cash, travelers checks or credit card

Do NOT use travelers checks! Few merchants in Europe will accept them, banks can be reluctant to cash them, and the fees associated with them are sizeable.

Use credit cards for major purchases and get cash from ATMs for everything else. Be sure to notify your card providers when you will be in Europe. If you don't, a computer may freeze your cards for what it suspects might be fraudulent use.

Read Rick Steves' Money 101 for a detailed discussion of this topic.

You may want to consider getting a different credit card. See a previous discussion at:

http://www.ricksteves.com/graffiti/helpline/index.cfm/rurl/topic/39547/best-credit-card-with-best-rewards.html

Think about using cash. Some banks don't charge anything at all for ATM withdrawals; they give you the straight Interbank rate. I'm not sure that you can get that for credit cards, but smaller, local banks, without foreign currency operations, pay the Network 1% and pass it on to you, along with a few dollars (less than ½%) for out of network ATMs. I pay cash for almost everything. Small mom & pop B&Bs don't usually take plastic. If you go to bigger hotels that do, you'll pay much more than the extra cost to get cash.

Try to get a CC from a smaller, local bank that only charges 1% for foreign POS credit card transactions. Shop around.

Find Austrian partners of your bank(s). E.g. with a BoA account ATM card you can withdraw cash at any Deutsche Bank in Germany and Austria - free of charge. Hardly anybody accepts travelers cheques other than banks who probably add a handling charge to it. If you want to be on the save side upon arrival in Europe get €50 in cash Statesside (about $75) which is sufficient for a taxi ride or public transport and snacks, beverages for your first day...

You can even skip obtaining any Euro before you leave home and simply make an ATM withdrawal at the airport upon arrival. Take out several hundred Euro, and you’ll be set for a few days (and can pay for your transport into the city). When you notify your bank you’ll be travelling in Europe with your card, you can also ask them to raise your daily ATM withdrawal limit.

Wells Fargo has the lowest "fee" (exchange rate discount) for cash, average 5% over the interbank rate, I have found. Today's rate for €50 is $76.80 (vs $73.23 for the international, no discount, rate from Oanda) so, if you can get to a main branch of WF, it would cost you $3.57 vs 0% discount at an ATM over there, $1.31 vs the standard 3% for ATM withdrawal. If you have them mail it, it costs, last time I checked, $8, $11.57 total. You can probably find a bank in Indy that will give you a better rate than that over the counter.

So, having Euro when you arrive is cheap insurance. I have heard tales of people arriving in Rome when the ATM "loaders" were on strike, and there was no money in the ATMs. I have been in a small town in Germany when the Internet lines were down and the ATMs didn't work. I arrived in Frankfurt five years ago with three ATM cards. For technical reasons, the first two didn't work. I was relieved when the third one worked, but not too worried since I had €200 on me left over from my last trip.

Check your local credit union for a better deal on ATM cards. Mine charges nothing for using my ATM card to make withdrawals abroad.

Thanks to all for the tips! Very helpful info. We're on our way tomorrow! Happy travels to all.

I use mostly cash when I go.

I bring at least $300 worth of Euro with me from the U.S. to get me started (and... don't forget to get a few Euro coins from a traveler friend... never know when your first stop may need to be a coin operated ticket machine... or a coin op toilet...)

I get local currency from ATM machines, getting 2-3 days worth of cash at a time.

I carry a few hundred dollars U.S. as a backup - so I can exchange bills if all the ATMs hide...

I use my credit card only for higher dollar purchases where exchanging a bunch of cash is awkward. My banks do not charge me a transaction fee (USAA, MBNA).