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.

The Cayman Islands are one of the most upmarket destinations in the Caribbean, although prices aren't as sky-high as on the French island of St. Barts or the British-affiliated island of Anguilla. Nevertheless, a frugal traveler will do better in Puerto Rico or the Dominican Republic. The cost of living is about 20% higher in the Cayman Islands than it is in the United States.

Brace yourself for the high prices that resorts charge. There is almost nothing in the budget category. To give you an idea of the price structure, an "inexpensive" room in Grand Cayman is often one charging under US$150 (£76) a night for a double, a price that might buy you a first-class hotel in many parts of America.

Most of the big hotels along Seven Mile Beach don't offer meal plans such as MAP (the Modified American Plan, which includes breakfast and dinner). You'll often have to pay for your food a la carte. Food prices are high since most everything is imported, but they are not nearly as lofty as the hotel prices; US$20 (£10) to US$35 (£18) will get you a main course at a typical restaurant. "Budget" would be any restaurant offering main courses for US$18 (£9) and under.

Currency -- Legal tender is the Cayman Islands dollar (CI$), which is more or less fixed at US$1.25. Stated conversely, CI80¢ equals US$1. It's helpful to know that U.S. dollars are readily accepted across the Cayman Islands. As it relates to the British pound, one Cayman Islands dollar equals approximately 60p. Stated differently, £1 equals approximately CI$1.70. And as it relates to the Canadian dollar, one Cayman Islands dollar equals approximately C$1.30. Stated differently, C$1 equals approximately CI77¢. Keep in mind that the chart as laid out below is intended only for very rough guidance. We recommend consulting more up-to-the-minute conversion ratios just prior or during your trip. Though the rate between the CI$ and the US$ is permanently fixed as part of an international banking agreement, the ratios between the CI$, the British pound, and the Canadian dollar fluctuate slightly, based on frequently changing financial and political factors.

Warning: Be alert about which currency is being quoted at any given time. Hotels tend to quote their rates in U.S. dollars, while most restaurants and virtually all nightclubs and gift shops quote their prices in Cayman Island dollars. Misunderstanding the currency being quoted for any given transaction can be embarrassing and expensive.

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 US$5/£2.50 or more) than for domestic ones (where they're rarely more than $2/£1). 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, and Mexico), Barclays (U.K. and parts of Africa), Deutsche Bank (Germany, Poland, Spain, and Italy), and BNP Paribas (France).

Although ATMs are hard to come by on Cayman Brac and Little Cayman, banks with ATMs are easy to find in George Town, the capital of Grand Cayman. You can usually request U.S. dollars or Cayman dollars at most banks and ATMs.

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).

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. 800/807-6233 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 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 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$14.95. You can withdraw money from an ATM (for a fee of US$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.