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 considerably over the past several years and inflation has hit Hungary. These factors combined have made Hungry only slightly less expensive for travelers than most Western countries. Labor-intensive services, such as picture framing, tailoring, shoe and watch repair, and the like, are still inexpensive.

As of this writing, the rate of exchange is $1 = 185 Ft (or 100 Ft = 54¢), and this is the rate used to calculate all the U.S. dollar prices in this guide. Of course, exchange rates fluctuate over time. Go to www.oanda.com/convert/cheatsheet, to print out a cheat sheet for currency exchange rates to save using a calculator all of the time.

Note: Most hotels and pensions in Budapest list their prices in euros, while others still list them in forints. They have done this 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, 2012. All hotels in Budapest accept payment in Hungarian forints as well as in many foreign currencies.

Currency

The best official exchange rates for cash are usually at the exchange booths all over the city. Many of them are associated with an Arany Pók clothing store, but others are independent. Their rates are always better than what you will get at a bank. The exchanges do not charge an additional commission, but build it into their conversions, which change daily. Traveler's checks can only be cashed at one Western Union outlet and very few banks. With the conversion factor and the commission, you will lose handsomely on the exchange. Neither restaurants nor shops will accept traveler's checks and we strongly urge travelers against using them here. Bank machines are common and the city center has a tremendous number of them, while exchange booths are also located throughout the city center, in train stations, and in most luxury hotels. Other than the Arany Pók exchange booths, those in the airport or hotels will almost uniformly offer less favorable rates than if you used your bankcard at an ATM. You may withdraw forints at the daily exchange rate from your home account through the Cirrus and PLUS networks.

If you are approached by someone on the street to exchange money, ignore them or tell them to leave you alone. This is a not only illegal if they really have the cash, but many times, it is a scam. If caught exchanging money from anyone other than an authorized change booth or bank, you could be arrested.

The Hungarian forint is convertible back to any other currency; however, when you look at the rate board, the buy rate is never as good as the sell rate. It does not matter if it is an exchange booth or a bank. This is standard procedure throughout the world. Coins are never accepted for exchange regardless of the currency, so if you have accumulated many of them, you may want to try to use them first before breaking more bills. You no longer have to retain your currency exchange receipts as proof of exchange.

Most people never think to use the airport ATMs (automated teller machines) only to pay higher rates by exchanging some money at home first, to cover airport incidentals. If you want to bypass any line, pay for your shuttle ride by credit card and then go to an ATM once you settle into your hotel. If you feel you need to have some cash, 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 offers service in several foreign languages, and exempts Amex gold and platinum cardholders from the 1% fee. Take note that the American Express office has closed in Hungry.

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 before you leave home as these numbers will not work in Europe or check online for ATM locations. Note that 800 numbers do not work from Europe, regardless if your company tells you they do, so be sure to call before leaving home or take the international collect number with you. 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 it is 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. Some banks have been known to waive fees temporarily for good customers or they may have a cooperative agreement with a foreign bank to waive fees. It pays to ask.

You can use your credit card to receive cash advances at ATMs, but you will need to know your PIN number. 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. Keep a record of your credit card phone numbers that are not toll free, but can be called collect in case of need. 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 the dinosaurs of travel. ATMs make 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, but then you are dependent on finding a bank that will cash them. Not all banks provide this service and those that do are not open on weekends. Travelers checks are not as good as cash here in Hungary, so rethink using them. I have only seen one bank that advertises that they accept traveler's checks, but not even at all of their branches. Many banks will flatly refuse.

However, you can buy traveler's checks at most banks at home. 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. 1/800-528-4800 or 1/336-393-1111 collect international; this number accepts collect calls, offers service in several foreign languages, and exempts Amex gold and platinum cardholders from the 1% fee.

Foreign currency traveler's checks are useful if you're traveling to one country, or to the euro zone; American Express and Thomas Cook 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 both companies charge a transaction fee per order (and a shipping fee if you order online). I have had problems with traveler's checks in other countries within Europe and quit using them years ago.

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 need the numbers to get a refund faster.

Credit Cards

Credit cards are another safe way to carry money. They also provide a convenient record of all your expenses, plus 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 specifically for that card. If you don't know yours, call the number on the back of your credit card and ask the company 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. This practice is becoming more rare with heightened security. Keep in mind that many banks now assess a 1%-to-3% "transaction fee" that they call a currency conversion charge 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.