Money

London is becoming one of the most expensive cities on the planet, far more expensive than New York (Brits now view the Big Apple as a bargain basement). London is not as expensive as Tokyo or Oslo, but even an average hotel rate can cost £100 ($200) or more -- in many cases, much, much more.

You'll avoid lines at airport ATMs 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. 800/673-3782, but they'll charge a $15 order fee and additional shipping costs.

Pounds & Pence -- Britain's decimal monetary system is based on the pound (£), which is made up of 100 pence (written as "p"). Pounds are also called quid by Britons. There are £1 and £2 coins, as well as coins of 50p, 20p, 10p, 5p, 2p, and 1p. Banknotes come in denominations of £5, £10, £20, and £50.

As a general guideline, the price conversions in this guide have been computed at the rate of £1 = $2. Bear in mind, however, that exchange rates fluctuate daily.

ATMs

ATMs are widely available in London. The easiest and best way to get cash away from home is from an ATM, 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; 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.

There are problems involved in the use of ATMs. For example, if you make a mistake and punch your secret code wrong into the machine three times, that machine will swallow your card on the assumption that it is being fraudulently used.

Users with alphabetical rather than numerical PINS may be thrown off by the lack of letters on London cash machines. If your PIN number is longer than four digits, check with your bank to see if you can use the first four digits or will you have to get a new number for use in Britain.

To get cash advance by using a credit card at an ATM machine, ask for a PIN from your credit card company such as Visa before leaving your home country.

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.

Credit Cards

Credit cards are another safe way to carry money, but their use has become more difficult, especially in London. They also provide a convenient record of all your expenses, and they generally offer relatively good exchange rates. You can usually 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).

There is almost no difference in the acceptance of a debit or a standard credit card.

Chip and PIN represents a change in the way that credit and debit cards are used. The program is designed to cut down on the fraudulent use of credit cards. More and more banks are issuing customers Chip and PIN versions of their debit or credit cards. In the future, more and more vendors will be asking for a four-digit personal identification or PIN number which will be entered into a keypad near the cash register. In some cases, a waiter will bring a hand-held model to your table to verify your credit card.

Warning: Some establishments in London might not accept your credit card unless you have a computer chip imbedded in it. The reason? To cut down on credit card fraud.

More and more places in London are moving from the magnetic strip credit card to the new system of Chip and PIN. In the changeover in technology, some retailers have falsely concluded that they can no longer take swipe cards or signature cards that don't have PINs.

For the time being both the new and old cards are used in shops, hotels, and restaurants regardless of whether they have the old credit and debit cards machines or the new Chip and PIN machines installed. Expect a lot of confusion when you arrive in England or elsewhere.

Major Change in Credit Cards -- In the interim between traditional swipe credit cards and those with an embedded computer chip, here's what you can do to protect yourself.

• Get a 4-digit PIN from your credit card's issuing bank before leaving home.
• Or call the number on the back of each card and ask for a 4-digit PIN.
• Keep an eye out for the right logo displayed in a retailer's window. You want Visa or MasterCard, not Maestro, Visa Electron, or Carte Bleue.
• Know that your AmEx card will work where an AmEx logo is displayed (but the card is not as widely accepted as Visa and MasterCard).
• As a last resort, make sure you have enough cash to cover your purchase.

Traveler's Checks

You can buy traveler's checks at most banks, and they are widely accepted in London, although frankly merchants prefer cash. Because of difficulties with credit cards or ATM machines that can reject your card for no apparent reason, travelers are once again buying traveler's checks for security in case something goes wrong with their plastic. 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. 800/528-4800, 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 $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).

American Express, Thomas Cook, Visa, and MasterCard offer foreign currency traveler's checks, which 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.

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 your refund faster.