Money

Currency

Canadian currency, like U.S. currency, is denominated in dollars and cents, though there are some differences. Canada has no $1 bill. It does have a $1 coin (called a "loonie" because it depicts a loon) and a $2 coin (called a "twoonie"). At press time, US$1 was worth approximately C$1.25.

If you're driving into Canada, you needn't worry about stocking up on Canadian dollars before or immediately upon entry into Canada. U.S. currency is widely accepted, especially in border towns, and you'll often see signs at cash registers announcing current exchange rates. These are not always the best rates, however, so it behooves you to visit an ATM (automated teller machine; see below) or cash some traveler's checks as soon as you're able.

You'll avoid lines at airport ATMs by exchanging at least some money -- just enough to cover airport incidentals and transportation to your hotel -- before you leave home (though don't expect the exchange rate to be ideal). You can exchange money at your local American Express or Thomas Cook office or at your bank. American Express also dispenses traveler's checks and foreign currency via www.americanexpress.com or tel. 800/807-6233, but they'll charge a $15 order fee and additional shipping costs.

ATMs

Obtaining cash is rarely a problem for travelers in Canada. The easiest and best way to get cash away from home is from an ATM, which is widely available in most midsize towns and cities, and the networks are often compatible with U.S. banks, allowing travelers to use their own ATM or credit cards for cash withdrawals. Your bank will convert the currency at the prevailing rate. For example, if you withdraw $100 from a Canadian bank machine, your bank statement will show a withdrawal of around US$80.

Cirrus (tel. 800/424-7787; www.mastercard.com) and PLUS (tel. 800/843-7587; www.visa.com) are the two most popular networks, with PLUS especially well represented in Atlantic Canada. Check the back of your ATM card to see which network your bank belongs to, then call or check online for ATM locations at your destination. Be sure you know your personal identification number (PIN) and daily withdrawal limit before you depart.

You can use your credit card to receive cash advances at ATMs, too. Keep in mind that credit card companies protect themselves from theft by limiting maximum withdrawals outside their home country, so call your credit card company before you leave home. And keep in mind that you'll pay interest from the moment of your withdrawal, even if you pay your monthly bills on time.

Note: Many banks impose a fee every time you use a card at another 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 $2). In addition, the bank from which you withdraw cash may charge its own fee, though in practice many ATMs in Canada still do not charge a transaction fee. To compare banks' ATM fees within the U.S., use www.bankrate.com. For international withdrawal fees, ask your bank.

Traveler's Checks

Traveler's checks are something of an anachronism from the days before the ATM made cash accessible at any time. Given the fees you'll pay for ATM use at banks other than your own, however, you might be better off with traveler's checks if you're withdrawing money often.

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%. You can also get American Express traveler's checks over the phone by calling tel. 800/221-7282; Amex gold and platinum cardholders who use this number are exempt from the 1% 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%; checks come in denominations of $20, $50, $100, $500, and $1,000. Call tel. 800/732-1322 for information. AAA members can obtain Visa checks for a $9.95 fee (for checks up to $1,500) at most AAA offices or by calling tel. 866/339-3378. MasterCard also offers traveler's checks. Call tel. 800/223-9920 for a location near you.

Foreign currency traveler's checks are useful if you're traveling to one country; they're accepted at locations where dollar checks may not be, such as bed and breakfasts, and they minimize the currency conversions you'll have to perform while you're on the go. American Express, Thomas Cook, Visa, and MasterCard offer foreign currency traveler's checks. You'll pay the rate of exchange at the time of your purchase (so it's a good idea to monitor the rate before you buy), and most companies charge a transaction fee per order (and a shipping fee if you order online).

If you do choose to carry traveler's checks, keep a record of their serial numbers separate from your checks in the event that they are stolen or lost. You'll get a refund faster if you know the numbers.

Credit Cards

Credit cards are another safe way to carry money. They also provide a convenient record of all your expenses, and they generally offer relatively good exchange rates. You can also withdraw cash advances from your credit cards at banks or ATMs, provided you know your PIN. If you don't know yours, call the number on the back of your credit card and ask the bank to send it to you. It usually takes 5 to 7 business days, though some banks will provide the number over the phone if you tell them your mother's maiden name or some other personal information. Keep in mind that many banks now assess a 1-3% "transaction fee" on all charges you incur abroad (whether you're using the local currency or US dollars). But credit cards still may be the smart way to go when you factor in things like exorbitant ATM fees and the higher exchange rates and service fees you'll pay with traveler's checks.

Dear Visa: I'm off to Meat Cove! -- Some credit card companies recommend that you notify them of any impending trip abroad so that they don't become suspicious of foreign transactions and block your charges. If you don't call your credit card company in advance, you can still call the card's toll-free emergency number if a charge is refused -- provided you remember to carry the phone number with you. Perhaps the most important lesson here is to carry more than one card, so you have a backup.

Taxes

In 1997, three of the four maritime provinces -- New Brunswick, Nova Scotia, and Newfoundland -- adopted the Harmonized Sales Tax, also known as the HST. This combined the provincial and federal sales into a flat rate of 15%, which is charged on all goods and services. On Prince Edward Island, you'll be charged a Goods and Services Tax of 7%, plus a provincial tax of 10%, on most items except footwear, clothing, books, and groceries.