Using cash in Italy

Cold, hard, euros

Euro bills
Euro bills.
Though credit cards have come into their own (and are, on the whole, cheaper to use than exchnaging dollars for cash euros), Italy is still primarily a cash economy—and the cash in question is the euro.

Money talks, and in Italy euros, speak the local lingo a lot better than do dollars, credit cards, or traveler's checks.

Italy uses the Euro

Italy, like most of Western Europe, now uses the Euro. Italians pronounce every vowel in that word, which is a bit hard on American tongues, but sounds something like "ay-YOU-rrr-oh" (and don't forget to roll that "r).

Countries that use the Euro: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, Spain.

Countries that do not use the euro: Denmark, Norway, Sweden, Switzerland, The U.K. (England, Scotland, Wales, Northern Ireland),
The currency symbol for the Euro is "€" as in €12.50, and can be placed randomly before or after the price (all Italian rules of grammar and spelling are notoriously flexible).

Euros come in various shapes and sizes:

  • Euro coins: €0.01, €0.02, €0.05 (all colored copper); €0.10, €0.20, €0.50 (all gold); and €1, €2 (both are two-tone; €1 has a silver center with a gold rim, €2 has a gold center with a silver rim). All are pictured below.
  • Euro bills: €5, €10, €20, €50, €100, €200, and €500. All are pictured above.

(For the record, Italy's old currency was called the lira, plural: lire and, yes, you could buy 1,500 of them with a single U.S. dollar—though that is misleading, since the buying power of 1,500L was about the same as $1, so the extra zeros were superfluous.)

Euro coins
Euro coins. This shows the front side of each. The back side design is left up to each country, so you can have fun collecting them all. Since the euro is a common currency, the change you are handed will likely consist of coins from Germany, France, and elsewhere. Some countries chose just do a single design for the backs of all their coins, but others—including Italy—do something different on each coin. You can read all about it in my blog entry from the day Europe went euro: "Requiem for a currency."
Just a few years ago, you could get a Euro for less than 90¢, but as of this writing (early 2010), the Euro has been on a four-year winning streak while at the same time the U.S. dollar has slumped (which is the polite way of saying "tanked").

It currently takes between $1.40 and $1.50 to buy €1. Ouch. Here's more on changing money.

Why use cash in Italy?

First of all, transactions in local currency are quicker, and they will certainly endear you to the merchant you're dealing with, since he knows he won’t have to kick a big chunk of his profits back to the folks at Visa or American Express.

Don't think that doesn't count for something. Though cash vs. credit prices at U.S. gas pumps may be a relic of the past, you can bet your last Euro-cent that you will often find a surprise discount if you pay in cash (like 5%) on such big ticket items as hotel rooms.

In fact, whenever you're discussing price on something, always ask, "Is that how much if I pay cash...?" You'll be surprised how often the number comes down a bit, especially for longer stays or larger purchases. (Note: don't try this for a single orange from the fruit vendor, or the three-pack of undies at a department store.)

Heck, sometimes even the waiter at dinner will come to your table at the end of the meal, tot up the bill in his head, and then ask "cash or Visa?" The correct answer to that is always "Cash" because it means you get a discount.

Why is this? Well, like I said, they don't have to factor into the final price that kickback to the credit card company. Plus—though you didn't hear it from me and of course I’d in no way encourage European merchants to break the law or imply that any do so—when you pay cash, they are free to enter any old amount they want on the ledger books.

Dealing with dollars
By the way, when I said that money talks and euros speak louder than dollars, that doesn't mean you shouldn't be bilingual. Yes, as a general rule, it is not a good idea to use U.S. dollars (or pounds, yen, or loonies, for that matter)—if only because you will get a truly crummy exchange rate, especially if you try to use them at shops or hotels (some of which, especially larger ones, will accept them).

However, it’s always wise to carry some emergency dollars—a couple of $20s and maybe a $100 or two and tuck them away in your moneybelt.

On my first trip to Poland I discovered that banks wouldn't change traveler's checks (this was back in 1994; much has changed), and Krakow's American Express office was way the heck on the outskirts of town and rarely open.

Luckily, my companion had $50 stashed away. We found an exchange booth in the train station that gladly gave us the worst exchange rate on the planet—along with a six-inch stack of colorful Polish zloty, enough to pay for our hotel room and tide us over until the American Express office opened the next day.
That way, when the Italian Zio Samuele comes looking for the government's cut at tax time, your hotelier's books can show that the inn took a loss on the room that night—and the owner gets to pocket the difference.

Though you didn't hear that from me.

Getting Your Hands on Some Euro

So how do you get your Euro on? If possible, always get cash from an ATM

—though you can also cash traveler's checks and get credit card cash advances, both end up costing more.

Some folks also buy some euros from their bank before leaving home. I used to try this tactic, but found that there's almost always an ATM or two at any airport or train station when I arrive and have found it to be unnecessary.

(Caveat: on my last trip to Ireland—in 2003—all of the bank machines at Shannon's arrivals terminal were out of order; since I was picking up a pre-paid car rental, I just drove along until I spotted a bank.)

The reason I stopped getting starter cash in local currencies is that (a) you get a truly crappy exchange rate, paying way to much on the dollar plus a sizeable bank fee just to get $30 worth of European currency, and (b) with the introduction of the Euro, I usually have some cash left over from last trip anyway. I realize that "(b)" only works for frequent travelers, but there you go.

If you do decide to carry along some primer cash, know that you can usually get it only from major, downtown banks, though your local branch might be able to order it from a larger branch (give them plenty of notice).

It doesn’t have to be your regular bank, either. Any old financial institution will sell you Euros, British Pounds, or Swiss Francs (Eastern European currencies are harder to come by), though some will waive certain fees only for their own customers.

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