Preparing your Finances

The EURO

In January of 2002, twelve countries of the European Union (Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal, Finland) converted their currency to the Euro. The Euro fluctuates greatly depending on the international market. In the past few years €1 has been as high as $1.30 and as low as $1.00 but tends to be around $1.15.

Exchange Rates

You can track daily exchange rates on websites such as www.xe.com. While they will not show added bank fees (usually around 2-5%), they will give you a good indication for what you will be spending.

The Wall Street Journal has a great article about how to get the best exchange rates when you travel.

Cash

Although it is more advantageous to convert money in Europe than it is at home, it is important to have enough Euros for the first 24 to 48 hours of your trip. You should plan on having approximately €100 to be able to pay for cab rides from the airport to school and possibly school to your apartment, as well as cash for any other issues that could arise when traveling.

We do not recommend bringing your home currency to change while in Florence, however, if you do, it is always best to go to a post office. Although there are change offices all over Florence, they charge a commission and their exchange rate is usually quite high. This rule also applies to hotels, airports, and train stations, where rates are usually higher than the exchange at a post office.

Traveler’s checks

Traveler’s checks are an easy and safe way to carry money while traveling but are becoming more and more obsolete and you are not likely to find a place in Florence that will change them for you.

Credit cards

Credit cards are generally accepted all over Italy although some restaurants, stores, and budget hotels will only accept cash. Credit cards will sometimes be required when reserving hotel rooms or budget flights. Credit cards can also provide cash advances through ATM machines. Although the transaction fee is hefty (around $10 for the advance and 2-3% extra for foreign transactions), having the option available can prove to be a great relief in event of an emergency. In order to make cash advances with your credit card number, contact your credit card company to obtain a Personal Identification Number (PIN).

ATM and Debit Cards

ATM machines (Bancomat in Italian) are quite common in Italy and are easy to find and use. Before leaving home check with your bank to make sure you have an international pin code and that your card is compatible with Europe’s systems. Although cash machines may seem to be the easiest answer for cash you should keep a few things in mind:

  • Most bank machines have a cash limit ($300 sometimes less) and all transactions will be accompanied with a surcharge of $1-5 depending on your bank.
  • You will not be able to see your bank statement on the receipt so be sure to keep track of your withdrawals.
  • Although bancomats are readily available in Italy, they are also frequently unreliable if the phone lines or computer links aren’t working.

Debit Cards

Debit Cards allow your cash card to also be used as a credit card. Instead of paying a monthly bill, debit cards take the money directly and immediately from your bank account. Although convenient, these cards can be extremely risky. If your card is stolen and used to charge, the money is NOT recoverable (up to a maximum stated by your bank) whereas a credit card company is insured and will not charge you for purchases made with your stolen card. If you have a debit card and find it indispensable, be aware of the risks and exercise caution.

Note: For either Credit or Debit Cards, make sure to call into your bank before your departure to inform them you will be using your card outside of the country for the period of your travels. If you do not, you risk having a block placed on your account.

The most important thing to remember is NEVER LIMIT ACCESSING YOUR MONEY TO ONE OPTION. It is absolutely essential to have a backup source of money readily available. If you rely on a bankcard alone and it is stolen, you will have no means retrieve money.