Cold hard cash

Money talks, and euros, pounds, yen, francs, pesos, etc. speak the local lingo a lot better than do dollars, credit cards, or traveler's checks.

Euro bills.First of all, transactions in local currency are quicker, and they will certainly endear you to the merchant you're dealing with, since he knows he won’t have to kick a big chunk of his profits back to the folks at Visa or American Express.

Don't think that doesn't count for something. Though cash vs. credit prices at U.S. gas pumps may be largely a relic of the past, you can bet your last Euro-cent that you will often find a surprise discount if you pay in cash (like 5%) on such big ticket items as hotel rooms.

In fact, whenever you're discussing price on something sizeable—like your hotel room or that leather jacket and purse at the market stall—and he names his price, ask "And if I pay cash?" You'll be surprised how often the number comes down a bit, especially for longer stays or larger purchases. (Note: don't try this for a single orange from the fruit vendor, or the three-pack of undies at a department store.)
Dealing with dollars
Just because lcoal curency speaks louder than dollars doesn't mean you shouldn't be bilingual. It’s wise to carry some emergency dollars--a couple of $50s and maybe a $100 or two.

On my first trip to Poland I discovered that banks wouldn't change traveler's checks (this was back in 1994; much has changed), and Krakow's American Express office was way the heck on the outskirts of town and rarely open.

Luckily, my companion had $50 stashed away. We found an exchange booth that gladly gave us the planet's worst exchange rate—along with a six-inch stack of Polish zloty, enough to pay for our hotel and tide us over until AMEX opened the next day.

Heck, sometimes even the waiter at dinner will come to your table at the end of the meal, tot up the bill in his head, and then ask "cash or Visa?" The correct answer to that is always "Cash" because it means you get a discount.

Why is this? Well, like I said, they don't have to factor into the final price that kickback to the credit card company.

Plus—though you didn't hear it from me and of course I’d in no way encourage local merchants to break the law or imply that any do so—when you pay cash, they are free to enter any old amount they want on the ledger books.

That way, when Oncle Samuel comes looking for the government's cut at tax time, your hotelier's books can show that the inn took a loss on the room that night—and the owner gets to pocket the difference.

Getting your hands on some local cash

Euro coins.So how do you get your Euro on? If possible, always get cash from an ATM —though you can also cash traveler's checks and get credit card cash advances, both end up costing more.

Some folks also buy some local currency from their bank before leaving home. I used to try this tactic, but found that there's almost always an ATM or two at any airport or train station when I arrive and it is unnecessary.

The reason I stopped getting starter cash in local currencies is that:

Don't rely 100% on ATMs
Sometimes, you will find airport ATMs evilly disposed to your card. I'd say this happens to me on only about one trip every twenty.

On a 2003 trip to Ireland and a 2011 trip to New Zealand, none of the bank machines in the arrivals terminals worked for me. Since on both trips I was picking up a pre-paid car rental, I just drove along until I spotted a bank that did work.

I also had trouble finding amenable ATMs throughout Egypt in 2004, but I did get to know downtown Cairo a whole lot better as I wandered the streets until I found a bank machine that accepted my card.

You get a truly crummy exchange rate, paying way to much on the dollar plus a sizeable bank fee just to get $30 worth of European currency, and
With the introduction of the Euro, I usually have some cash left over from last trip anyway.

I realize (b) only works for frequent travelers, but there you go.

If you do decide to carry along some primer cash, know that you can usually get it only from major, downtown banks, though your local branch might be able to order it from a larger branch (give them plenty of notice).

It doesn’t have to be your own bank, either. Any old financial institution will sell you euros, British pounds, or yen (other currencies are sometimes harder to come by)—though some will waive certain fees only for their own customers.