Money

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. You should also exchange enough petty cash to cover airport incidentals, tipping, and transportation to your hotel before you leave home, or withdraw money upon arrival at an airport ATM.

In many international destinations, ATMs offer the best exchange rates. Avoid exchanging money at commercial exchange bureaus and hotels, which often have the highest transaction fees.

Currency

Widely accepted on many of the islands, the U.S. dollar is the legal currency of the U.S. Virgin Islands, the British Virgin Islands, and Puerto Rico. Many islands use the Eastern Caribbean dollar, but will probably present your hotel bill in U.S. dollars.

ATMs

The easiest and best way to get cash away from home is from an ATM (automated teller machine), sometimes referred to as a "cash machine" or a "cashpoint." The Cirrus (tel. 800/424-7787; www.mastercard.com) and PLUS (tel. 800/843-7587; www.visa.com) networks span the globe. Go to your bank card's website to find ATM locations at your destination. Be sure you know your Personal Identification Number (PIN) and your daily withdrawal limit before you depart. 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. For international withdrawal fees, ask your bank.

Note: Banks that are members of the Global ATM Alliance charge no transaction fees for cash withdrawals at other Alliance member ATMs; these include Bank of America, Scotiabank (Canada, Caribbean & Mexico), Barclays (U.K. and parts of Africa), Deutsche Bank (Germany, Poland, Spain, and Italy), and BNP Paribas (France).

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 withdraw cash advances from your credit cards at banks or ATMs but high fees make credit-card cash advances a pricey way to get cash. 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).

It's highly recommended that you travel with at least one major credit card. You must have a credit card to rent a car, and hotels and airlines usually require a credit card imprint as a deposit against expenses.

Traveler's Checks

You can buy traveler's checks at most banks. They are offered in denominations of $20, $50, $100, $500, and sometimes $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. 800/221-7282 for card holders -- 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 $9.95 fee for checks up to $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 the traveler's checks 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.

American Express, Thomas Cook, Visa, and MasterCard offer foreign currency traveler's checks, useful if you're traveling to one country or to the euro zone; they're accepted at locations where dollar checks may not be.

Another option is the 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 $14.95. You can withdraw money from an ATM (for a fee of $2.50 per transaction, not including bank fees), and the funds can be purchased in dollars, euros, or pounds. If you lose the card, your available funds will be refunded within 24 hours.

Small Change -- When you change money, ask for some small bills or loose change. Petty cash 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. U.S. dollars are accepted nearly everywhere, and in some countries, such as Jamaica, most locals prefer tips in U.S. dollars.