The currency for Portugal is the Euro. In the ALGARVE region you can buy or exchange Euros very easily at Cambios (Bureaux de Change or Change Shops), hotels and even shops. Many banks no longer offer foreign exchange however. The best rates and commissions are normally found at the bureaux in larger towns. The worst rates by far are at the airports and in hotels. Avoid these unless there is absolutely no alternative. The best thing is to keep an eye out whilst shopping and always check the commission rates. You will not find much variation in the rates of exchange, as most change shops now tend to be owned by the same company.
The Cambios (Bureaux de Change or Change Shops) are open seven days a week in the main tourist areas.
You may need your passport to exchange cash (which is increasingly rare) but you will need it for travellers cheques. It is now virtually impossible to find anywhere that will change travellers cheques. Shops will not deal with them.
Be aware that the exchange rates obtained by changing currency are not good. There are always fees, hidden or otherwise, and Cambios do not exchange money at the most favourable commercial bank rates. The best option is usually to use an ATM or cashpoint to obtain Euros from your home bank account, or to use a non fee credit card where possible. To read more about fees associated with exchanging currency and using credit cards, take a look at specialist travel finance resources.
British visitors wishing to change cash should be aware that you will almost always get about 2% less in Portugal for British pounds than if you had changed your money before you left home.
It is not a good idea to carry large amounts of cash and it is an even worse idea to bring thousands in cash if your accommodation does not have a safe.
You can use your British debit card or credit card to withdraw cash as required (see below) and of course in many restaurants and supermarkets. Be aware that the Pingo Doce supermarket chain does not accept credit cards on purchases less than 20 Euros. Some small shops will not take cards for small purchases of less than 5 Euros. Most small bars will not accept cards at all.
Check what rate of exchange your bank or card issuer will give you. This is normally the commercial rate and better than the tourist rate. Then ask what the foreign transaction and currency conversion charges will be. There might be a small overall loss on the use of your cards, especially if making small cash withdrawals or purchases, but using cards is usually much more secure than relying on cash.
There are automated cashpoints (Multibanco) at most bank branches, at most of the larger supermarkets and in the main shopping areas of most towns. There are also machines at airports and major railway stations. They are free for most transactions. Look for the blue or green M signs.
Instructions are available in English if required. Note that the maximum cash for each withdrawal is 200 Euros. You can repeat the withdrawal several times per day (for Portuguese cards it is normally two times, for international cards it may be more). When you put your card in you will be prompted for your PIN. Do not be put off by the six asterisks indicating a six digit PIN. If your PIN is the more standard four digits just enter these and press the green CONTINUAR (continue) button. If you get a service unavailable message, it is most likely that the machine is out of cash, especially at weekends and on Monday mornings. The machine will have an icon with a cross through it, but this is not always obvious.
Visitors can also find Multibanco machines in every small town and even in many villages around Portugal. Visa, Mastercard and American Express cards are widely accepted in hotels, shops and restaurants. Petrol stations usually take credit cards and cash. Visitors from the USA should be aware that at night many petrol stations are automated and will only accept chip and PIN credit cards.
Caution: in some periods, after you insert your debit card, PIN and the amount desired, you might occasionally get a service not available message and no receipt or funds. Also, outside of Lisbon you may have some difficulty locating a place to exchange cash in foreign currencies. Many places will not accept credit cards. It is often a good idea to bring some Euros with you from home.
Banks do not open at weekends. Opening hours vary and are posted clearly outside, but usually banks will be open between 08:30 and 15:30. In smaller towns a bank may close for lunch. Most branches no longer offer a foreign exchange service.
If you can, book all of your hotels online from home and pay for them in advance in your local currency through a reputable booking site. That way you can reduce the fees from your credit card company or those charged when obtaining cash from ATM machines.