Peru's national currency is the nuevo sol (S/). Bills are issued in denominations of 10, 20, 50, 100, and 200 soles. Coins are 1, 5, 10, 20, and 50 cntimos, and 1, 2, and 5 soles. (The 1- and 5-cntimo coins are rarely seen.) At this writing, the exchange rate was S/2.6 to the U.S. dollar. Peru is not one of those "everybody takes dollars" places—many businesses and most individuals are not equipped to handle U.S. currency—so you should try to deal in soles.
You'll want to break larger bills as soon as possible. Souvenir stands, craft markets, taxi drivers, and other businesses often do not have change. Be aware that U.S. dollars must be in pristine condition, as moneychangers and banks will not accept a bill with even the slightest tear. Likewise, counterfeiting is a big problem in Peru, and you should check all bills (both dollars and soles) immediately to confirm that they are real. The easiest method is to ensure that the color changing ink does indeed change colors, from purple to black. Do not feel uncomfortable scrutinizing bills; you can be sure that any cashier will scrutinize your bills twice as hard.
If you're planning to exchange funds before leaving home, don't wait until the last minute. Banks never have every foreign currency on hand, and it may take as long as a week to order. For the best exchange rates, you're better off to wait until you get to Peru to change dollars into local currency.
Your own bank will probably charge a fee for using ATMs abroad; the foreign bank you use may also charge a fee, which currently stands at $5 per transaction. Nevertheless, you'll usually get a better rate of exchange at an ATM than you will at a currency-exchange office or even when changing money in a bank. And extracting funds as you need them is a safer option than carrying around a large amount of cash.
PIN numbers with more than four digits are not recognized at ATMs in many countries. If yours has five or more, remember to change it before you leave.
ATMs (cajeros automticos) are widely available, especially in Lima, and you can get cash with a Cirrus- or Plus-linked debit card or with a major credit card. Most ATMs accept both Cirrus and Plus cards, but to be on the safe side, bring at least one of each.
MasterCard Cirrus (800/627–8372 in North America; 0800/55087 in Peru. www.mastercard.com.)
Visa Plus (www.visa.com/atm.)
It's a good idea to inform your credit-card company before you travel. Otherwise, the credit-card company might put a hold on your card owing to unusual activity—not a good thing halfway through your trip. Record all your credit-card numbers—as well as the phone numbers to call if your cards are lost or stolen—in a safe place, so you're prepared should something go wrong. Both MasterCard and Visa have general numbers you can call (collect if you're abroad) if your card is lost, but you're better off calling the number of your issuing bank, since MasterCard and Visa usually just transfer you to your bank; your bank's number is usually printed on your card.
Although it's usually cheaper (and safer) to use a credit card abroad for large purchases (so you can cancel payments or be reimbursed if there's a problem), note that some credit-card companies and the banks that issue them add substantial percentages to all foreign transactions, whether they're in a foreign currency or not. Check on these fees before leaving home, so there won't be any surprises when you get the bill.
Before you charge something, ask the merchant whether he or she plans to do a dynamic currency conversion (DCC). In such a transaction the credit-card processor (shop, restaurant, or hotel, not Visa or MasterCard) converts the currency and charges you in dollars. In most cases you'll pay the merchant a 3% fee for this service in addition to any credit-card company and issuing-bank foreign-transaction surcharges.
Dynamic currency conversion programs are becoming increasingly widespread. Merchants who participate in them are supposed to ask whether you want to be charged in dollars or the local currency, but they don't always do so. And even if they do offer you a choice, they may well avoid mentioning the additional surcharges. The good news is that you do have a choice. And if this practice really gets your goat, you can avoid it entirely thanks to American Express; with its cards, DCC simply isn't an option.
For costly items, try to use your credit card whenever possible—you'll come out ahead, whether the exchange rate at which your purchase is calculated is the one in effect the day the vendor's bank abroad processes the charge or the one prevailing on the day the charge company's service center processes it at home.
Major credit cards, especially MasterCard and Visa, are accepted in most hotels, restaurants, and shops in tourist areas. If you're traveling outside major cities, always check to see whether your hotel accepts credit cards. You may have to bring enough cash to pay the bill.
Before leaving home, make copies of the back and front of your credit cards; keep one set of copies with your luggage, the other at home.
American Express (800/528–4800 in North America; 336/393-1111 outside North America. www.americanexpress.com.)
MasterCard (800/627–8372 in North America; 636/722–7111 collect from abroad. www.mastercard.com.)
Visa (800/847–2911 in North America; 800/890-0623 in Peru. www.visa.com.)
You can safely exchange money or cash traveler's checks in a bank, at your hotel, or at casas de cambio (exchange houses). The rate for traveler's checks is usually the same as for cash, but many banks have a ceiling on how much they will exchange at one time.
Even if a currency-exchange booth has a sign promising no commission, rest assured that there's some kind of huge, hidden fee. (Oh that's right. The sign didn't say no fee). Rates are always better at an ATM or a bank.