The official unit of currency in Brazil is the Real (pronounced ray-all; the plural is Reais, pronounced ray-eyes), which the Brazilian government introduced in 1994 in an attempt to control inflation. International money speculations around the 2002 presidential elections sent the Real into a tailspin, arriving at a record low of nearly R$4 to the U.S. dollar. When it became clear the new leftist president Lula da Silva was actually planning to follow a quite conservative monetary policy, the Real settled back around R$3 to the U.S. dollar. Since then, the U.S. dollar has slowly declined to its current level of about R$2.4 to the dollar. For travelers this means that Brazil is still very affordable, though not the bargain it was in years past. We give the prices in Reais (R$) and U.S. dollars (US$), accurate as of press time and calculated at the rate of R$1 = US42¢ or R$2.40 = US$1. (For reference purposes, other currency equivalents are UK£1 = R$4.32; C$1 = R$2; A$1 = R$1.80; NZ$1 = R$1.66.) The U.S. dollar is likely to continue its current decline, which might tempt you to convert those dollars into Reais, but remember that the Real is also subject to a substantial yearly devaluation because of inflation. For safety reasons, the best bet is to keep your dollars in your bank account and use ATMs to withdraw cash as needed. Tip: When exchanging money, be it cash or traveler's checks, always keep the receipt. You will need it in case you want to change back any unused Reais at the end of your trip. See www.xe.com online for an easy currency converter.
The U.S. Dollar -- The ongoing fall of the U.S. dollar has in some cases made it difficult to get accurate rates. Up until 2004, many businesses based their rates on the U.S. dollar. With the dollar's fall, some businesses have lowered their Real prices to keep a steady dollar price, others have increased the Real rate, and still others have switched over to accounting in euros. For U.S. travelers, it means that Brazil has gotten a little bit more expensive. When prices are listed in U.S. dollars only, it's because these companies quote their prices directly in dollars. If in doubt, ask. And though it's a bad idea to carry large wads of cash, it can be helpful to bring a small amount of U.S. cash ($10s or $20s only, no $100s) as an emergency supply in case that ATM is broken or your credit card isn't working. Even in the smallest towns people will know the exchange rate, and someone will be happy to take the U.S. dollars off your hands.
Traveler's Checks -- Traveler's checks aren't a very good idea in Brazil. Most shops won't accept them, hotels give a miserable exchange rate (if they cash them), and many banks have a strange policy that they will not cash your traveler's checks unless you have an account at that branch of that bank. The Banco do Brasil is the only bank that will cash them with a minimum of hassle but will charge a US$20 service fee.
ATM Networks -- The best way to get cash at a reasonable exchange rate is by withdrawing money from an ATM. Brazil's financial infrastructure is very sophisticated, and ATMs were common here even before they were used in western Europe. You will find them everywhere in Brazil, even in the smallest towns. The only trick is finding one that works with your card. ATMs are linked to a network that most likely includes your bank at home. Cirrus (tel. 800/424-7787; www.mastercard.com) and PLUS (tel. 800/843-7587; www.visa.com) are the two most popular networks in the U.S.; call or check online for ATM locations at your destination. You need to have a four-digit PIN to be able to access ATMs in Brazil. For most ATMs the limit is R$1,000 (US$417) but depending on the machine these amounts may be lower.
The vast majority of travelers find they are able to use the HSBC and Banco do Brasil ATMs bearing a PLUS/Visa and Cirrus/MasterCard logo. Almost all Brazilian airports have HSBC and Banco do Brasil ATMs. However, it's not a bad idea to bring two different cards to increase your access options with other banks. (Small towns normally only have one ATM. It will be PLUS/Visa or Cirrus/MasterCard, but not always both.) Bradesco, Banco 24 horas, and Citibank ATMs are often compatible with PLUS/Visa. If in doubt, check with your bank to find out which Brazilian bank networks are compatible with your card. Also, plan ahead to ensure that you have enough cash; for safety reasons many ATMs do not operate 24 hours. Often they will close after 10pm or only allow a small amount of cash to be withdrawn during the off-hours. Your best bets for late-night withdrawals are airports, malls, or gas stations.
Finally, make sure that during New Year's and Carnaval you get enough cash ahead of time, as machines often run out of money by the end of the holidays.
Tip: Before you leave home write down all your card numbers, expiration dates, and contact phone numbers. Leave a copy with someone you can easily reach, and e-mail a copy to yourself and save it in an account that can be accessed anywhere, like Hotmail or Yahoo!, so you have the information at your fingertips in case of loss or theft.
Credit Cards -- The best exchange rates can be obtained through credit cards, which are accepted at most Brazilian shops and hotels and restaurants. Just keep in mind that you are sometimes able to negotiate a better discount on a room or in a store if you pay cash. The most commonly accepted cards are Visa and MasterCard. American Express and Diners Club are also often accepted. It's a good idea to have at least two cards as some stores and restaurants may only accept one card (usually Visa or MasterCard; Diners and Amex are less common, especially in small towns). Keep in mind 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 U.S. 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.
Remember that if you use your credit card to obtain a cash advance, interest begins to accrue from the moment the withdrawal is made.
