Pack your credit card, but use it carefully

No matter what happens to the dollar, you'll pay more for everything when you use your credit card abroad. Most major card issuers — including Bank of America, Chase, Citibank and MBNA — have tacked an extra 2 percent charge onto the 1 percent "cross border" fee imposed by Visa and MasterCard. (American Express charges 2 percent.)

Still, it pays to use plastic, not only for the convenience, but also for the more favorable wholesale rate on currency exchanges.

"If you get a retail exchange rate, you'll lose more than if you pay with plastic," says Ed Perkins, a syndicated travel columnist.

To make sure you get the best deal, check with your credit card issuer before you leave. If you carry a Capital One card, you're in luck. Capital One, which never added its own surcharge, recently stopped passing on the 1 percent fee charged by Visa and MasterCard.

Most credit unions haven't imposed surcharges on cards they issue.

Depending on your bank, you may have to pay 1 percent to 3.5 percent extra for debit card transactions. And getting cash out of an ATM could cost you an additional $1 to $5.

Again, call your bank and check its policy before your departure. Citibank card holders, for example, can withdraw cash at no cost from any Citibank branch in 46 countries. HSBC account holders get free transactions at ATMs in 68 countries. Bank of America participates in a global ATM alliance with five banks; withdrawals are free at any of the 14,000 machines operated by affiliated banks.

And Internet-only banks routinely refund ATM charges.

If you do have to pay, minimize your transactions — and your costs — by withdrawing as much cash as you're comfortable carrying. To avoid hefty interest charges, don't use your credit card for cash advances.

If using plastic abroad makes you uncomfortable for security reasons, you can still buy American Express traveler's checks, in nine currencies, at banks or American Express offices (or online for a $15 fee).

As an alternative, you can load up to $2,750 on an American Express Travelers Cheque Card. But that's an expensive option. The reloadable card costs $14.95, plus $5 each time you add money. You pay a 2 percent conversion fee, plus $2.50 to withdraw cash from an ATM.

Less pricey is the Visa TravelMoney card, which is available to members of the American Automobile Association for $4.95. There's a 1 percent conversion charge, plus a $2 fee for overseas ATM transactions.