I always bring a mix of cash, credit and debit cards, and traveler's checks. It's impractical to change cash into most island currencies before leaving home, so my first stop upon arrival is at an airport ATM or exchange counter to get enough local cash to cover airport incidentals, tipping, and hotel transfer.
How much money you will need depends to a large extent on which islands you decide to visit and which currency you use. French Polynesia is far and away the most expensive, with costs comparable to or exceeding most major U.S. cities. This is especially so for those of us spending depressed U.S. dollars, because the French Polynesian currency is pegged to the Euro. Prices are more reasonable in the Cook Islands, though they will seem relatively expensive to New Zealanders. Samoa and Tonga are the least expensive, with Fiji in between. Overall, the islands will cost more than most Southeast Asian destinations.
The Cook Islands use New Zealand dollars (NZ$ in this book, or NZD in bank lingo), and American Samoa spends U.S. dollars (US$, or USD). Other South Pacific countries have their own currencies -- Fiji dollars (F$ or FID), French Pacific francs (CFP or XFP), Samoan tala (S$, WST, or SAT), and Tongan pa'anga (T$ or TOP).
To find up-to-the-minute exchange rates, go to www.xe.com.
U.S., Australian, and New Zealand dollars are widely accepted (euros, too, in French Polynesia), and the local banks will change other major currencies.
You'll get a better exchange rate at a bank or currency exchange shop than at a hotel or store. Most banks charge a set fee to change notes and traveler's checks, which can wipe out the advantage if you're changing small denominations.
Small Change -- When I change money (or after I've withdrawn local currency from an ATM), I ask for some small bills, as petty cash comes in handy for public transportation (South Pacific taxi drivers never seem to have change for large bills). I keep my small money separate from my larger bills, so it's readily accessible while my big notes are less of a target for thieves. I also go first to WestPac Bank's ATMs, which usually dispense smaller notes than those at ANZ Bank (they are the major banks out here).
Getting Rid of Your Leftover Currency -- Use your leftover currency to pay part of your hotel bill when leaving the South Pacific. Put the rest on your credit card. It will save you the trouble of having to change it at the airport.
Automated teller machines (ATMs), sometimes referred to as "cash machines" or "cashpoints," are becoming more widespread in the islands and are the easiest way to get local currency. I tell you in the "Fast Facts" section whether an island has ATM machines. Be sure to read this information -- or check with the banks or tourist offices in the main towns -- before heading off cashless to an outer island.
The Cirrus (tel. 800/424-7787; www.mastercard.com) and PLUS (tel. 800/843-7587; www.visa.com) networks are present in the islands.
I carry two debit (that is, "cash" or "check") cards so that if one doesn't work in a bank's ATM, I have a backup. I use them to get local cash for two reasons: I get a better exchange rate than if I had changed traveler's checks, and I avoid the local banks' exchange fees.
Visa and MasterCard tack a 1% currency conversion fee to every debit card withdrawal, and many banks add up to 5% as their own "foreign transaction fee." In addition, many banks impose a fee every time you use a card at another bank's ATM, and that fee can be even higher for international transactions (up to $5 or more). Ask your bank about its international withdrawal fees.
Be sure you know your personal identification number (PIN) for each card before you leave home, and be sure to find out your daily withdrawal limit before you depart. Four-digit PINs work in the islands.
You can withdraw cash advances from your credit cards at banks or ATMs, but high withdrawal fees make credit card cash advances a pricey way to get cash. In addition to the fees, you'll pay interest from the moment of your withdrawal, even if you pay your bills on time.
On the other hand, you can use MasterCard and Visa cards to charge your expenses at most island hotels, car-rental companies, restaurants, and large shops. Many also accept American Express. Only the major hotels and car-rental firms accept Diners Club, however; and none takes Discover cards. Always ask first, and when you're away from the main towns, don't count on putting anything on plastic.
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). I use my Capital One credit card because it charges no foreign transaction fee, nor does it have an annual fee. Read your card member agreement -- or call the customer service department -- for charges.
Credit Card Add-Ons -- Many island businesses add 3% to 5% to your bill if you use a credit card, while others may offer a similar discount for cash payments. Credit card issuers frown on the add-ons, but the locals do it anyway. Always ask if there's an add-on or discount.
I seldom use them, but I carry a few hundred U.S. dollars in traveler's checks in case the local ATM runs out of cash or is on the blink. You can get traveler's checks at most banks 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 tel. 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).
Be sure to keep a record of the traveler's checks 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.