what is the best way to pay for items while in Europe?

Melissa

Cash is best for you (no debt to pay).

A combination of all three is good
- cash for small purchases, dinner, etc
- debit card* to obtain the cash from ATMs (and can also be used for purchases)
- credit card for 'back up' and perhaps to pay for hotel, large purchases, etc.
*debit card is better if you have a special checking account just for travel; if anything happens to the card you don't want to mess up your main checking account

I guess it depends upon what type of debit/credit cards you have and the fees associated. If your VISA/Mastercard only charge the 1% conversion fee, use your credit card. If your debit card charges no conversion fee, like mine, then use your debit card and pay cash. The money comes right out of your checking account.

Cash? Get cash from the ATM machine for misc expenses.

I always pay hotel/rental car/restaurant/shopping with my credit card and pay off the balance when I get the bill.

Hi M,

Most people on this board recommend:

Credit card when possible,
ATM card for cash as needed,
TC's in dollars as emergency back up.

Ira,
I used to think that way until the CC started with surcharges.

In Italy, I hit the ATM daily and paid for everything in Euros.

I get a good exchange rate at a total cost of $1.50 day from my bank.

As an added bonus, many places wil give you a discount for payment in Euros

Dick makes some excellent points. If you use your Debit/ATM card, the funds are immediately taken out of your checking account. If you use your credit card for purchases, you don't have to pay it back, sometimes up to 45 days, depending on when your statement cycles.

Then, you must consider the transaction fees/ATM fees for your particular card, do the math, and figure out what best suites your personal circumstances.

Also, just remember, if you use your credit card to get a cash advance in an ATM machine, you begin accumulating interest the date of the transaction.

But then again, a cash advance may not be that bad if you have a low interest rate card and plan to pay off the balance once you return from your trip. A 12% annual rate will only cost you 1% if you pay it off within a month.

If you live on the East Coast, open up a checking account with Commerce Bank. They charge no overseas ATM fees, and no currency conversion fees. It's a great deal.

We found that using cash for daily expenses - food, ice cream, tickets to museums, transportation passes, small souvenier purchases, and so on was the most convinient. We just went to the ATM every 2-3 days to get some more money. Then for larger stuff - hotel bills, car rentals, larger souvenier purchases - we used the credit card.

We didn't take any traveler's checks - too much hassle. We did each take an extra credit card as a back up though and we each had ATM cards from different checking accounts.

Two items I might add:
1. If you want to rent a car, a credit card is virtually a must, it not a total must.

2. Some banks, such as Bank of America, have working agreements with banks in Europe. For example, in Canada I used Scotia Bank for cash withdrawals and in the UK I used Barclay's Bank.

ATM transactions at those two banks were treated as "on net."

As for which is best, for me it depends on which one will be accepted with the least hassle. When I rent an apartment in Switzerland, the owner wants cash.
Cheaper for her; easy for me.

Having more than one account as TNut suggests works for me.

I would rather get cash from the ATM and pay cash for everything, but since the hotels ask for your credit card info at the time of booking, I pay with that card. I started doing so about 6 years ago when I booked a hotel with a credit card in Maui but paid cash at check out. Then I received my bill and I was charged again for the room. I did get credit eventually, but it was a real pain in the neck and it took about 3 months.

I might add that having two different credit cards is a good idea if that is how you intend to pay for items purchased.

Also, I carry a few traveler's checks as a doomsday, end of the world, backup. The checks I have now are frequent fliers!

The provided psychological warmth on 9/12 when no one knew what would happen next, and they once served to calm an overheated waiter in a small Paris cafe.

I will never know what went askew, but after I handed the waiter my main card to pay the check, he soon came back to the table gesticulating wildly and making noises like a tea kettle about to bubble over.

He spoke about as much English as I do French, but I got the point. The card did not do the job. (I never knew why.)
My wife rose from her chair saying, "I will go to the bank for money." [It was very close by.] The waiter must have thought she was skipping out, and he really started to boil over.

I had a few traveler's checks in my wallet and I lay them on the table.
Upon seeing the checks, the tea kettle calmed down while I located my other card. It worked and the hot bubbling turned to smiles.

The card that failed in this instance worked fine thereafter, so I never knew what was wrong.

I am thankful I had backup!!

As one who prefers to be prepared for all contingencies, my husband and I bring ATM only (more secure than debit cards) cards for our separate accounts, along with a couple of credit cards without those pesky "currency conversion" fees (Capital One).

Previously huge fans of travelers checks, and bringing checks we could cash at an AmExp office with our card, now we just tuck a few hundreds securely, as these days it's much easier to convert cash than cash/use travelers checks, should there be some sort of emergency (which has not, so far, occurred).

Coming home, we used to use all our excess foreign currency toward the hotel bill, so as to have none leftover to covert back...but now we make sure we have a sufficient stash for our next arrival.