What is the best way to exchange your US dollars to Euros in Italy? The answer is simple: ATMs. Out of the several available options (exchange offices, traveler’s checks, credit card withdrawals, etc), the most convenient and practical way remains to use your debit card in one of the many Bancomat machines (that’s how ATMs are called in Italy).
Although both yours and the Italian bank may charge a little fee, in our experience a few Euros fee is well worth your piece of mind to avoid carrying along large amount of cash all the time.
That said, it’s always a good idea to keep a safe amount of cash for emergencies, possibly in a hidden money belt like Rick Steves’ silk one.

A year ago, we went back to Italy on vacation with our two kids. We arrived at the Venice airport with plenty of suitcases, strollers and backpacks. After claiming all our baggage, I looked for a cart. To my surprise, carts could only be unlocked from the rack using an Euro coin. But there was no coin dispenser available nor currency change bureau.
How do travelers from other countries get Euro coins before their trips? Banks only dispense paper notes.
While we managed eventually to get an unlocked cart, Francesca was puzzled by this episode and decided that during that trip she would have paid more attention to such details and took note of them. Before not long, we ended up with more than 80 topics that we thought were deserving some sort of explanation to first time travelers to Italy. And that was the time when we decided to create Italy from Inside.