The only places that we found that would accept credit cards were the big hotels and some places in stone town (not all though).
Upon arrival into Tanzania, we switched a lot of our currency into Shillings. But then the first hotel would only accept USD. (No problem they said, go one hour to a local currency exchange, or we can exchange it back to dollars for a horrible rate). We chose the horrible rate.
We actually had some USD, but no place in Zanzibar will accept the USD small head bills (only the newer version of the Dollar). The same hotel had different currency charges for each thing. Their room rates were in dollars and their food/drinks were in Shillings. No idea. hakuna matata, i guess.
There are actually a few ATMs in Zanzibar, but all of them are around Stone Town (none at the airport for instance). But the first day we went to get cash, there was a power outage on the island, so no ATM's worked.
We managed ok in the end, but it was kinda annoying. Apparently their credit cards and ATM machines are new, so hopefully it'll keep getting better.
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