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Getting your hands on local currency in Israel is easy, and there are several ways of doing it:
The first place you will have an opportunity to change money is in the luggage area of the airport. If you miss that there are additional opportunities in the arrival hall.
1) Change places are located all over the place, especially on the main streets of main cities. They are also located in all of the larger shopping malls. It is also possible to exchange money in post offices. The biggest negative of using post offices is there is freqently a long line. It can take upwards of an hour at times!
2) You can also withdraw cash directly from an ATM. Most ATMs accepts foreign cards and automatically switch to English on the instructions screen when they recognize a foreign card. At some ATMs (called "caspomats" in Israel), you can even withdraw dollars and other foreign currencies. Most ATMs do not charge a fee. However, your bank may charge both a conversion fee and commission. It is important to verify what these are while still in your home country. It is also important to let your bank know you will be using the card overseas so they don't prevent transactions for fear of fraud.
3) While banks do change money most give significantly lower rates than ATMs or money changers. This is not a recommended method of obtaining currency.
DO NOT BRING TRAVELERS CHECKS. Next to impossible to use and banks charge the highest transaction fee on these. In fact, many money changers will not change them at all