Money 101

Money is the last thing you want to worry about on a romantic getaway, so it's important to do four things before you leave: set a budget; know your limits (checking account balance, limits on your credit cards); carefully consider the mix of cash, travelers checks, and credit cards you should take; and assemble emergency contact numbers should your wallet go missing. Arming yourselves in advance will allow you to forget about money and shop outdoor markets and chi-chi shops with equal ease.

Where you go determines what you should take. If you're visiting a destination where ATMs are not readily available, pack more cash and travelers checks. If ATMs are plentiful -- often the case in popular tourist spots -- take less cash to limit your liability if something happens, and withdraw money on an as-needed basis. The conversion surcharge (a percentage of your purchase or amount exchanged) will vary from one or two percent (generally on credit cards) to between five and ten percent (cash and travelers checks). There may also be flat fees for each purchase or conversion. A high fee may wipe out the advantages of a low exchange rate (percentage), especially for smaller amounts.

The advantage of using your bank debit or credit card to withdraw money overseas is that ATMs generally offer the best exchange rate available (close to the wholesale rate). How to find one? First, look at the back of your bank debit card or credit card for its network affiliations. For listings of cash machines around the world, click on the ATM Locator at (for Cirrus, Pulse, MasterCard, or Maestro network cards) or (for Visa, Plus, or Visa Electron cards).

Call your bank before heading out to ask about the service charge per withdrawal at your destination (it will likely be higher than at home), withdrawal limits per transaction or day, and whether you can use your PIN number without a problem. .

Be sure to take at least one credit or charge card. Two different ones -- American Express and a Visa or MasterCard, for example -- obviously double your options. A credit card not only offers an excellent exchange rate, it is essential for your shopping peace of mind. Unlike paying in cash, credit cards have a maximum cash liability (expenses you're responsible for if your card is used without your permission) and may also offer some measure of protection should the item you purchased with the card be lost, damaged, or stolen -- check with the issuer regarding their protection programs.

Credit cards may also have the added advantage of accruing rewards when used, and often offer handy services such as travel insurance or worldwide medical and legal referrals (call now -- you may have to register before you go). Of course, everything comes with a price: Conversion surcharges can range from one to two percent, and your card's issuing bank may tack on a few more points.

Cash is the one form of payment you know every merchant will gladly accept. Perhaps the biggest drawback to converting money into the local denomination is the service fee, which can run as high as ten percent! The fee is either posted or absorbed into a less-than-stellar exchange rate (never believe a service that advertises "No fee!").

That said, you do need some cash in pocket for small purchases, on-the-go snacks, and getting around. Be careful: Foreign currency often feels like Monopoly money instead of your valuable hard-earned cash. Get a reality check and stay within your budget with these tips: