I will be in Rio for a couple of days before boarding a cruise around the horn of So. America. Question: Can I get by using US dollars for small purchases in Rio(incidentals, cab, drinks, etc.) and credit card for larger items? What about Buenos Aires, Santiago? Or, do I have to change money in each place? Thanks for your experience.

In Rio it is possible but they are going to take advantage of you by giving you a bad rate. Your best bet is to get a few dollars changed at an ATM or a cambio which are all over the city. You will save yourself alot of headaches if you have the local currency.

I was just in Rio and Buenos Aires. The exchange rate varys daily, but on average, I got 2.6 in Rio and 2.8 in Buenos Aires. Some tour operators will give you quotes in American currency, so if you plan on booking tours, having dollars will make it easier. Otherwise, they decide what exchange rate to charge you when they bill your credit card. They might say it's 2.75, but when you get your credit card statement, it's might be 2.5 or 2.6.

Thanks for the info. Were you able to use dollars for small purchases, lunch, drinks, cabs, etc.? I'm well aware of the going rate so don't think that I would be "taken advantage of" but just wanted to know if dollars are widely accepted or not? Hate to change money for a couple of days.

Dollars are not widely accepted and even where you use them you'll get change in local currency. You don't need to exchange money. Just go to an ATM machine and withdraw enough cash for your incidental expenses.

Wether you know the going rate or not is not the point, you will be at their mercy is the point. They will tell you what the rate is that they are willing to exchange for you and it will be inferior, you will not have a choice. And yes you will get change in Reais so you will end up with local currency anyway. Most small vendors are not going to want to be bothered with you and the only motivation is going to be that they can go and exchange the money themselves and make something on it. Actually JOHNK has the right idea.

ATM are all over, so get some everyday and that should do it. In the case of more established restaurants or stores, use your credit card, very simple and the bank set the rate. Visa and M/C are accepted all over.
If you have some extra, just spend it at the airport before departure, or leave it in your hotel room as a tip.
You are going to South America, not the jungle....banking system is very similar to the USA, living and carrying out of plastic cards has become so standard in South America.

I realize I'm not going into the "jungle." The point is, each time anyone uses an ATM there is a charge(1-2%) from the US bank for that convenience. So, if you over estimate the amount of local currency needed, there will be another charge to convert to the next country's(Argentina) currency. Now, there are at least two "hits" on your money, from the bank and the re-conversion fee. I thought it would be simpler and cheaper to use US dollars for couple of days, maybe not.

ghypse, I think then you have finally come to the right conclusion but you should have stated first that your motivation was to save only 1 or 2 % then this could have been easier. 1 or 2 % on $100 is only 1 or 2 dollars. The spread on what a vendor will give you will be much greater than 1 or 2 percent, for example if the exchange rate is 2.70 to the dollar at the time then it is quite possible that a vendor may give you 2.50 and that is good but Ill give you the benifit of the doubt, he may give you 2.40. Anyway, if you do this for $100 worth of spending then you loose 20 reais on $100 which is $8. So you will come out much furthur ahead using the ATM and paying the 1%.

Dondiega is right. Having lived in Rio, the merchants will take advantage of your generosity paying them in hard currency. Furthermore you make your presence as a fooreigner too obviose to the observant pickpockets who will be sure to get the remainder of your hard currency. Take the time, get some local currency and you can exchange it at the airport on your way out or in the US at your local AMEX travel office or Thomas Cook at the aiport.

OK, now that we have this settled Im going to give you a little tip. In recent years for the most part the ATM gave a better rate than changing dollars at a local cambio. Most regulars to Rio stopped bringing cash and used their ATM card because it was advantageous. Now more recently the opposite is true and most regulars are now bringing cash to Rio and not using their ATM card. I was in Rio just several weeks ago and I knew about this and brought all cash for my trip. At any local Cambio I was getting 2.6 real to the dollar while the official rate was about 2.55 and most ATM's were giving 2.5. And a particular club that I go to was giving an exchange rate of 2.7 for dollars, this is where I changed my money and loaded up.

It now sounds like exchanging dollars for reals is better than using an ATM? If so, in general is there any significant rate difference between the cambios and local banks? I know I should watch the commissions/exchange rate but do you think one is usually better than the other? Thanks.

I have been going to Rio for many years and i never exchanged money in a bank. Probably because when I first started going you could get over 30% better rate out on the street rather than official. Now the spread is much thinner, I would imagine that the Cambios give a better rate otherwise they couldn't compete and would be out of business. They are usually behind a travel agency or go to any jewelry store down the street from the Rio Othon Palace in Copacabana. Like I said before any Cambio was giving 2.6 and the official rate was 2.55 so no bank is going to give you more than official and plus they will shave some for themselves as they are in business to make money, sim?

As a carioca (born in Rio), you should have yr pocket money changed into reais at a exchange place, like tourist agency. Cabs, small cofees, to receive dollars will offer you a poor exchange rate. For bigger expenses, use credit card or again change yr money in a tourist agency.

Forgot! Samething for Buenos Aires and
Santiago.

Is it safe to change money on the street as Dondiega suggests? A 30% premium certainly sounds attractive. What are the potential problems, if any? Thanks.

Ghypse, that doesn't happen anymore that was in the 80's when they had rampant inflation. Forget it, just go to a cambio and change your money, thats it.

On my way to Rio tomorrow morning. Thanks to all for the advice. Happy Trails!!

Have a great trip.