If you are planning a trip to Europe this year, the Euro is your number 1 concern. Unless you have an endless travel budget, it will dictate every aspect of your trip. Unlike the 70's and 80's when the dollar was so strong that foreign currency was treated as play money, today the dollar is very weak against the Euro. Everything from a cup of coffee to your hotel room can cause a price shock. A cup of coffee can cost $4 and a room in a 2-star hotel can be $140. You can pay $200 for dinner for two if you forget your calculator. It's not difficult to spend 100 Euros a day. Understandng the Euro and its relationship to the dollar, exchange procedures, credit card usage, cash and debit cards and ATM usage is very important for any trip to a Euro currency country.
EURO: Unlike the dollar, the Euro has 7 coins. They are: 1 cent, 2 cent, 10 cents, 25 cents, 1 Euro and 2 Euros. There are 7 banknotes that are used daily--5 Euros, 10 Euros, 20 Euros, 100 Euros, 200 Euros and 500 Euros. They are very simple to use, much like the dollar. If you don't understand the language, simply look at the cash register window for the amount of the purchase. If you aren't a math wizard, a calculator or currency converter is necessary for the true dollar amount of a purchase.
CASH: The amount of cash you must have with you is based on where you are taveling. If you are hiking or biking through small villages or skiing, you must have cash because most businesses don't accept credit cards. Even in large cities, many small businesses don't accept credit cards. Like in America, you don't make small purchases with credit cards. Debit cards are very popular, but most American debit cards only work in ATMs, because they don't have a micro chip. Personally, I have at least 150 to 200 Euros with me at all times. You should also have a 250-400 Euro emergency fund in the hotel safe for any type of emergency.
EXCHANGING MONEY: Exchange most of your money in the country you are visiting. Before you leave, exchange at least $100 at your local bank for immediate expenses, such as taxi fare from the airport to your hotel or other needs. You should avoid exchanging money at airports, train stations, exchange centers and hotels--their rates are very high. Money exchanges should be minimized, because you are paying a fee for each transaction. Never make a transaction for less than $100 unless you are leaving the foreign country. Always know the current rate and the fees being charged because they change daily.
CREDIT CARDS: Before you leave the USA, notify your credit card supplier that you are leaving the country. Be prepared to provide the trip dates and the countries you are visiting. If this isn't done, they will cancel your card. Never use your credit card to get a cash advance unless it is an extreme emergency. You will pay an ATM fee, a cash advance fee and a currency exhange fee. Even though most suppliers charge a currency exchange fee (2 to 3 percent) each time you use your card for a purchase, it is the best method of payment. Remember that your card is from an American supplier which makes it difficult to stop a purchase made in Europe. The grace period for any credit card purchase is 60 days. Make sure you like your purchase, because the credit card company will charge a currency conversion fee again when you return it. It's not unusual for small businesses in Europe to charge a fee for accepting a credit card. Always have more than 1 credit card in case one is stolen or lost and have the telephone numbers of the suppliers. One card should have at least a $5000 credit balance for emergencies, such as a medical emergency. Hospitals require payment before you leave and will not accept your insurance.
ATM CASH AND DEBIT CARDS:The cheapest and easiest way to get cash is using your cash or debit card. While a debit card can be used for making purchases and getting cash, a cash card can only be used to get cash. Excessive ATM fees can be avoided by not exchangng small amounts of currency. Fees can be as much as $4 to $10 for each transaction. If you belong to a Global Alliance Bank, you will not be charged exchange fees, if you use another Global Alliance Bank. These banks are Bank of America, Barclays, BNP Paribas, Deutsche Bank, Scotiabank and Wespac. Contact your alliance bank for the specific location for each bank, for example, a Deutsche Bank outside of Germany will charge you fees. Avoid prepaid cash cards because their fees are very high. To find Visa /Plus cash machines and MasterCard/Cirrus cash machines use the websites in Travel Links.
TRAVELLERS' CHEQUES:The day of the travellers' cheque is almost over. They are the most difficult to exchange. Banks don't want to handle them, so they make it very difficult to cash them. The fees can be as much as 10 percent and the exchange rate will be the worst you can get. Merchants and restaurants don't accept them. Travellers' cheques are only useful as backup funds. If you don't need them, cash them when you get home.
EXCHANGE TIPS:
1. Credit cards used in Europe are VISA, MasterCard, American Express and Diners Card. Discovery Cards are not accepted.
2. Most ATMs outside of North America accept only 4-diget pins. Adjust your pin number before you leave the USA, if necessary.
3. Most debit and cash cards have a frequency usage limit and a cash advance daily limit. Check with your supplier for this information before you leave.
4. Your card numbers should be left with someone back home--it's easier for someone to stop payments on three cards in the USA than in a foreign country.
5. Since you can't exchange coins back to dollars, always spend down coins.
6. For emergency funds, always take at least $200 with you.
7. If you are using online banking, you can go to one of the many computer rental stores or cafes and transfer money from one account to another.
8, Before you leave the USA, have someone ready to wire you money, if needed. This can be done via Western Union or American Express.