Money

The basic unit of currency in Hungary is the forint (Ft). Coins come in denominations of 1, 2, 5, 10, 20, 50, and 100 Ft. Banknotes come in denominations of 200, 500, 1,000, 5,000, 10,000, and 20,000 Ft.

The U.S. dollar has weakened over the past several years, but Hungary continues to be considerably less expensive for travelers than most Western countries. Labor-intensive services, such as picture framing, tailoring, shoe and watch repair, and the like, are particularly inexpensive.

As of this writing, the rate of exchange is US$1 = 200 Ft (or 100 Ft = US50¢), and this is the rate used to calculate all the U.S. dollar prices in this book. Of course, exchange rates fluctuate over time.

Note: Several hotels and pensions in Budapest list their prices in U.S. dollars, while most list prices in euros. This is done predominantly as a hedge against forint inflation; Hungary became a member of the European Union in May 2004, but is not planning to introduce the euro until, optimistically, 2010. All hotels in Budapest accept payment in Hungarian forints as well as in most foreign currencies.

Currency

The best official rates for both cash and traveler's checks are obtained at banks. Exchange booths are also located throughout the city center, in train stations, and in most luxury hotels, but exchange booths almost uniformly offer less favorable rates than banks. ATMs are found in front of banks throughout the city or in major shopping malls. You may withdraw forints at the daily exchange rate from your home account through the Cirrus and PLUS networks. At some banks and at all exchange booths, you will get a better rate when exchanging cash.

You should regard with extreme suspicion anyone who accosts you on the street wanting to change money, especially someone offering you a rate more than 2% to 3% better than the official one. Such a person is certainly out to cheat you. It is not recommended to exchange money in anything but a bank or a registered exchange booth.

Since 2001, with the full convertibility of the Hungarian forint, there are no longer any restrictions regarding re-exchange of forints back into your currency. Consequently, unlike in the past, you need not retain your currency exchange receipts as proof of exchange.

You'll avoid lines at airport ATMs (automated teller machines) 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. American Express cardholders should dial tel. 800/221-7282; this number accepts collect calls, offers service in several foreign languages, and exempts Amex gold and platinum cardholders from the 1% fee.

ATMs

The easiest and best 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, 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. Note: Remember that 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. To compare banks' ATM fees within the U.S., use www.bankrate.com. For international withdrawal fees, ask your bank.

You can use your credit card to receive cash advances at ATMs. 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.

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 buy traveler's checks at most banks. 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%. By phone, you can buy traveler's checks by calling tel. 800/807-6233. American Express cardholders should dial tel. 800/221-7282; this number accepts collect calls, offers service in several foreign languages, and exempts Amex gold and platinum cardholders 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, or to the euro zone; 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%-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.