A traveler’s check and the local American Express or Thomas Cook office used to be your only means of obtaining local currency abroad. Nowadays, however, traveler’s checks are the dinosaurs of European travel. ATM cards and credit-card cash advances are much cheaper and easier. The inconvenience of waiting in line at banks or exchange booths, digging your passport out of your money belt, and getting charged sometimes high commissions has led most frequent travelers to abandon traveler’s checks in favor of a trip to a street-corner ATM.

Using your ATM card

In Europe, your bank card was useless plastic about a decade ago. These days, however, you can saunter up to an ATM in virtually any city or small town and retrieve local cash, just as you would in the United States. Using the ATM is the fastest, easiest, and least expensive way to exchange money. When you use an ATM, you take advantage of the bank’s bulk exchange rate (better than any rate you would get changing, say, traveler’s checks at a bank), and the fees your home bank may charge you for using a nonproprietary ATM are usually less than a commission charge would be.

Both the Cirrus/Maestro (800-424-7787; www.mastercard.com) and PLUS (800-843-7587; www.visa.com) networks offer automated ATM locators that list the banks in each country that will accept your card. Look at the back of your bank card to see which network you’re on, and then call or check online for ATM locations at your destination. Or, as an alternative, you can search for any machine that carries your network’s symbol. In Europe, as in America, nearly every bank ATM is on both systems.

Be sure you know your personal identification number (PIN) before you leave home, and find out your daily withdrawal limit before you depart (usually around $200). Also, keep in mind that many home banks impose a fee every time your card is used at a different bank’s ATM, and that fee can be higher for international transactions (up to $5 or more) than for domestic ones (where they’re rarely more than $1.50). To compare banks’ ATM fees within the U.S., use www.bankrate.com. For international withdrawal fees, ask your bank.

Increased internationalism has essentially eliminated the worry that your card’s PIN needs special treatment to work abroad, but you should still check with the issuing bank before you leave. Most European systems use four-digit PINs; six-digit ones sometimes won’t work. If you get a strange message at the ATM that says your card isn’t valid for international transactions, most likely the bank simply isn’t able to make the phone connection to check your PIN (occasionally this epidemic occurs citywide). Don’t panic. Try another ATM, cash a traveler’s check, or try again the next day or in the next town that you visit.

Pulling out the plastic

Visa and MasterCard are now almost universally accepted — and in many places preferred — at most European hotels, restaurants, and shops. The majority of these places also take American Express, although its high commissions and unhurried reimbursement process is leading more and more small businesses to deny acceptance. The Diners Club card has always been more widely accepted in the cities and at more expensive establishments than in smaller towns and budget joints, but its partnership with MasterCard, announced in 2004, means that the card may soon be welcomed at establishments that take MasterCard. Except in the most exclusive restaurants and hotels, most Europeans have never heard of Carte Blanche. You rarely find a place that accepts Discover, and gas station and department-store credit cards are worthless overseas. Leave all those at home. Likewise, when visiting smaller, cheaper, family-run businesses, such as some inexpensive hotels and cheap restaurants, most rental rooms, and some neighborhood shops, you may find that all your plastic is useless, even Visa. Therefore, never rely solely on credit cards.

You can also use your credit card to get a cash advance through Visa or MasterCard, as long as you know your PIN. If you’ve forgotten yours, or didn’t even know you had one, call the number on the back of your credit card and ask the bank to send it to you. It usually takes five to seven business days. But these days, cash advances can prove to be an expensive option. Keep in mind that when you use your credit card abroad, most banks assess a 2 to 3 percent fee on top of the 1 percent fee charged by Visa, MasterCard, or American Express for currency conversion on credit charges. But credit cards still may be the smart way to go when you factor in things like ATM fees and higher traveler’s check exchange rates (and service fees).

Adding insult to injury, when you use your credit cards overseas, you pay the premium interest rate (usually around 19 percent) on cash advances, not the low introductory rate that many credit cards offer. Likewise, with most cards, you start to accrue interest immediately when you make a cash advance (rather than at the end of the month and only if you don’t pay up, as with purchases). If you use American Express, you can usually only obtain a cash advance from an American Express office. Some credit-card companies recommend that you notify them of any impending trip abroad so that they don’t become suspicious when the card is used numerous times in a foreign destination and block your charges. Even if you don’t call your credit-card company in advance, you can always call the card’s toll-free emergency number if a charge is refused — a good reason to carry the phone number with you. But perhaps the most important lesson here is to carry more than one card with you on your trip; a card may not work for any number of reasons, so having a backup is the smart way to go.

Cashing traveler’s checks

Take your traveler’s checks (along with your passport for i.d.) to any bank, American Express office, or exchange booth in Europe, and they’ll change the checks for the equivalent amount of local currency, minus exchange-rate fees. You sign traveler’s checks once at the bank or issuing office when you buy them and again in the presence of the person who accepts or cashes the check.

These days, traveler’s checks are less necessary because most cities have 24-hour ATMs that allow you to withdraw small amounts of cash as needed. However, unlike an ATM card, when you cash in your traveler’s checks, you only get the street exchange rate (about 4 percent below prime), and you have to wait in long bank lines, then wait again while the teller checks and photocopies your passport. If you’re comfortable doing so, using the ATM is the better, all-around choice. So why do so many people still use traveler’s checks? Insurance. Unlike regular currency, if you lose your traveler’s checks, you haven’t lost your money.

If you choose to carry traveler’s checks, keep a record of their serial numbers separate from your checks in case they’re stolen or lost. (You can’t get reimbursed if you can’t cite the numbers of the checks that you haven’t yet cashed.)You can get traveler’s checks at almost any bank. American Express offers denominations of $20, $50, $100, $500, and (for cardholders only) $1,000. You’ll pay a service charge ranging from 1 to 4 percent. You can also get American Express traveler’s checks over the phone by calling 800-221-7282; American Express gold and platinum cardholders who use this number are exempt from the 1 percent fee.

Visa offers traveler’s checks at Citibank locations nationwide, as well as at several other banks. The service charge ranges between 1.5 and 2 percent; checks come in denominations of $20, $50, $100, $500, and $1,000. Call 800-732-1322 for information. AAA members can obtain Visa checks without a fee at most AAA offices or by calling %866-339-3378. MasterCard also offers traveler’s checks. Call %800-223-9920 for a location near you.

Buy your traveler’s checks in U.S. dollar amounts (as opposed to, say, euros) because they’re more widely accepted abroad. You should also buy your traveler’s checks in different denominations. For example, you can cash $100 checks when you’re visiting a town for a while and $50 checks closer to the end of your visit to ensure that you don’t end up with currency that you’ll never use. Likewise, if you’re just passing through a country, $20 checks are good to use.

Most places in Europe (excluding the town barber or the elderly couple with the five-table bistro perhaps) accept traveler’s checks, especially American Express traveler’s checks. However, paying for a hotel room, purchase, or meal directly with a traveler’s check virtually ensures that you get the worst possible exchange rate. Exchange your traveler’s checks for local cash at a bank or the American Express office.