Currency & Exchange
From using euros and credit cards to finding the best ways to get cash, knowing how money works in Italy will help you avoid unnecessary fees and travel with confidence.
From using euros and credit cards to finding the best ways to get cash, knowing how money works in Italy will help you avoid unnecessary fees and travel with confidence.
Italy has been using the euro currency (€ is the symbol and EUR is the code) since 1999, when the first 11 nations of the European Union adopted a single currency. There are currently 20 countries using the euro, a group that's called the eurozone.
One euro is made up of 100 cents, and there are coins for 1, 2, 5, 10, 20 and 50 cents. Banknotes come in denominations of €5, €10, €20, €50, €100, €200 and €500, though the latter two are rare. There are also euro coins for €1 and €2. Each note is a different color for easy identification, and the €1-2 euro coins are easily distinguished from the euro cents by a ring of contrasting color around the outside of the coin. The €1 coin is silver in the center with a gold-colored ring, and the €2 coin is the opposite.
The design of euro coins across the eurozone are identical in some ways, but the national origins of each coin can be identified by part of its design. One side of each coin has a design chosen by the country where it came from.
Find out the current exchange rate for the euro at xe.com.
The most commonly accepted cards in Italy are Visa and MasterCard, with American Express a fairly distant third. You may find places that take Diners Club or Discover, but those are much more rare.
It's a very good idea to call your credit card banks in advance of your trip to find out if there's anything you need to do to make sure your cards are authorized to be used in Italy. You should also ask what their fees are for international usage - ideally, you want a card that charges no foreign transaction fee at all.
Paying for things with credit cards in Italy will give you the best exchange rate, but if you're asked by a card reader whether you want the charge to be in your home currency rather than the euro, be sure to refuse that option. It's called dynamic conversion, and banks charge a hefty fee for it.
There are still lots of places in Italy that don't accept credit cards, or require a minimum purchase amount to do so, which means carrying cash is not just a good idea - it's a must. You'll find bank machines (bancomat in Italian) all over cities, and there are usually a few even in smaller towns.
Before leaving home, contact your bank to make sure your debit card will work in Italy. If it does, the other questions to ask are:
Unlike at home, where you may only withdraw what you need for a day or two, you should plan on visiting ATMs as infrequently as possible in Italy because of the fees associated with each withdrawal. This means taking out a greater quantity of cash than you might be accustomed to. Keep only what you'll use for the day in your wallet and store the rest in a money belt or hotel safe.
Credit cards can also be used to withdraw money from an ATM, but the fees are usually even higher, so this is usually best reserved for emergencies only.
Banks in Italy don't often exchange foreign cash for euros unless you have an account with that bank. Some banks have international partnerships with banks around the world. If your home bank is one of them, find out if they have a partnership with any banks in Italy that would mean you could exchange cash there.
American Express offices are not as common as they once were, but if you have an American Express card and there's an office nearby, that's a great option.
Banks in Italy are usually only open Monday-Friday (sometimes on Saturday mornings), from 8:30-9AM to 4-5PM, though they may close for an hour or so around lunchtime. There's also a long list of holidays throughout the year during which banks are closed, including Italy-specific holidays you may not have on your internal calendar (including the Festa della Liberazione on April 25 and Festa della Repubblica on June 2).
You'll be presented with numerous boldly advertised exchange counters at every airport and most big train stations in Italy, as well as in some popular tourist areas in some cities, but you should avoid them if possible. These typically have some of the worst exchange rates, and they'll usually charge a fee on top of that.
If you must use one, remember that they require identification (your passport will do nicely). You can find out the current exchange rate for the euro at xe.com to compare it against what a currency exchange bureau says you'll get in the exchange.
Traveler's checks have all but gone the way of the dinosaur when it comes to travel necessities, especially since most travelers now carry debit cards. If you must get traveler's checks for your Italy trip, keep in mind that you can't spend them like cash - you have to exchange them first at a bank or currency exchange bureau (where you'll be charged a fee, even if the traveler's checks are in euros). Bring your passport with you, as you'll need identification to complete the transaction.
Value-added taxes (VAT) are akin to sales taxes, and they're ubiquitous in Europe, including in Italy. Depending on what you're buying, the VAT rate can be as much as 22%. When you buy something in Italy and you're not an EU resident, you can get a refund on a portion of the VAT charges - if you obtain and submit the right paperwork before you leave the country.
The Italian VAT refund process is called Online Tax Refund at Exit: Light Lane Optimization, or OTELLO. Some of the requirements to qualify for a refund are that you must spend at least €70 at each place where you purchase goods, you must get a special receipt that includes your passport information (bring a photocopy out and about with you and leave the original in the hotel safe) and the items purchased must be for personal use only. This isn't just the cash register receipt, either. You'll have to ask the shopkeeper for a special tax exemption form and fill it out before you leave the shop.
You need to submit these forms at your departure airport before you leave the country (or, if you're traveling to another eurozone country, at your EU exit point). Some shops have official agreements established with a "tax-free" company (such as Global Blue or Planet), in which case you should locate the desk of that company at Milan Malpensa, Rome Fiumicino, Venice Marco Polo or Florence Peretola airports. If your departure airport doesn't have the appropriate tax-free company desk, or if your purchases weren't made at a participating shop, you'll need to find a Customs Office (Agenzia delle Dogane in Italian) desk. In either case, you'll also need to present your passport and departure ticket to submit your paperwork, and you may be asked to produce your purchases for inspection.
Details of the procedure are outlined on this Italian Ministry of Finance page. There's a handy VAT refund calculator on this site, too, so you can gauge whether the process is worth it to you.
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