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Prague - ATMs and Cash

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In preparation for a trip to Prague this summer, I have been doing some research. A couple things that I read on Virtual Tourist struck me as odd with regard to cash, so I want to get some input.

One thing that struck me is that there are A LOT of posts about exchanging currency - where to go, where not to go, what scams to look out for, etc. Why would people carry a bunch of cash in their home currency to exchange in the first place? This is the 21st C and we are talking about Europe, not some far-flung place at the end of the earth. Our plan is to get money from ATMs for our daily expenses like we have done for other European trips. Is this a viable plan for Prague? ATMs plentiful and reliable? We always go to bank ATMs rather than freestanding ones, and of course look for ATMs where we can go inside the bank rather than stand on the street.

The other thing that struck me as odd was the recommendation to use ATMs, but to only pull out no more than the equivalient of $200 from the ATM at one time. I saw this recommendation from a couple different people, but no explanation as to the reason was given. Any reason that people can think of not to take out the max allowed in a transaction - other than the obvious issue that you will be carrying more cash and therefore if you get pickpocketed, the theives may get more money from you?

And while I am at it - what is the story with taxis in Prague? Lots of warnings on Virtual Tourist about them too, such as multiple warnings not to use the taxis waiting outside the main train station. Are these warnings overblown? From the same people who don't use ATMs and instead exchange cash with shady characters on the street? We will arrive by train and are staying near the main square in the old town - walkable with luggage, but we are thinking about taking a taxi for convinience.

Any insights are greatly appreciated.

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