up in the low to middle 500s. Not a great place to be. Futhermore, it takes years for credit scores to recover. To get back to “good” credit of 720 and above will take 7 to 10 years.

So does that alone mean people should avoid bankruptcy? Heavens, no. Bankruptcy puts a legal end to collection efforts and the ongoing damage unpaid debts can do to your scores. If you can get your act together and start using credit responsibly after a bankruptcy filing, you can start to rebuild your scores immediately. If you continue to struggle with un-payable debt, you may never be able to rehabilitate your credit.

Obviously, if you can pay your debts, you should. Many people who can’t wind up doing themselves more damage, and throwing good money after bad, in vain struggles to pay their bills. If you’re falling behind and can’t see how you’ll catch up, you’d be smart to at least talk to a bankruptcy attorney about your options.