Money

According to figures released by the Hong Kong Tourism Board, the average per capita spending of overnight visitors to Hong Kong is HK$4,663 (US$606/£333) per day on hotels, meals, shopping, and entertainment (frugal travelers, of course, can experience Hong Kong on much less). While Hong Kong may seem expensive compared to many other Asian cities, bargains abound, especially when it comes to off-season hotel rates, meals at local Chinese restaurants, public transportation, and museum admissions. With a long history of tourism -- and shopping -- Hong Kong is well equipped to meet visitors' money demands.

Currency

The basic unit of currency is the Hong Kong dollar (HK$), which is divided into 100 cents. Since 1983, when negotiations between Britain and China concerning Hong Kong's future sent public confidence and the value of the Hong Kong dollar into a nose dive, the Hong Kong dollar has been officially pegged to the U.S. dollar at a rate of 7.8 (which means that US$1 equals HK$7.80), giving the Hong Kong currency greater stability.

Three banks, the Hongkong and Shanghai Banking Corporation (HSBC), the Bank of China, and the Standard Chartered Bank, all issue their own colorful notes, in denominations of HK$10, HK$20, HK$50, HK$100, HK$500, and HK$1,000. The government also issues a $10 note. As for coins, they're issued by the government in bronze for HK10¢, HK20¢, and HK50¢ pieces; in silver for HK$1, HK$2, and HK$5; and in nickel and bronze for HK$10.

The Hong Kong Dollar, the British Pound & the U.S. Dollar

For American Readers -- Although the official conversion rate is pegged at HK$7.80 for 1 U.S. dollar, the average rate of exchange at banks and exchange offices is closer to HK$7.70 (or HK$1 = US13¢) so this is the rate of exchange used to calculate the U.S. dollar values given in this book (rounded off to the nearest nickel for prices less than US$10 and to the nearest dollar for prices more than US$10). While stable since it was pegged to the U.S. dollar, this exchange rate may not be the same when you travel to Hong Kong.

For British Readers -- At this writing, £1 equals approximately HK$14 (or HK$1= 7 pence).

At any rate, throughout the SAR, you'll see the dollar sign ("$"), which of course refers to Hong Kong dollars, not U.S. dollars. To prevent confusion, this guide identifies Hong Kong dollars with the symbol "HK$" (followed in parentheses by the U.S. dollar conversion). Although the official conversion rate is pegged at 7.8, you'll receive slightly less at banks, hotels, and currency exchange offices. During my last trip, I encountered exchange rates ranging from 7.72 (at a Wing Lung Bank) to 7.07 (at a currency exchange office).

For the matter of convenience, all conversions in this book are based on HK$7.70 to US$1 and HK$14 to £1. If the exchange rate changes drastically -- that is, it is no longer pegged to the U.S. dollar -- plan your budget accordingly.

When exchanging money in Hong Kong, you'll get the best rate at banks. The exchange rate can vary among banks, however, so it may pay to shop around if you're exchanging a large amount. In addition, most banks also charge commission; a check during my last visit revealed commissions ranging from HK$40 (US$5.20/£2.85) at a Wing Lung Bank to HK$100 (US$13/£7.14) at a Hongkong and Shanghai Bank. Others many not charge commission but have lower rates. Most charge a commission on traveler's checks (unless, of course, you're cashing American Express checks at an American Express office), but the exchange rate is usually better for traveler's checks than cash. Ask your hotel where the closest Hang Seng Bank or Wing Lung Bank is, since I find these generally have favorable rates and low commission. The main bank of Wing Lung is at 45 Des Voeux Road Central in the Central District (tel. 852/2826 8333), while Hang Seng has a convenient location next to Kowloon Hotel at 4 Hankow Rd., Tsim Sha Tsui (tel. 852/2198 0575).

Hotels give a slightly less favorable exchange rate but are convenient because they're open at night and on weekends. Money changers are found in the tourist areas, especially along Nathan Road in Tsim Sha Tsui. Avoid them if you can. They often charge a commission or a "changing fee," or give a much lower rate. Check exactly how much you'll get in return before handing over your money. If you exchange money at Hong Kong International Airport, change only what you need to get into town -- US$50 or £28 should be enough -- because the exchange rate here is lower than what you'll get at banks in town.

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." There are ATMs throughout Hong Kong, making a credit or debit card the most convenient way to obtain cash since it eliminates the hassle of exchanging money only during banking hours. 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. Be sure you know your 4-digit 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. For international withdrawal fees, ask your bank.

Holders of MasterCard and Visa can use ATMs at the airport and various convenient locations around the city, including the Star Ferry concourses in Kowloon and Central, all major MTR (subway) stations, and major banks such as the Hongkong and Shanghai Banking Corporation and Hang Seng Bank (which have 24-hr. machines). American Express cardholders have access to Jetco ATMs around town and can also withdraw local currency or traveler's checks at the Express Cash machines at both American Express offices.

Credit Cards

Credit cards are a safe way to carry money, provide a convenient record of all your expenses, and generally offer relatively good exchange rates. You can 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).

Although many of the smaller shops in Hong Kong will give better prices if you pay in cash with local currency, most shops accept international credit cards, although some of the smaller ones do not. Look for credit card signs displayed on the front door or near the cash register. Readily accepted credit cards include American Express, Visa, and MasterCard. Note, however, that shops have to pay an extra fee for transactions that take place with a credit card -- and they will try to pass on that expense to you. Keep this in mind if you're bargaining, and make sure the shopkeeper knows whether you're going to pay with cash or plastic. All major hotels and better restaurants accept credit cards, but budget restaurants often don't. If you do pay with a credit card, check to make sure that "HK" appears before the dollar sign given for the total amount.

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. 800/807-6233 or 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).

If you 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.

You'll need your passport to exchange traveler's checks. Traveler's checks can be readily exchanged for Hong Kong dollars at banks, hotels, and currency-exchange offices (banks provide the most favorable rates). Traveler's checks also command a slightly better exchange rate than cash. Although Thomas Cook and other agencies can issue traveler's checks in Hong Kong currency, I don't think this offers any advantage, since Hong Kong shops, restaurants, and hotels are not as willing as their U.S. counterparts to accept traveler's checks for payment.