According to figures released by the Hong Kong Tourism Board, North Americans spend an average of HK$2,816 (US$366) per day on hotels and meals. While Hong Kong may seem expensive compared to many other Asian cities, bargains abound, especially when it comes to off-season hotel rates, meals at local Chinese restaurants, public transportation, and museum admissions. With a long history of tourism -- and shopping -- Hong Kong is well equipped to meet visitors' money demands.

Currency

The basic unit of currency is the Hong Kong dollar (HK$), which is divided into 100 cents. Since 1983, when negotiations between Britain and China concerning Hong Kong's future sent public confidence and the value of the Hong Kong dollar into a nose dive, the Hong Kong dollar has been officially pegged to the U.S. dollar at a rate of 7.8 (which means that US$1 equals HK$7.8), giving the Hong Kong currency greater stability.

Three banks, the Hongkong and Shanghai Banking Corporation (HSBC), the Bank of China, and the Standard Chartered Bank, all issue their own colorful notes, in denominations of HK$10, HK$20, HK$50, HK$100, HK$500, and HK$1,000. The government also issues a $10 note. As for coins, they're issued by the government in bronze for HK10¢, HK20¢, and HK50¢ pieces; in silver for HK$1, HK$2, and HK$5; and in nickel and bronze for HK$10.

At any rate, throughout the SAR, you'll see the dollar sign ("$"), which of course refers to Hong Kong dollars, not U.S. dollars. To prevent confusion, this guide identifies Hong Kong dollars with the symbol "HK$" (followed in parentheses by the U.S. dollar conversion). Although the official conversion rate is pegged at 7.8, you'll receive slightly less at banks, hotels, and currency exchange offices. During my last trip, I encountered exchange rates ranging from 7.75 (at a Hang Seng bank) to 7.02 (at a currency exchange office). Banks offer the best exchange rates but charge a commission (worth it if you're exchanging large amounts of money); American Express offices have slightly lower exchange rates but do not charge a commission on American Express traveler's checks. If possible, avoid changing money at hotels and currency exchange offices, which generally offer the worst rates.

For the matter of convenience, all conversions in this book are based on HK$7.70 to US$1 (and then rounded off to the nearest nickel on amounts less than US$10 and to the nearest dollar on amounts more than US$10). If the exchange rate changes drastically -- that is, it is no longer pegged to the U.S. dollar -- plan your budget accordingly.

ATMs

There are ATMs (automated teller machines) throughout Hong Kong, making a credit or debit card the most convenient way to obtain cash since it eliminates the hassle of exchanging money only during banking hours. Holders of MasterCard and Visa can use ATMs at the airport and various convenient locations around the city, including the Star Ferry concourses in Kowloon and Central, all major MTR (subway) stations, and major banks such as the Hongkong and Shanghai Banking Corporation (which has 24-hr. machines). American Express cardholders have access to Jetco ATM and can withdraw local currency or traveler's checks at the Express Cash machines at both American Express offices.

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. Before leaving home, be sure you know your personal identification number (PIN) and your daily withdrawal limit. However, 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. For international withdrawal fees, ask your bank.

Credit Cards

Credit cards are a safe way to carry money, provide a convenient record of all your expenses, and generally offer relatively good exchange rates. Although many of the smaller shops in Hong Kong will give better prices if you pay in cash with local currency, most shops accept international credit cards, although some of the smaller ones do not. Look for credit card signs displayed on the front door or near the cash register. Readily accepted credit cards include American Express, Visa, and MasterCard. Note, however, that shops have to pay an extra fee for transactions that take place with a credit card -- and they will try to pass on that expense to you. Keep this in mind if you're bargaining, and make sure the shopkeeper knows whether you're going to pay with cash or plastic. All major hotels and better restaurants accept credit cards, but budget restaurants often don't. If you do pay with a credit card, check to make sure that "HK" appears before the dollar sign given for the total amount. In addition, keep in mind that when you use your credit card abroad, most banks assess a 2% fee above the 1% fee charged by Visa or MasterCard or American Express for currency conversion on credit charges. But credit cards still may be the smartest way to go when you factor in things like exorbitant ATM fees and higher traveler's check exchange rates (and service fees).

Traveler's Checks

These days, traveler's checks are something of an anachronism, since Hong Kong has plenty of 24-hour ATMs. However, since you're likely to be charged an ATM withdrawal fee if the bank is not your own, if you wish to exchange money every day or two to avoid carrying around large amounts of cash, you might be better off with traveler's checks, which will be replaced if lost or stolen. Traveler's checks can be readily exchanged for Hong Kong dollars at banks, hotels, and currency-exchange offices (banks provide the most favorable rates). Traveler's checks also command a slightly better exchange rate than cash. Although Thomas Cook and other agencies can issue traveler's checks in Hong Kong currency, I don't think this offers any advantage. For one thing, Hong Kong shops, restaurants, and hotels are not as willing as their U.S. counterparts to accept traveler's checks for payment. Secondly, you can use leftover traveler's checks in U.S. dollars (or your own national currency) for future trips, but leftover traveler's checks in Hong Kong dollars must either be reconverted (not financially advantageous, because you lose money with each conversion) or saved for future trips to Hong Kong. You'll need your passport to exchange traveler's checks.