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If there is one thing old Spaniards wax nostalgic over, it's not the police state they experienced under the dictatorship of Franco, but the prices paid back then. How they miss the days when you could go into a restaurant and order a meal with wine for 50 pesetas.

Regrettably, Spain is no longer a budget destination. In Madrid, you can often find hotels charging the same prices as in London or Paris.

Taken as a whole, though, Madrid remains slightly below the cost-of-living index of other major European capitals. Unless the current monetary situation is drastically altered, there is a reasonably favorable exchange rate in Spain when you pay in U.S. dollars.

Prices in Madrid are generally high, but you get good value for your money. Hotels are usually clean and comfortable, and restaurants generally offer good cuisine and ample portions made with quality ingredients. Trains are fast and on time, and most service personnel treat you with respect.

In Madrid, many prices for children -- generally defined as ages 6 to 17 -- are lower than for adults. Fees for children under 6 are generally waived.

The Euro

In January 2002, the largest money-changing operation in history led to the deliberate obsolescence of many of Europe's individual national currencies, including the Spanish peseta. In its place was substituted the euro (abbreviation EUR), a currency that, at this writing, was based on the fiscal participation of a dozen nations of Europe. Exchange rates of participating countries are locked into a common currency fluctuating against the dollar. For more details on the euro, check out http://ec.europa.eu/euro.index_en.html.

For up-to-date rates at any time, check the Universal Currency Converter website www.xe.com/ucc.

Exchange rates are more favorable at the point of arrival. Nevertheless, it's often helpful to exchange at least some money before going abroad to take care of incidentals on your way to your hotel, such as your metro, bus, or taxi fare. Currency and traveler's checks (for which you'll receive a better rate than cash) can be changed at all principal airports, though standing in line at the cambio (exchange bureau) in Madrid's Barajas airport could make you miss the next bus leaving for downtown.

Before leaving, therefore, check with any of your local American Express or Thomas Cook offices or major banks. Or, order euros in advance from the following: American Express (tel. 800/221-7282; www.americanexpress.com), Thomas Cook (tel. 800/223-7373; www.thomascook.com), or Capital for Foreign Exchange (tel. 888/842-0880).

On arrival in Madrid, it's best to exchange currency or traveler's checks at a bank, not a cambio, hotel, or shop. Note the rates and ask about commission fees; it can sometimes pay to shop around and ask the right questions.

Many Madrid hotels don't accept dollar- or pound-denominated checks; those that do will almost certainly charge for the conversion. In some cases, they'll accept countersigned traveler's checks or a credit card, but if you're prepaying a deposit on hotel reservations, it's cheaper and easier to pay with a check drawn on a Spanish bank.

This can be arranged by a large commercial bank or by a specialist such as Ruesch International, 700 11th St. NW, 4th Floor, Washington, DC 20001-4507 (tel. 800/424-2923; www.ruesch.com), which performs a wide variety of conversion-related tasks, usually for only $5 to $15 per transaction.

If you need a check payable in euros, call Ruesch's toll-free number, describe what you need, and note the transaction number given to you. Mail your dollar-denominated personal check (payable to Ruesch International) to the address above. Upon receiving this, the company will mail a check denominated in euros for the financial equivalent, minus the $2 charge. The company can also help you with many different kinds of wire transfers and conversions of VAT (value-added tax, known as IVA in Spain), refund checks, and also will mail brochures and information packets on request. Brits can contact Ruesch International Ltd., Marble Arch Tower, 14 Floor, 55 Bryanston St., London W14 7AA, England (tel. 0207/563-3300).

The currency exchange at Chamartín railway station (Metro: Chamartín) is open 24 hours and gives the best rates in the capital.

Many banks in Spain still charge a 1% to 3% commission, with a minimum charge of 3€. However, branches of Banco Central Hispano charge no commission. Branches of El Corte Inglés, the department store chain, offer currency exchange facilities at various rates. You get the worst rates at street kiosks such as Chequepoint, Exact Change, and Cambios-Uno. Although they're handy and charge no commission, their rates are very low. Naturally, American Express offices offer the best rates on their own checks. ATMs are plentiful in Madrid.

Emergency Cash -- The Fastest Way -- If you need emergency cash over the weekend when all banks and American Express offices are closed, you can have money wired to you from Western Union (tel. 800/325-6000; www.westernunion.com). You must present valid ID to pick up the cash at the Western Union office. However, in most countries, you can pick up a money transfer even if you don't have valid identification, as long as you can answer a test question provided by the sender. Be sure to let the sender know in advance that you don't have ID. If you need to use a test question instead of ID, the sender must take cash to his or her local Western Union office, rather than transferring the money over the phone or online.

ATMs

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." In Spain, only four-digit PINs are valid, so be sure to change any five- or six-digit PIN you may have to a four-digit number before you go.

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. 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.

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, 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).

American Express, Visa, MasterCard, and Diners Club credit cards are all widely accepted in Spain. Discover Card is not widely accepted in Spain.

Traveler's Checks

Traveler's checks are accepted in Spain at banks, travel agencies, hotels, and some shops, and you can buy them at most banks before you leave home. 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 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 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 a refund faster if you know the numbers.

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.