How much in Euro vs Credit cards

Although you may occasionally encounter a shop or market stall with a "cash only" sign, cash is usually needed only for very small purchases/payments such as pay toilets, church donation boxes, some church-entry fees (I encountered two Venetian churches that couldn't take credit cards this month) and light-activation boxes in churches. My most common cash payments were for tips (more modest than in the US) in the many restaurants that didn't allow tips to be added to a credit card payment. In addition, many Italian hotels require the local city tax (a few euros per person per night) to be paid in cash. I've also on occasion made small purchases (an ice cream cone, a cold soda from a little corner market) in cash, but on my most recent trip I tended to use my credit card more often in those situations.

You should be able to get the euros you'll need from a bancomat in Italy. It might not be so easy to find one close to your lodgings outside Pisa, so it would be smart to have a little cash when you head there. If you are uncomfortable not obtaining some euros before your trip, don't overdo it. You'll pay fee and/or get a poor exchange rate in the US, and if you have leftover euros you don't want to keep for a future trip, you'll pay again to covert them to dollars (probably cheaper in Italy before you return to the US). Even if all your lodgings require the city tax to be paid in cash, that probably won't be much more than 100 euros for two adults (if that--it varies by city and class of lodging).

I recommend reading the "Money" section of the Travel Tips on this website, which you can find here:

Rick's Money tips

Italy is a nearly cashless society. Use debit cards to withdraw cash at Bancomat machines attached to banks as needed. Visa cards are accepted just about everywhere. Before Covid I would like to arrive with about €100 in hand and usually I only needed to withdraw another €50 or €100 during trip. It is not a good idea to carry large amounts of cash - pickpockets are at work, unfortunately. The days of changing dollars for European currency are long gone. Credit cards are used for hotels, train tickets, admission tickets, all meals etc. The only time I’d use cash would be for a coffee on the run or using a public bathroom (a Euro coin or two to the attendant), the occasional small purchase at a market or convenience store etc. Do make sure to get some Euro coins when you get to Italy, your hotel will probably help you out with that.

You will need cash for all of the above, plus the occasional (many) taxi driver who will tell you that their POS machine broke a couple of hours ago they haven’t had a chance to fix it. It is of course a lie they tell you. The real reason is that taxi drivers are notorious tax dodgers, and by taking cash payments they can underreport their income in the tax return and not be traced by the tax authorities through the bank transactions. Before boarding a taxi make it clear you have only cards and won’t be able to pay by cash. That is especially important in the transfer from the airport to the hotel since the fixed fare from Rome to the city center is a whopping 55€.

Other than that you will need or want cash only for small purchases like those mentioned above. Regarding the cities’ tourist tax (“Imposta di Soggiorno”) some hotels require payment in cash (not only in Italy I must say, since I had the same request by hotels in Portugal) because they don’t want to pay the 2% bank card fee on that amount which they must give the City in full and the law prevents them from charging a surcharge for card use. It’s a stupid thing to do since they could easily increase the price of the room to cover the amount the credit card would charge, but not all hotels have figured that out so they ask for cash. The amount of tourist tax varies depending on City and stars the hotel has. Florence has the highest in the country with 6€ per person per night in a 3 star hotel, 7€ in a 4 star, 8€ in a 5 star. I’ve never encountered a 4 star hotel that asked me for cash payment for the tourist tax, they all accepted to use the card, but it’s possible that some budget hotel may still ask for cash. When the tax was first introduced there was confusion on the VAT (value added tax) ramifications of including this tax in the bill, but the law was clarified so that is no longer a concern.
But you don’t need to take cash with you, just use the ATM machines like you would do at home. I wouldn’t keep more than 50 or 100€ with me in my wallet. When you withdraw cash from the ATM make sure you go to the ones attached to banks which are part of the Bancomat network. There are also lots of machines in tourist areas that say ATM and which are part of the Euronet network. Euronet machines charge exorbitant fees and give lousy exchange rates. Use Bancomat machines at banks

Don’t carry more cash than you are willing to lose. If you want to arrive with some cash, you can buy some from your bank. You may have to order in advance and there may be a fee and a bad exchange rate. But some are more comfortable arriving with cash. Otherwise, use a Bancomat as described. Decline the conversion to US dollars when prompted.

Some people fuss about atm fees. I jumped through lots of hoops to open an account with Charles Schwab that refunds atm fees. Over three weeks and several atm withdrawals, the fees totaled less than $10. Don’t worry about it.

When using your Visa card, they typically ask if you want to pay in dollars or euros. Always choose euros. And use a card that has no foreign transaction fees. If you don’t have one, there’s time to get one. Always have a backup card (associated with a different account) hidden separately from your daily credit card in case of theft.

Interesting article on the subject in Italy. Not what one would suspect: https://www.lemonde.fr/en/economy/article/2022/12/11/in-italy-the-controversial-return-of-cash-payments_6007379_19.html#:~:text=While%20the%20report%20highlighted%20the,means%20of%20payment%20since%202012.

The article on LeMonde is a bit outdated.
Currently in Italy all vendors providing goods or services (from a shop owner to a dentist) must accept digital payments regardless of the transaction amount. The 60€ limit, under which a vendor could refuse a digital payment, was eliminated in 2023, therefore even if you want to pay 1.20€ for a cup of espresso with a credit card, they cannot refuse and ask for cash payment only. I believe Italy is the only EU country that has such draconian law. Of course some vendors (namely taxi drivers) often use the excuse that their POS machine is “momentarily” not getting any cell signal and therefore they cannot accept card payments.

The maximum limit of 5,000€ for a cash payment is still in place (it was lower previously and that is why the current government has been criticized for favoring tax evasion). Payments in cash from foreign citizens not resident in Italy can be as high as 15,000€ provided the receiver notifies the tax authorities in advance. Violations are subject to a fine of 1,000€ for both payer and receiver, or 5,000€ fine if the cash transaction amount is over 250.000€

The current Italian limit is not particularly high by European standards. Only 8 countries of the 27 members of the EU have a lower limit than 5,000€. Nine of them, including Hungary, Germany, Austria, Netherlands, have no limit at all.

BTW, remember that if entering of exiting Italy with more than eur 10,000 in cash (an unlikely event for most persons), you must fill and deposit a form at custom. If found without the declaration, 40% of the amount exceeding 10,000 eur can be impounded.

I’ll just add that if you don’t currently use ApplePay or GooglePay on your phones, add your VISA cards to your phone’s wallet and use it at the grocery store/pharmacy/etc before you travel so you can get used to it. This is an easy way to pay! I used it all over Italy including for 3€ gelato.

If you feel like you have to take Euro with you, probably not more than 50€ per person and you will come home with some as seed money for your next trip.