Money

The local currency is the Bahamian dollar (B$), pegged to the U.S. dollar (US$) so that they're always equivalent. In fact, U.S. dollars are accepted widely throughout The Bahamas, thus Frommer's lists exact prices in U.S. dollars throughout this guide. The currency conversions quoted above were correct at press time. However, rates fluctuate, so before departing consult a currency-exchange website such as www.oanda.com/convert/classic to check up-to-the-minute rates.

It's always advisable to bring money in a variety of forms on a vacation: a mix of cash, credit cards, and traveler's checks. Most large hotels and stores accept traveler's checks, but you may have trouble using a personal check. There is no restriction on bringing foreign currency into The Bahamas.

Before you leave home, make sure you have enough petty cash on you to cover airport incidentals, tipping, and transportation to your hotel. You can also withdraw money upon arrival at an airport ATM, but only in the more popular destinations; there are very few ATMs anywhere in the Out Islands.

In general, prices in The Bahamas are about the same as in urban America, but they are less expensive than comparable costs in the U.K. Food is often more expensive, however, since so much of it has to be imported.

While traveling around The Bahamas, be sure to carry some small bills or loose change -- this will come in handy for tipping and public transportation. Consider keeping the change separate from your larger bills so that it's readily accessible and you'll be less of a target for theft.

ATMs

The easiest way to get cash away from home is from an ATM (automated teller machine). The Cirrus (tel. 800/424-7787; www.mastercard.com) and PLUS (tel. 800/843-7587; www.visa.com) networks span the globe; 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. Know your personal identification number (PIN) and your daily withdrawal limit. Ask your card carrier if your current PIN works in The Bahamas, particularly in the Out Islands. Every card is different, but some need a four-digit rather than a six-digit PIN to withdraw cash abroad.

Many banks impose a fee every time a card is used at a different bank's ATM, and that fee can be higher for international transactions (up to US$5 or more) than for domestic ones (rarely more than US$1.50). On top of this, the bank from which you withdraw cash may charge its own fee. To compare banks' ATM fees within the U.S., use www.bankrate.com. For international withdrawal fees, ask your bank.

You can also get cash advances on your credit card at an ATM. Credit card companies do try to protect themselves from theft by limiting the funds someone can withdraw outside their home country, so notify 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.

On New Providence Island and Paradise Island, there are plenty of ATMs, including one at the Lynden Pindling International Airport. There are far fewer ATMs on Grand Bahama Island (Freeport/Lucaya), but those that are here are strategically located -- including ones at the airport and the casino (of course).

Very few ATMs are in the Out Islands. If you must have cash on your Out Island trip, make arrangements before you leave Nassau or Freeport; outside of Freeport, we counted just seven ATMs in the entire remaining Out Islands, including the one at the post office in Marsh Harbour. This situation is fluid, however, and more ATMs may be added in the future.

Credit Cards

Credit cards are another safe way to carry money, but know that using them has become more difficult, especially in The Bahamas. They do provide a convenient record of all your expenses, and they generally offer relatively good exchange rates. You can usually withdraw cash advances from your credit cards at banks or ATMs, provided you know your PIN. Keep in mind that you'll pay interest from the moment of your withdrawal, even if you pay your monthly bills on time. Also, note that many banks now assess a 1% to 3% "transaction fee" on all charges you incur abroad (whether you're using the local currency or your native currency).

Be aware: Some establishments in The Bahamas might not accept your credit card unless you have a computer chip imbedded in it. The reason? To cut down on credit card fraud. Chip and PIN represents a major change in the way that credit and debit cards are used, with more and more banks issuing customers chip-and-PIN versions of their cards. In the future, increasing numbers of vendors will be asking for a four-digit personal identification number, or PIN, which will be entered into a keypad near the cash register. In some cases, a waiter will bring a hand-held model to your table to verify your credit card.

More and more places in The Bahamas are now moving from the magnetic-strip credit card to the chip-and-PIN system. During this changeover in technology, some retailers have falsely concluded that they can no longer take swipe cards or signature cards that lack PINs.

For the time being, you'll find that both the new and old cards are used in shops, hotels, and restaurants, regardless of whether they have the old credit and debit card machines or the new chip-and-PIN machines installed.

Traveler's Checks

You can buy traveler's checks at most banks. They are offered in denominations of US$20, US$50, US$100, US$500, and sometimes US$1,000. Generally, you'll pay a service charge ranging from 1% to 4%.

The most popular traveler's checks are offered by American Express (tel. 800/528-4800, or 800/221-7282 for cardholders -- this number accepts collect calls, offers service in several foreign languages, and exempts Amex gold and platinum cardholders from the 1% fee), Visa (tel. 800/732-1322; AAA members can obtain Visa checks for a US$9.95 fee -- for checks up to US$1,500 -- at most AAA offices or by calling tel. 866/339-3378), and MasterCard (tel. 800/223-9920).

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

Another option is the new prepaid traveler's check cards, reloadable cards that work much like debit cards but aren't linked to your checking account. The American Express Travelers Cheque Card, for example, requires a minimum deposit, sets a maximum balance, and has a one-time issuance fee of US$15. You can withdraw money from an ATM (for a fee of US$2.50 per transaction, not including bank fees). If you lose the card, your available funds will be refunded within 24 hours.