Things work differently across Europe, and you might encounter unexpected moments that leave you puzzled.
Therefore, I have compiled this list, packed with useful tips to help you navigate all money matters during your stay in Europe.
Don't walk into situations that you could have avoided. Learn from my guide about unexpected costs that you might encounter in Europe, and avoid all money Tourist scams with my instructions.
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Different Currencies
The most common currency in Europe is the Euro, but not every country has the Euro as the state currency.
Several countries that are part of the EU zone or the Schengen area (two different things, btw) use very different currencies.
For example, Denmark uses the Danish crown, Hungary has the Hungarian Forint, the Czech Republic has the Czech crown.
Other non-EU countries use independent currencies. This includes Switzerland with the Swiss Franc and Norway with the Norwegian Krone.
Keep in mind, the USD is not accepted anywhere as a legal tender in Europe.
Tip: Check my table of European country currencies.
VAT Refunds
The VAT is the Value Added Tax in Europe. This tax is included in the total price of goods and services all over Europe.
Each country gets to set a tax rate, and each calls it by a different name in their language. For example, look out for the IVA on Italian restaurant bills, in France the TVA in Austria and Germany the UST or MWST.
Some countries have higher tax rates than others. Hungary has one of the highest, with 28%, and Switzerland and Luxembourg have lower VAT tax rates. Most countries have a 20% average set VAT tax rate.
You can receive a VAT refund on your purchased products in specific shops, outlet malls, and airports across Europe. This only works if you are a non-EU resident!
Look out for VAT tax refund stickers, logos, and indications, and save all your purchase bills (e.g., airport shops). Ask for the VAT refund counter to get a good chunk of your money back.
At the Salzburg McArthur Glen Designer Outlet, situated next to the airport, you can walk over to the VAT refund office within the outlet, give them all your invoices, and they will refund you up to 15% VAT.
Credit and Debit Card Tips
Before you set off to Europe, check with your bank if your cards are geo-blocked. Let them know that you will be traveling across several countries in Europe so that you won't get flagged.
Especially some countries tend to get flagged more than others, such as Romania and Albania.
Adjust the card limit and bring more than just one card. We have had cards decline for no apparent reason, and we owe numerous European bank cards.
For example, our cards wouldn't work at Russian-owned Lukoil gas stations in Romania due to the current Russian sanctions.
Just as a side note, Europeans tend to pay with debit cards rather than credit cards. Credit cards are not that common, and banks had to come up with free incentives, such as travel insurance on platinum cards.
American Express cards are rarely accepted in Europe, but Visa and Mastercard are accepted everywhere.
Swiping cards isn't that common in Europe. Instead, card chip scanning with PINs is prevalent. Cards that require a signature might not work at certain machines.
Cash
Some areas across Central Europe still accept only cash. We have encountered cash-only situations in Austria, Germany, Northern Italy and isolated cases in Hungary.
Here are some examples: The parking lot at the Neuschwanstein castle in Germany is cash only. The street food in Berlin is cash-only, the Christmas market stalls in Austria are cash-only, and the sellers at the Budapest market halls will give you a discount if you pay cash.
Why? Because they avoid taxes or people feel strongly about a cash-only, you-can't-track-me, and I-deserve-privacy retail world.
Keep cash on you in those regions. If it's the Euro, keep €10, €20, €50, and €100 note bills only. Legal tender notes of €200 and €500 are extremely rarely accepted. Get coins because you will need them at every public restroom and parking lot machine.
Most banks can break down your notes; some banks might be rude, and they might not be willing to do so (I'm looking at you, VR Bank in Füssen, Germany).
Besides, every modern ATM in Europe gives you the option to choose your notes.
Tip: Avoid exchange offices at all costs! They offer inflated fees, even if they claim a 0% exchange fee.
ATMs
Avoid standalone ATMs, such as the Euronet ATMs. They have terrible conversion rates and fees.
Instead, head to a local bank and cash out money at the ATM connected to the bank. They are usually located on the pedestrian sidewalk area. International cards don't work on the ATMs that are located inside the bank.
Use the contactless card option wherever possible (only possible with a contactless card, so check with your bank). All ATMs offer several languages, and English is always one of them.
Just follow the instructions on the screen. Some ATMs in Europe may spit out a receipt, but most don't; it depends on the country.
Dynamic Currency Conversion
When you pay with your card at a terminal, you get the option to pay in your home currency (dynamic currency conversion) or in the local currency.
Always pick the local currency to get the better currency exchange rate. Pick the same option at ATMs if prompted.
Apple Pay and QR Code Payments
Apple Pay is gradually becoming more common across Europe, and if a payment terminal accepts contactless payment, it will accept Apple Pay.
QR codes, are generally not a thing in Europe. Only isolated places in Switzerland and Hungary may accept QR code payments.
QR Payments via Alipay or Unionpay are usually offered by luxury stores, such as LVMH and Dior at the La Samaritaine department store in Paris or at popular, well-known sights such as the Eagle's Nest in Germany.
Use International Online Banking Apps
The easiest way for you to pay abroad, in a local currency with reduced fees and better conversion options, is to get an international banking account.
These online international baking apps should be indispensable to you if you travel a lot across the world.
We use Wise (formerly TransferWise), but you can get Revolut too. Both are highly trusted and work seamlessly across a whole set of countries. Both, the Wise and Revolut headquarters are in London.
You can add money to your international bank account and convert it into any currency. Conversion rates are some of the lowest in the world as they offer real exchange rates.
Order a physical debit card with the app (or a virtual card instantly), and you are good to go and pay in all currencies across the world.
Out of experience, I can tell you that the TransferWise card has always been accepted, when our European bank debit cards would fail us in Europe. It has been a lifesaver at all points of sale and ATMs, and I highly recommend getting a card and account as a backup emergency travel option.
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