Money

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¢.

Regrettably, Spain is no longer a budget destination. In such major cities as Barcelona or Madrid, you can often find hotels charging the same prices as ones in London or Paris. Once you move beyond Spain's tourist meccas into regional towns, provincial capitals, and especially the countryside, the prices drop considerably. For example, it's possible to enjoy a 6-week vacation in rural Spain for about the same price that 10 days to 2 weeks could cost in Madrid.

Taken as a whole, though, Spain remains slightly below the cost-of-living index of such countries as England, Italy, Germany, and France. Unfortunately, unless the current monetary situation drastically changes, there is a very unfavorable exchange rate in Spain when you pay in U.S. dollars.

Prices in Spain 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 Spain, many prices for children -- generally defined as ages 6 to 17 -- are lower than for adults. Fees for children 5 and under are generally waived.

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.

Currency

The euro became the official currency of Spain and 11 other participating countries on January 1, 1999. For details on the euro, check out www.europa.eu.

When you change money, ask for some small bills or loose change. Petty cash will come in handy for tipping and public transportation. Consider keeping the change separate from your larger bills, so that it's readily accessible and you'll be less of a target for theft.

You can exchange money at your local American Express (tel. 800/637-3782; www.americanexpress.com) or Thomas Cook (tel. 800/223-7373; www.thomascook.com) offices, or at a bank. If you're far from a bank with currency-exchange services, American Express offers traveler's checks and foreign currency, though with a $15 order fee and additional shipping costs.

Foreign Currency vs. the U.S. Dollar -- Conversion ratios between the U.S. dollar and other currencies fluctuate, and their differences could affect the relative costs of your trip. Check the Universal Currency Converter (www.xe.com/ucc) for updated rates.

At the time of this writing, $1 was worth approximately .68 Eurocents. Inversely stated, 1€ was worth approximately $1.45.

The British Pound, the U.S. Dollar & the Euro: At press time, £1 equaled approximately $2 and approximately 1.33€.

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 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.

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 Paribus (France).

Credit Cards

Credit cards are another safe way to carry money, but their use has become more difficult, especially in Spain. 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 represent 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, 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 Spain 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 Spain 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 can't take signature cards that don't have PINS anymore.

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 before you arrive in Spain 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 four-digit PIN from your credit card's issuing bank before leaving home.
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• Or call the number on the back of each card and ask for a four-digit PIN.
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• 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.
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• 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.
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• 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 Spain, although frankly, merchants prefer cash. Because of difficulties with credit cards or ATMs 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.