When is a dollar not worth its weight in gold? When you're measuring in pounds.
British pounds, that is.
A few years ago, the pound reached an exchange rate of $2 against the American dollar for the first time since September 1992. While the pound has weakened a bit since then, it still makes for a challenging exchange rate for Americans traveling in the United Kingdom.
And though the exchange rate for the euro remains decent, Europe is one of the world's most expensive regions to explore. Hotel rates are sky-high in major capitals like London, Paris and Moscow, and the hefty cost of living (particularly in Scandinavian countries) makes everyday purchases such as meals and public transportation tickets a pricey proposition for travelers.
But that doesn't mean you can't see Europe on a budget. We've gathered 25 tips to help you save your pennies (or pounds!) on your next trip to Europe.
1. Get rate quotes in U.S. dollars. Long before you travel, when you are booking your hotel, car rental and other non-flight essentials, try to get quotes in U.S. dollars and pay in U.S. dollars whenever possible. This way there are no surprises when your credit card statement arrives and you find out you paid a lot more than your quick back-of-the-envelope estimate when calculating the exchange rate. With the boom in Web booking, many international hotels now offer guaranteed dollar rates to U.S. travelers; inquire at the time of booking.
2. Find your focus. When planning your European itinerary, consider exploring one region or country in depth rather than bouncing around from place to place. For example, spend a week sightseeing in Florence and taking day trips to nearby towns in Tuscany rather than trying to squeeze Milan, Venice, Florence and Rome into seven or eight days. You'll not only spare yourself hours of sitting in transit, but you'll also save big on transportation expenses such as airfare or pricey train tickets. Learn more about slow travel.
3. Save on museum entrance fees. Many museums offer free admission on certain days or nights of the week or at certain times of the month. (For example, the Louvre is free on the first Sunday of each month between October and March.) Check ahead of time for free admission at the museums you're interested in, and schedule your visit accordingly.
4. Find free entertainment. Similarly, keep an eye out for free concerts or performances going on in local parks, churches and other public venues. The best place to find these is in the local newspapers or entertainment listings -- or simply by stumbling upon them.
5. Purchase a pass. Most major cities offer special cards that include discounts or free admission for museums, attractions, tours and public transportation. These can be a great value if the card covers many of the attractions you were already planning to visit, but be sure to evaluate whether it's really worth it. If the card costs $30 and you're only going to use it at one or two museums, it may be better to pay a la carte.
6. Get cash from ATM's -- at a bank. An ATM is your best option for a combination of a fair exchange rate and low surcharges and fees. At an ATM, you'll likely pay a transaction fee from your bank (typically 1 - 2 percent), but you'll also get the favorable interbank exchange rate rather than the higher rates you'll find at typical exchange bureaus. To avoid excessive fees, take out large amounts of cash at a time and store the excess in a money belt or hotel safe. For more tips, see our feature on money safety.
You'll do well to avoid stand-alone, off-brand ATM's of the kind you can find stateside in the back of convenience stores. These typically have the highest transaction fees; use an ATM from a reputable bank instead. (If possible, use your own bank to avoid fees from other institutions. Check your bank's website for ATM and branch locations.)
7. Use your credit card. Many of the benefits of using an ATM card also apply to your credit card, particularly the strong exchange rates. However, keep in mind that many credit card companies charge fees for purchases made in foreign currencies, usually 1 - 3 percent. Choose the right card and you can avoid these fees. Capital One, for example, is a major credit card company that levies no surcharges on foreign transactions for its U.S. card holders. Check with your credit card companies to figure out which of your cards has the lowest fees for foreign purchases, and then use that one for your overseas purchases.
Out on the road, also check the fine print to make sure that your hotel, restaurant or other outfit does not tack on a percentage fee on all credit card transactions to cover authorization fees.
8. Choose your counter wisely. If you absolutely must use a currency exchange counter, skip the airport or train station kiosks where you are almost guaranteed to get the worst rate available. Instead, choose a bank if you can find one. Wherever you are, exchange only enough money to get the job of the moment done (whether it be a cab ride, emergency rations or the purchase of a pinata), and then get thee to an ATM as soon as you can.
9. Fly cash (and coin) light. Wait until you reach your destination before exchanging currency, and spend the bulk of your foreign currency at your destination before you go home. This way, you won't have to pick up and then dump a lot of money at an exchange booth while taking losses both coming and going.
This is especially applicable to the piles of rattling coins you accumulate while traveling. Good luck finding a place back home that accepts a bucket of euro tin and Queen Elizabeth heads in your neighborhood. (And remember -- those two-pound U.K. coins are worth more than $3 each!) Spend all your change on the way out, or at least stop at a bank and convert it to bills; you might actually get your money back someday if you do. For more tips, see Foreign Currency.
10. Don't be afraid to haggle. We wouldn't recommend trying this at Harrods or other department stores, but there are still plenty of places in Europe where bargaining is acceptable. Outdoor markets and street vendor stalls offer prime opportunities to try your haggling skills.