Everyone wants to get the biggest bang for their buck but many people don't realize that you can save a lot of money in Europe by just knowing how and when to use ATM's, Credit Cards or Cash in Europe. Many travelers assume they will use their credit card for everything because they will get the best exchange rate. However, this is not necessarily true. In fact, you may be surprised to find that quite a few businesses (including restaurants) do not accept credit cards. Even the ones that do may tell their customers that the credit card machine is not working. It costs money every time they swipe a card so they prefer cash whenever possible. Another tip is that the businesses (including hotels) that do accept credit cards may offer you a discount for paying in cash so remember to always ask if they offer a cash discount. The following is some advice on when and where to use these different payment options:
ATM - Gone are the days where you need to carry Travelers Checks. There are ATM's located all over Europe so it's not a problem to get cash. However, do your research and find the best ATM card for you. Many American bank cards don't work overseas and those that do may charge a hefty fee which can be up to $5.00 per transaction plus another charge from the ATM for using the machine. When we traveled to Barcelona we got a Fidelity card because there are no fees and any charges from the European ATM's are automatically reimbursed. Not all ATM cards are created equal so do your homework and save money.
Credit Card - Credit cards are very convenient and are really nice to have so you don't have to carry a lot of cash with you. However, beware of the Chip and Pin! Unlike the U.S., where information is stored on a magnetic stripe. European cards rely on chip and pin technology, in which the data is stored on a computer chip, and users punch in a personal identification number at each transaction. One of the benefits of chip-and-PIN technology is that it has additional layers of security and is less susceptible to fraud. Therefore, your credit card may not work over in Europe. American card issuers are starting to take steps to transition over to this new technology but many cards are still using the magnetic strip. Therefore, check with your credit card company to confirm that your card will work in Europe.
Cash - This is my favorite form of payment. It's easy, fast and I get to look at all those Euro! Since discounts are often given when using cash I also feel you get the best value. I have never gone into a business where cash was not accepted. With ATM's so accessible it makes it easy to withdraw money at any time. The coins also make a great souvenir.
Remember to mix and match the various payment options as you never want to rely entirely on any one method. Enjoy your trip!