Public Phones, Hotel-Room Phones and Phone Cards
To make calls from public phones, you'll need a prepaid phone card. There are two different kinds of phone cards: international and insertable. (Coin-op phones are virtually extinct.)
International Phone Cards: These are the cheapest way to make international calls from Europe — with the best cards, it costs literally pennies a minute. They also work for local calls. To use the card, you'll dial a toll-free access number, then type in your scratch-to-reveal PIN number. You can use international phone cards from any type of phone, even your hotel-room phone (but ask at the front desk if there are any fees for toll-free calls). The cards are sold all over; look for them at newsstand kiosks and hole-in-the-wall long-distance shops. Ask the clerk which of the various brands has the best rates for calls to America. Because cards are occasionally duds, avoid the more expensive denominations. These cards usually work only in the country where they're purchased (unless otherwise noted on the card).
There's one catch: International phone cards are such a good deal that the national telecom companies in certain countries (including Germany and Great Britain) have cracked down. In these places, using one of these cards at a payphone now comes with a hefty surcharge that effectively negates the savings. However, even in these countries, international phone cards are still a good deal if you call from a fixed line (such as in a hotel room). Also, international phone cards are still relatively rare (and more expensive) in Eastern Europe.
Insertable Phone Cards: This type of card can be used only at pay phones. It's handy and affordable for local and domestic calls, but more expensive for international calls. To use the card, you physically insert it into a slot in the pay phone. They're sold in denominations starting at about €5 at tobacco shops, newsstands, post offices, and train stations (except in Great Britain, where pay phones take major credit cards instead). Note that insertable phone cards work only in the country where they're purchased.
Hotel-Room Phones: Calling from your room can be cheap for local calls (ask for the rates at the front desk first), but is often a rip-off for long-distance calls (unless you use an international phone card, explained earlier). Incoming calls are free, making this a cheap way for friends and family to stay in touch (provided they have a good long-distance plan for calls to Europe — and a list of your hotels' phone numbers).
US Calling Cards: These cards, such as the ones offered by AT&T, Verizon or Sprint, are the worst option. You'll nearly always save a lot of money by using a local phone card instead.