Credit Card or Cash in Italy?

For me, credit card or ATM works out the same. Our credit union passes on the 1% system fee and charges no more.

So I use cash for small purchases and sometimes for lodging if there's a concession for cash. Or if it's something like a B&B, which can't handle credit cards. Otherwise I charge the bigger bills.

I just got back from 16-days trip to Italy and used my ATM the whole time (even for hotels, etc). It really depends on your cards' transaction fees. For us, it was most economical to use ATMs.

I use a Capital One credit card. There's a fee on every ATM cash withdrawal, often a fixed fee such as $5. Thus if you take out $200 (equivalent), it's 2.5%. Most credit cards now charge a 3% fee on charges made in a foreign currency. I think AmEx charges only 1%, but it's less widely accepted.

But the Capital One card has no additional charge on foreign currency charges, and you get the same exchange rate as with other cards (I did an experiment). At least, this was true when I got the card a few years ago, and they haven't changed the terms on my card - perhaps they have a new policy on newly issued cards.

I just returned home yesterday from a two week trip to Italy. In the past I would use my credit card for every major expense and cash for small shops and minor purchases. But now most cards charge a "foreign currency conversion fee" of 3% and maybe a $5 service fee per transaction as well. So if you used your credit card for five Euro 50.00 you might have $25 in fees plus the 3% vs a single $5 fee plus 3% for a Euro 250.00 cash withdrawal.I withdrew Euro 250.00 every couple of days using my Schwab debit card which charged no transaction fee and which gave me a decent exchange rate of 1.39-1.40 dollars per Euro. I then paid cash for most meals, drinks, trains, cabs, etc and used my credit card or debit card for the large expenses such as 3-4 days hotel stays.

Hi J,

I use a CapitalOne credit card to charge everything chargeable.

I use an ATM card from my local bank to get the cash I need.
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Are you folks who say that you get cash from an ATM with a credit card actually talking about an ATM/debit card?

If you use a credit card at an ATM, that is a cash advance and starts collecting interest from the moment you use it.

I agree with h2babe: It all depends on the fees of your particular cards. Some cc's charge a lot in fees, but some banks charge for every ATM withdrawal.

For me it was about even - I use Capital One for both my credit card and ATM card, so there are no extra fees either way. I prefer to use my credit card as much as possible b/c it's more convenient, I need fewer trips to the ATM and I get points/rewards. For smaller daily expenses, I use cash.

For most people, I would bet that it works out pretty close to the same. But it's still a good idea to know what your particular bank is charging for when you use your cc or take out money from the ATM just in case there is a big fee.

Neither my credit card nor my ATM card incurs any currency conversion fees, so my decision on which to use depends on how much cash I want to carry around.

But to emphasize what Ira said, you should never use a credit card at an ATM. Only a debit card or ATM card should be used at an ATM to avoid the immediate accumulation of interest.

We pay for everything possible with credit cards to avoid having to carry large amounts of cash. (I won't do it at home either - but pay for anything of about $20 or more with credit or debit card.)

On my last trip to Italy I paid for ~1/2 of everything by cc and the other 1/2 by cash (from an ATM). The difference in cost between the two methods was less than I paid for a a trip's worth of gelato.

Of course, what you don't know is how much gelato I paid for, but the point is it really doesn't matter in the grand scheme of things.

Thanks all for your input. Here in the U.S., for convenience and points I use my credit card for just about everything. I would prefer to do that in Italy as well, as long as there isn't a huge premium over cash withdrawals. I'll plan to call my bank and CC company just before leaving, but sounds like we should be ok to use the CC for most purchases.

jimday: Beware when calling your banks. The person answering the phone may have no idea what the actual fees are and I know people who have been told "no fees" when that turned out to be completely false.

Check the fine print of your bank's documentation on the account you have. Most banks do charge a currency conversion fee for cc usage, and most banks also charge for non-network ATM withdrawals. Capital One is a notable exception (on both) but there are others.

CASH. It's the only surefire way, and many places don't even accept credit cards. ATMs are numerous, but I've seen plenty of travelers come here only to find their cards under mysterious 48 blocks, or getting rejected by ATMs or having limits too low for their travel plans. Plus there are the fees, and they add up. And besides, plenty of spots here are happy to get cash discounts. To exchange at the best rate possible, just do it at your own bank before leaving because sometimes your own bank will do it commission free. But definitely use cash!

Just returned from a two week stay in Italy.
Truthfully, quite a few places snub credit cards, most especially the mom and pop type pizza places, etc.
We were told our card had been refused even though that was not the case and it was their way of forcing us to pay with euro. Unfortunately,while we thought we had read everything and brought our CapitalOne card to use for charging and for ATM withdrawals, we didn't understand that the cash advance would incur interest immediately while a debit card would not. So, I guess I would suggest that you bring your CapitalOne card for those places who truly will accept credit and be sure to have at least one debit card for the many euro you will need for those who will not accept the credit cards. Also, just as an aside...our hotel in Rome pushed hard for me to pay in euro and promised a discount. Since I was paying for 3 rooms I would have had to have carried nearly 3000 euro just to pay for that leg of our stay! So, one is told to be careful not to carry too much cash and then the hotels try to lure you to pay large amounts in cash-crazy. Loved Italy, loved it...but, God bless the USA!

Visa or mastercard are well accepted, AMEX is a dream!
small villages frequently do not even think about accpting CC, but ATMs are everywhere