Currency

The basic unit of currency in Hungary is the forint (Ft). Coins come in denominations of 1, 2, 5, 10, 20, 50, and 100 Ft. Banknotes come in denominations of 200, 500, 1,000, 5,000, 10,000, and 20,000 Ft.

Over the past several years, the weakened U.S. dollar has fallen short of its earlier pattern of gaining against the Hungarian forint at roughly the same rate as inflation in Hungary. During the 1990s and early 2000s, the U.S. dollar, in general, typically went about as far in Hungary as it had the previous year. This trend seems to have stopped for now. However, Hungary continues to be considerably less expensive for travelers than most Western countries. Labor-intensive services, such as picture framing, tailoring, shoe and watch repair, and the like, are particularly inexpensive.

As of this writing, the rate of exchange is $1 = 220 Ft (or 100 Ft = 45¢), and this is the rate used to calculate all the U.S. dollar prices in this book. Of course, exchange rates fluctuate over time.

Note: Several hotels and pensions in Budapest list their prices in U.S. dollars, while most list prices in euros. This is done predominantly as a hedge against forint inflation; Hungary became a member of the European Union in May 2004, but is not planning to introduce the euro until 2007. All hotels in Budapest accept payment in Hungarian forints as well as in most foreign currencies.

Changing Money

It's a good idea to exchange at least some money -- just enough to cover airport incidentals and transportation to your hotel -- before you leave home, so you can avoid lines at airport ATMs (automated teller machines). You can exchange money at your local American Express or Thomas Cook office or your bank. If you're far away 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, at www.americanexpress.com or tel. 800/807-6233.

The best official rates for both cash and traveler's checks are obtained at banks. Exchange booths are also located throughout the city center, in train stations, and in most luxury hotels, but exchange booths almost uniformly offer less favorable rates than banks. This is particularly true of the Inter Change chain, which offers a rate up to 20% less favorable than the going bank rate, depending on the amount you exchange. ATMs are found in front of banks throughout the city or in major shopping malls. You may withdraw forints at the daily exchange rate from your home account through the Cirrus and PLUS networks (see "ATMs," below). At some banks and at all exchange booths, you will get a better rate when exchanging cash.

The bands of honest money-changers that were once a permanent fixture of Keleti Station are scarcely to be found anymore. You should regard with extreme suspicion anyone who accosts you on the street wanting to change money, especially someone offering you a rate more than 2% to 3% better than the official one. Such a person is certainly out to cheat you.

Since 2001, with the full convertibility of the Hungarian forint, there are no longer any restrictions regarding re-exchange of forints back into your currency. Consequently, unlike in the past, you need not retain your currency exchange receipts as proof of exchange.

The Hungarian Forint

For American Readers -- At this writing $1 = approximately 220 Ft (or 100 Ft = 45¢), and this was the rate of exchange used to calculate the dollar values given in this guide.

For British Readers -- At this writing £1 = approximately 375 Ft (or 100 Ft = 27p).

ATMs

The easiest and best way to get cash away from home is from an ATM (automated teller machine). 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) before you leave home and be sure to find out your daily withdrawal limit before you depart. Also keep in mind that many banks impose a fee every time a card is used at a different 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 $1.50). On top of this, the bank from which you withdraw cash may charge its own fee. To compare banks' ATM fees within the U.S., use www.bankrate.com. For international withdrawal fees, ask your bank.

There are numerous ATMs throughout Budapest that are connected to the Cirrus (tel. 800/424-7787; www.mastercard.com) and Plus (tel. 800/843-7587; www.visa.com) networks, as well as credit card accounts. Look for them at the airport or on the street in front of banks. You may withdraw money from your account in Hungarian forints only, at the official daily exchange rate. In our experience, the ATMs of OTP and Bankomat banks are the most convenient when it comes to walking around in town, and those of MKB are most convenient in shopping centers, while the ATMs of K&H banks are not always reliable.

You can also get cash advances on your credit card at an ATM. Keep in mind that credit card companies try to protect themselves from theft by limiting the funds someone can withdraw outside their home country, so call your credit card company before you leave home.

Small Change--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.

Traveler's Checks

Traveler's checks are something of an anachronism from the days before the ATM made cash accessible at any time. Traveler's checks used to be the only sound alternative to traveling with dangerously large amounts of cash. They were as reliable as currency, but, unlike cash, could be replaced if lost or stolen.

These days, traveler's checks are less necessary because most cities have 24-hour ATMs that allow you to withdraw small amounts of cash as needed. However, keep in mind that you will likely be charged an ATM withdrawal fee if the bank is not your own, so if you're withdrawing money every day, you might be better off with traveler's checks -- provided that you don't mind showing identification every time you want to cash one.

You can get traveler's checks at almost any bank. American Express offers denominations of $20, $50, $100, $500, and (for cardholders only) $1,000. You'll pay a service charge ranging from 1% to 4%. You can also get American Express traveler's checks over the phone by calling tel. 800/221-7282; Amex gold and platinum cardholders who use this number are exempt from the 1% fee.

Visa offers traveler's checks at Citibank locations nationwide, as well as at several other banks. The service charge ranges between 1.5% and 2%; checks come in denominations of $20, $50, $100, $500, and $1,000. Call tel. 800/732-1322 for information. AAA members can obtain Visa checks without a fee at most AAA offices or by calling tel. 866/339-3378. MasterCard also offers traveler's checks. Call tel. 800/223-9920 for a location near you.

If you choose to carry traveler's checks, be sure to 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.

Traveler's checks are accepted for exchange at most banks and exchange offices, including the American Express office between Vörösmarty tér and Deák tér in central Pest, at V. Deák Ferenc u. 10, 1052 Budapest (tel. 1/235-4330 or 1/235-4300; fax 1/267-2028). Many hotels (but not stores) also accept them as payment. You are likely to get a slightly lower exchange rate with traveler's checks than with cash, especially at exchange booths. Be aware that if you should wish to cash in your traveler's checks for dollars at the American Express office, you will end up losing 7% since they first exchange the checks for forints and then buy the forints back for dollars.

Credit Cards

Credit cards are a safe way to carry money; they provide a convenient record of all your expenses, and they generally offer good exchange rates. You can also withdraw cash advances from your credit cards at banks or ATMs, provided you know your PIN. If you've forgotten yours, or didn't even know you had one, call the number on the back of your credit card and ask the bank to send it to you. It usually takes 5 to 7 business days, though some banks will provide the number over the phone if you tell them your mother's maiden name or some other personal information. Your credit card company will likely charge a commission (1% or 2%) on every foreign purchase you make, but don't sweat this small stuff; for most purchases, you'll still get the best deal with credit cards when you factor in things like ATM fees and higher traveler's check exchange rates.

Credit and charge cards are widely accepted throughout Budapest. All first- and second-class hotels, many pensions, and all of the more expensive restaurants in Budapest accept at least one major card. Many -- but not all -- boutiques, art galleries, antiques stores, crystal and china stores, and trendy shops in the city center also accept credit and charge cards. Inexpensive restaurants and shops that cater more to locals than travelers generally do not. Credit cards are not accepted at marketplaces. Look for the applicable stickers in the window. Most shops require you to produce some additional form of ID, such as your passport or driver's license.