US dollars?

http://www.cardhub.com/credit-cards/foreign-transaction-fee/
Most banks charge a foreign transaction fee of 1% to 3% of the purchase price, which includes the 1% charge from Visa or MasterCard that most banks pass on to the consumer. It pays to shop around for the best deal including cards with no ATM charges. Etrade for example 1% FTF and 0 atm fee and it seems like it works everywhere as long as you keep them apprised of your whereabouts.

Panama is a US dollar currency country and the only difference you will see is in the coins. They seem to like to use dollar coins like the Susan B Anthony or Sacajawea which never really caught on in the US so maybe they dumped them off in Panama.

As in any Latin American country or maybe beyond make sure all your paper dollars are 1) real 2) free from any tears , missing pieces, excessive wear or ink writing 3) Take extra good care of them so they stay fresh looking.

The main issue for most people with a debit card, is the Foreign Transaction Fee and the Non Network Fee. I carry a Debit card with a flat $2 non network fee and no foreign transaction fee, whether I take out local currency or not, the exchange fee is always minimal and under 1% difference. For purchases, and not withdrawals, there is no fee at all, the exchange rate is based on that days interbank BUY rate, which is very fair and not an issue, were talking under 0.5% normally.

Most ATM and credit cards charge a foreign transaction fee even if the transaction is in U.S. dollars. Those no foreign fee credit cards listed on the website noted by #1 can be a good deal, but they tend to have high interest rates if you fail to pay off your balance in full each month.

I've not used travel bank cards that you load, but I understand you have to watch issuing and other fees -- they have to make money some way.

http://en.wikipedia.org/wiki/Panamanian_balboa

#3- generally pre-loaded cards make their profits by having your cash sitting in their bank. For this reason they are competitive by not charging transaction and ATM fees but I found the best feature to be the excellent exchange rates. I recently used a Caxton FX preloaded MasterCard through 17 Eastern European countries and it really saved me a lot of money...

Interesting, though the Caxton FX site I saw said that to get a pre-loaded Caxton FX Visa or MC card you have to be a permanent resident of the U.K. and have a U.K. debit card.

Sure, thats true for Caxton FX (I have an address and banking in the UK) but there are various similar pre-loaded card operations in other countries...

What happens if those preloaded cards are lost or stolen? You basically lose the cash on them right?

Not at all- you are protected in exactly the same way as any Visa Card or Master Card. They would have to have evidence that you allowed your PIN to be compromised (careless/reckless/criminal) for you to be responsible for any loss....