Thanks to ATMs, getting cash all over Peru is about as simple, easy, and cheap as it is in your own country. U.S. banks usually charge a US$3 fee per transaction, but the benefits of using bank cards outweigh the risk of carrying loads of cash. Banks usually charge hefty commissions for cashing travelers checks, but a modest supply is nice to have along in case your bank cards are stolen (check with your bank before you go to find out if it is even possible to replace your bank cards overseas). Credit cards are useful and it’s increasingly common to use them to purchase almost everything in big cities. Throughout the country Visa cards are easiest to use in restaurants and hotels, but also ask if establishments accept MasterCard or American Express. If your bank cards get stolen, and you spend all your travelers checks, you can always get a cash withdrawal off your credit card. Bottom line: Rely on your ATM card and bring some travelers checks and a credit card or two.
The official Peruvian currency is the nuevo sol (S/.), which for the last several years has hovered around 2.80 soles per US$1. Peruvian bills come in denominations of 10, 20, 50, 100, and 200 soles. The sol is divided into 100 smaller units, called céntimos, which come in coins of 1, 5, 10, 20, and 50 céntimos. There are also heavier coins for 1, 2, and 5 soles. Beware that 2- and 5-sol coins look very much alike, the only difference being the size (5-sol coins are slightly bigger). Currency calculations with today’s rate can be made with online currency converters such as XE.Com (www.xe.com ). Exchange rates are commonly listed on signs in front of banks and exchange houses and are also posted in daily newspapers.
The U.S. dollar, despite being the most common foreign currency to exchange, is far from being the strongest. Nowadays, it is fairly easy to exchange euros in most Peruvian towns and other currencies only in big cities.
Inspect your dollar bills carefully before leaving your country and treat them with care. Even slight rips will cause them to be rejected everywhere you go. In the best case, you might be able to cash a tattered bill on the street for a lower rate, but regardless, US$50 and US$100 bills are difficult to exchange. There are a few banks and money exchange houses in almost all big airports in Peru. Generally speaking, most Peruvians exchange their dollars at exchange houses, called casas de cambio, because they give a slightly higher rate than banks. These are usually clustered around the Plaza de Armas or main commercial streets in every city and town. In major cities, representatives of these casas de cambio will even come to your hotel to exchange money, depending on the amount.
In major cities, there are also money changers on the street who wear colored vests and an ID card. These people are generally safe and honest, though they will sometimes take advantage of you if you don’t know the daily exchange rate. Never change money with unlicensed money changers, who will sometimes have rigged calculators. Whenever you change money on the street, check the amount with your own calculator.
When you change money, check each bill carefully to see that it is not counterfeit. Hand back all bills that have slight rips, have been repaired with tape, or have other imperfections. Insist on cash in 20- and 50-soles bills. Unless you are at a supermarket or a restaurant, the 100-soles bills are hard to change and you will end up waiting as someone runs across the street to find change for you.
In recent times the use of credit cards has expanded to almost all big cities in Peru for even the smallest purchases. Be sure you ask, though. Not all cards are accepted everywhere. By far, the best card to have in Peru is Visa or MasterCard, though Diners Club and to a lesser extent American Express are increasingly accepted. Apart from their in-country toll-free numbers, most credit cards list a number you can call collect from overseas. Carry this number in a safe place or email it to yourself so that you have it in an emergency.
For Visa cards, you can also look online at www.visa.com  or call collect in the United States to 410/902-8022. For MasterCard, see www.mastercard.com  or call its collect, 24-hour emergency number in the United States at 636/722-7111. For American Express, see www.americanexpress.com  or call the company in the U.S. at 336/393-1111. To contact Diners Club (www.dinersclub.com ) while in Peru call 01/615-1111.
Bargaining is common practice in Peru, especially at markets, and shops, and to a minor extent in mid-budget hotels. Bargaining can be fun, but don’t go overboard. Have a good sense of what an item should cost beforehand. Ask them how much it costs “¿Cuánto cuesta?” and then offer 20 percent less, depending on how outlandish the asking price is. Usually vendors and shoppers meet somewhere in the middle. Some people bargain ruthlessly and pretend to walk out the door to get the best deal. On the other hand, a smile, humor, and some friendly conversation works better.
If you have a reasonable price, accept it graciously. There is nothing worse than seeing a gringo bargaining a campesino into the ground over a pair of woven mittens. We might go and have a coffee with the money we save, while the vendor might use it to buy shoes for his daughter!
Student discounts are ubiquitous in Peru, so get an ISIC card (International Student Identity Card) if you can, and flash it wherever you go. If you are in Peru for a week or two it is usually possible to make up the money you spent on that South American Explorers Club membership just in the discounts you are entitled to at hotels, restaurants, and agencies—the hardest part is remembering to ask for it before you pay. The SAE in Lima  and Cusco  has lists of establishments that accept their discounts.
Tipping is a great way for foreign travelers to get money to the people who need it the most—the guides, waiters, hotel staff, drivers, porters, burro drivers, and other front-line workers of the tourism industry. Though not required, even the smallest tip is immensely appreciated. It’s also a good way of letting people know they are doing a great job. Tipping is an ethic that varies from person to person.
In restaurants a tip of 10 percent is ideal but not enforced. Try to give the tip to the waiter personally, especially when the table is outdoors or you pay with a credit card. It is not necessary to tip taxi drivers in Peru, but you should give a few soles to anyone who helps you carry your bags, including hotel staff or an airport shuttle driver. Assuming you were pleased with their service, you should tip guides, porters, and mule drivers at least one day’s wage for every week worked. If they did a great job, tip more. Tipping in U.S. dollars or other foreign currency is not necessarily a good deal for these people, especially if they live away from big cities where they can’t exchange the money. Tip in local currency.