Cash Travel with an amount of cash you can afford to lose. You'll want dollars for emergencies and foreign currency for incidental expenses, like paying a cabbie. Carry small denominations; store the rest in a hotel safe.

The best way to obtain currency overseas is from an ATM. (Some international ATMs only accept four-digit PINs; if yours is longer, change it before leaving.) Most ATMs use a wholesale interbank exchange rate, which is 2 to 7 percent better than what you'd get by converting American dollars at an airport, an exchange counter, or even a bank.

The downside? The increasingly common fees imposed by both your bank and the ATM. Wells Fargo cardholders, for example, pay $3 for each visit to a cash machine overseas, in addition to the local bank's fee. If you plan to rely on ATMs abroad, shop around for banks with minimal charges (typically, you can find this information on bank Web sites). Bank of America customers, for instance, can avoid all access fees by using ATMs at Barclays, BNP Paribas, and Deutsche Bank.

Can't avoid fees? Estimate expenses and make a single withdrawal. Just keep the money safe and spend it before you return so you don't have to change it back to dollars.

Credit cards Credit card purchases are also changed at the interbank rate. But beware: Credit card companies levy fees for purchases made abroad. Their rates vary, so do your homework. American Express charges 2 percent of the transaction. Visa and MasterCard charge 1 percent to member financial institutions, which can opt to absorb or pass on costs to cardholders—and tack on yet another charge. If you use Citibank's American AAdvantage MasterCard, for example, you'll fork over about 3 percent in fees (ouch!).