As the editor and publisher of a subscription travel newsletter on Italy, you can imagine that anyone and everyone asks me about travel to Italy. In the 10 years, I have been running Dream of Italy, I have certainly noticed that certain questions come up far more often than others and one of the more popular questions is. One of them is:
What is the best way to get money when I’m traveling in Italy and should I use credit cards?
So…based on my numerous trips to Italy, here’s my advice for getting euros and spending money in Italy. Note that I’m not covering all the options, just the ones I use most often. If you have tips you would like to share, please leave them in the comments below.
Getting Cash Before Arriving in Italy
My first trip to Europe was when I was 10 years old and my parents decided to take advantage of a “new” low-cost airline, People Express, and go to London. I remember my dad being sure that we had some British pounds to take with us, just in case there was a problem as soon as we arrived, or for some reason we weren’t able to change money when we first got there. His actions have stuck with me and I always try to have at least 100 euros on me when I arrive in Italy, just in case.
You can get euros at some major banks and online. In the U.S., major branches of Bank of America, Wachovia, Wells Fargo and Chase, among others, offer currency exchange services. Be sure to call around in advance to check. At many banks, people who aren’t account holders at that bank can use the currency exchange service for a small fee. Wells Fargo and Travelex allow you to purchase currency online and have it delivered to your house.
I’ll get to ATMs in a moment, but on my trip to Pisa last year, I was reminded why it s a good idea to have some euros on hand. I had my business ATM card, which has never given me a problem in Italy, but when I went to the ATM machine in Pisa’s airport, it wouldn’t work. It likely wasn’t on the right system for that machine and as far as I recall there was only one ATM in that airport, so luckily, I had my euros until I got to a machine in the city.
I’m not going to say much about traveler’s checks as I don’t use them anymore when traveling and don’t know anyone who does. (But if you do and feel strongly about this method, please leave your comments below. Would love to hear them!) But they can be a good back-up plan — i.e., keep them in your luggage and use them in case your ATM or credit cards are stolen. The hassle is that you need to pay a fee for the checks at home and then find an Italian bank (which keep limited hours) to cash them. You will pay an additional fee to the bank when you exchange the checks for euros.
Visa and American Express sell travelers checks and often do so through local bank branches. I haven’t done much research into the pros and cons of this (maybe expect a follow-up article?) but Visa and American Express also offer travelers checks in euros (I suppose one benefit is locking in the current exchange rate). When I needed to pay large amounts of cash for our excursions during Dream of Italy’s Umbria Harvest Week, I considered euro checks but ultimately went the ATM route. I would have had to cash them at a bank anyway as I am told by MANY Italians that businesses won’t even accept euro checks.
My amazing researcher, Elaine Murphy, who helped me with this article, turned me on to prepaid euro cards, which she used this summer in Europe. These cards, which work like debit cards, are rising in popularity, as many of them offer good exchange rates, no transaction fees, and the opportunity to top up your balance by phone or online. These cards aren’t tied to your bank account, so in the case of theft, the thief won’t have access to the rest of your money – and, like traveler’s cheques, the card issuer will protect the money on your card if it is lost or stolen.
These cards are also fitted with a microchip, which American cards don’t have – many train stations, kiosks, bike rental stations and small businesses require cards to have a chip when purchasing items like train or metro tickets. The Visa TravelMoney Card, the Travelex Cash Passport and the American Express Global Charge Card are popular options (though American Express is less widely accepted than Visa). It’s a good idea to check any fees that these cards might have and compare them to the fees on your ATM/debit and credit cards. These seem like a great option for parents to give to their kids who are studying abroad.
Cash from Bancomats
For years, my only method for getting cash in Italy is to use my bank debit card in an ATM or bancomat as it is called in Italy. Bancomats are everywhere in Italy. If you haven’t used your debit card in Italy before though, please don’t automatically assume that it will work. Here are the things to know:
- Your card MUST be tied to a checking account, NOT a savings account. Trust me on this as I had a friend who only brought a debit card tied to her savings account. It wouldn’t work. We spotted her money all week.
- You’ll also need to have a 4-digit PIN number (it cannot begin with “0”). It’s a good idea to choose a PIN number for your credit card as well — we’ll get to that in a moment.
- You want to be sure that your home bank’s network is one that has compatible machines in Italy, i.e., Cirrus and Plus networks are those with the most machines in Italy.
- You’ll most likely get hit with small ATM transaction fees (usually 1%) and currency exchange fees (usually 3%), but check with your card issuer and bank to be sure. Withdrawing euros from an ATM will generally yield a better exchange rate than an exchange bureau, and the transaction fees are usually insignificant.
- Most Italian bancomats have a daily withdrawl limit of 250 euros so plan accordingly! (When I needed a lot of cash one day during our Harvest Week, an Italian told me to go to the bank machine at the post office — Postamat — this particular one allowed me to take out 400 euros. Bingo!)
Cash Is King
Before we move on to credit cards, I need to make sure you understand one thing: Cash is King in Italy! This is still very much a cash economy and that’s do to a number of reasons. First of all, Italians hate to pay credit card transaction fees. Second, whether it is right or wrong, many Italians want to hide the full extent of their income from tax authorities. So you will notice that drivers, tour guides, even those who rent apartments and villas will ask for their entire fees in cash. So you will need to plan ahead to deal with the 250-euro per day limit for ATMs. If you’re renting a villa, don’t be surprised if you are asked to send a wire transfer from your bank account to pay for it. (This is a way to avoid those dreaded credit card fees.)
Italians hate credit card transaction fees SO MUCH that it can work to your advantage while shopping. If you are going to buy several items in a store or make a big purchase, ask for a sconto (discount) for paying cash. This works most often with small businesses (not big department stores, obviously) but you will be surprised how often it works. And always, always try the “sconto” technique in outdoor markets if you are buying more than one item from a vendor.
While you always want to have cash on hand, credit cards are accepted much more widely than they used to be. Keep in mind that Visa and MasterCard are widely accepted but American Express is still not accepted everywhere. So don’t travel only with an Amex card. Now, you will be paying fees to use your credit card abroad (there’s an exception, which I will get to). According to this excellent Bankrate.com article, “Visa and MasterCard have a standard 1 percent charge on foreign purchases and the issuing bank adds another fee…The credit card issuer or bank often charges an additional fee, usually 2 percent, which adds up to a 3 percent total charge on foreign purchases.”
The BEST credit card for travel abroad is Capital One. They are the only company, to my knowledge, that doesn’t charge a conversion fee and this holds for purchases as well as cash advances. Capital One also has an excellent rewards program with no blackout dates with rewards travel, points that don’t expire, etc.
Be sure to set up a 4-digit pin on each credit card you bring with you to Italy. Why? Very rarely, you might be asked by a store for the pin before a purchase can be made. But most importantly, you will then have the option of getting a cash advance from a bancomat should you need that option. You never know.