TRAVEL INSIDER : How to Survive Europe on a Weak U.S. Dollar : Currency: Travelers are altering their spending habits with greenback’s value at a post-World War II low.

Americans returning from Europe this summer are yelping about the prices they had to pay for practically everything. The problem is the weak U.S. dollar, which at least temporarily has plunged to record post-World War II lows.

How bad is it? One Washington couple who spent a week in the Netherlands in July say they blanched when they saw the $15-per-person charge for a simple continental breakfast in their Amsterdam hotel. To save money, they skipped breakfast and bought sweet rolls each morning from a neighborhood bakery. But with coffee, the price still came to about $5 each. In the Dutch countryside, the rate for their modest bed and breakfast inn came to $100 a night.

Another tourist who visited Paris earlier this summer says she also paid anywhere from $5 to $10 for coffee and a croissant for breakfast at a sidewalk cafe. “And it was usually closer to $10.” A glass of mineral water was $3. She had hoped for good buys on French perfume, but found a bottle of her favorite fragrance was more expensive in Paris than at home.

Cynthia Newman, president of Waters Travel Service in Washington, D.C., spent two weeks with her family in Northern Italy, Switzerland and France in late May and June. She reports that in Italy “it’s very hard to go to a good restaurant and get dinner for less than $100 a person.”

Some of Newman’s clients planning a European trip were stunned to learn the costs of such services as hiring an individual car and driver, which can come to $400-$500 a day.

Otto Ruesch, who keeps an eye on the status of the dollar as head of Ruesch International Monetary Services of Washington, a money exchange firm, says that as he planned a European trip this summer, “I (was) horrified at the prices.”

Newman and her colleagues have been getting lots of feedback from Europe-bound travelers worried about the costs they may be facing, and yet, she says, “Most of them are going anyway. I think they are aware that the dollar isn’t all that great before they go.”

Typically, however, travelers are choosing not to stay in as fancy a hotel as they might prefer when Newman tells them what it is going to cost. Or they may give up on the idea of a private car and driver and do the driving themselves in a much cheaper rental. And in Italy, she says, she discovered that a pizza for dinner costs a lot less than those a meal in a top restaurant.

The party pooper in America’s fun abroad is the dollar, which failed to perk up as had been anticipated earlier this year. It’s been laid low by the U.S. economy’s continuing poor performance and the gap between high interest rates being paid in Germany and low rates in the United States.

Currently, the dollar is worth 18% less than it was as recently as April, according to Michael P. Wallace, head trader for Ruesch International. This means that a hotel room in England that cost $100 a night in April is now $118 a night. For a seven-night stay, that’s an extra $126 added to the hotel bill, not including taxes.

Compared to this time last summer, says Wallace, the dollar has dropped about 26% against the German mark, the European currency by which the dollar customarily is measured.

On Aug. 24, a few days after President Bush’s nomination acceptance speech at the Republican National Convention, the dollar hit a post-World War II low in value of 1.39 German marks. According to Wallace, the drop was triggered by a lack of confidence in Bush’s U.S. economic policies on the part of the overseas financial sector.

Another statistic is even more telling. In the big heyday of the dollar in the mid-’80s, when Americans flocked to Europe in record numbers because the Old World was such a great bargain, a traveler could buy a British pound for not much more than $1--at least at one point. In recent weeks, a British pound has cost about $2. Essentially, a dollar now buys half as much as it did in those euphoric summers.

The U.S. economy probably will remain uncertain until after the presidential election in November, which will limit any surge in the dollar’s strength in the near future, predicts Wallace.

Since the dollar can be expected to rise and fall in small increments until then, his firm advises travelers bound for Europe to carry both U.S.-dollar traveler’s checks and a lesser amount of traveler’s checks in the currency of the country they are visiting--if available. Ruesch sells Thomas Cook traveler’s checks in Swiss francs, German marks, French francs, British pounds, Dutch guilders and Spanish pesetas.

If the dollar is on the upswing, use the dollar checks, he says; if the dollar takes a nose dive, switch to the foreign checks.

Negotiating the hazards of currency exchange abroad can be tricky, and even seasoned travelers get tripped occasionally. But getting money abroad--especially in Europe and Asia--is becoming easier, and here are guidelines to follow that can keep you from making costly mistakes:

* Traveler’s checks: They remain the most practical and safest way to pay for incidental travel expenses abroad. If you lose them, the issuing company will replace them promptly. You may have to pay a small fee to purchase the checks, although some banks provide traveler’s checks for their depositors at no extra cost.

The problem with traveler’s checks is that exchanging them for foreign currency can be expensive if you are not alert. The daily exchange rates offered by banks, exchange houses and hotels often vary, and each may charge a fee that also can vary substantially. Look for an exchange source--often a bank--that a favorable exchange rate and low fee. I have found favorable rates, with no extra fee charged, when cashing American Express checks at an American Express office.

Do not expect small inns, restaurants and shops to cash U.S.-dollar traveler’s checks. Most places of business will accept checks in the currency of their country, and there is no exchange fee. However, remember to use all your foreign-currency checks abroad, or you will have to pay to change them back to dollars at home.

* Foreign currency: It’s generally considered wise to take at least $50 in the currency of the country to which you are headed. This should be enough to pay for transportation from the airport into town, and you can avoid the long line at the exchange window at the airport. Airport exchange offices tend to offer less-favorable exchange rates than banks.

* U.S. currency: I have never needed U.S. dollars in many trips to Europe. But I always take a few bucks along to pay for drinks and a movie on the plane, and for taxi fare home.

* Credit cards: American Express, Visa and MasterCard are widely accepted throughout much of Western Europe and in some Eastern European countries. They are a handy way to pay for big-ticket items such as hotels, restaurant meals and gifts. Another advantage is that the commercial or wholesale exchange rate the card companies use to bill you in dollars is better than the rate you get exchanging traveler’s checks.

But there are limitations to credit cards. As in the United States, some business establishments don’t accept them, and you will be expected to pay in cash. Also, the exchange rate used is based on the day the credit-card company receives the charge and not the day you make the purchase. If there’s a delay in processing, the dollar could weaken substantially in the interim, and you could end up paying more than you expected. On the other hand, if the dollar surged, you would pay less. Use credit cards for large items when the dollar is stable or strengthening.

* Automatic teller machines: The Cirrus and Plus networks are constantly adding more machines in Europe, Asia and elsewhere abroad. But don’t count on finding them everywhere, even in many big cities of Europe, because they aren’t there yet.

With an ATM, you can use your local bank card to obtain money abroad from your bank account much as you would in the United States. However, the bills the machine dispenses are in the currency of the country in which the ATM is located. An advantage of ATMs is that the exchange rate they offer is also the preferential commercial or wholesale rate. Also, ATMs generally are open 24 hours a day, which is not true of banks and exchange houses. However, a fee of 25 cents to $2 or more per transaction may be charged, depending on the bank that issued your card.

Before leaving home, check with your bank to determine if your PIN (personal identification number) is valid for use abroad, where ATMs you can use are located and what the transaction cost is. Also, find out if there is a daily limit on how much money you can take from your account.

Christopher Reynolds is on assignment this week.