“Money it’s a gas, Grab that cash with both hands and make a stash”
We’re not sure if Pink Floyd ever tried exchanging money in a Mexican “Casa de Cambio” or withdrawing cash/pesos from an ATM, but we liked the lyric anyway.
Mexico’s currency is the Peso, usually denoted by the MXP sign. But just to confuse you the $ also is used when writing prices in pesos. If a price is quoted in US dollars it will in most cases be shown as ‘US$5′ or $’5 USD.’ And like the US, Mexico also has centavos (cents). The smallest coin is the ten centavo coin, and it’s pretty useless for making a purchase because 100 centavos = 1 peso and it takes about 18-19 pesos to make one US dollar (at this time). Coins also come in denominations of 20 and 50 centavos and one, two, five and ten pesos There are notes in the denomination of 20, 50, 100, 200, 500 and 1000 pesos.
There are a lot of practical tips out there about credit card exchange rates, etc. but our local take is this… Cash is great for day to day expenses. Credit cards perfect for large payments (hotel bills) Cash is necessary in small villages and towns if you are traveling outside the popular tourist cities.
Sure some places, like restaurants or large clothing and souvenir stores will take USD but you’ll get a lower exchange rate. In many cases it is lower than a “casa de cambios” exchange houses where you can change dollars to pesos outside of the bank. Grocery stores and membership clubs like Costo and Sam’s are known for providing a great exchange rate when you use US dollars. These days the stores do limit your use of dollars to under 100 USD. Make smaller purchases and gain from their great exchange rate! The change houses “casa de cambios” where you can exchange your currency for pesos provide an exchange rate just below the international market rate. Banks are a great place to change money, but bring your passport! Banks will not exchange money unless you have your passport.
Credit cards such as Visa and MasterCard are more widely accepted at restaurants, eco parks and bigger gifts shops, but don’t be caught short at a little mom & pop business when they say “Solo effective” …cash only”. Some smaller businesses may charge you a “convenience fee” for using your credit card instead of paying in cash. It is best to use your cards for larger purchases and have Mexican Pesos on hand for those smaller purchases.
When using your Debit and Credit cards abroad, most transactions will incur an international transaction fee (usually around 3%), however, some banks and travel rewards credit cards will waive those, so ask at your bank.
ATMs (caja permanente or cajero automático) are an easy source of cash but they can be costly is not inconvenient at times. Be warned, in some of the smaller towns you may encounter a machine that has run out of money. This happens regularly over high holidays like Christmas, New Years and Easter.
What you do have to be careful of are the ATM fees. The fees vary depending on the provider. Some very visible ATM’s on 5th Avenue in Playa del Carmen and other areas have sizable fees associated with them, up to 90 pesos (4 to 5 dollars or more). CIBanco ATM’s have both a great exchange rate and very low ATM fees, under a dollar.
Always request a receipt when you use the ATM so you can balance out your check book when you get home. Or use the information to track everything on your phone or tablet with your bank’s app.
Tip 1: Call your bank before you leave home and tell them you are going to be using debit or credit cards in Mexico so they don’t shut your account down due to unusual activity. You can also adjust your withdraw limit up or down and even create an email withdraw alert. It’s peace of mind to receive an email every time a $100 USD withdraw is made from your account while on vacation!
Tip 2: Contact your bank and ask if they have an affiliation with an international bank. We know Bank of America clients can use Banco Santander branch ATMs here in Mexico without service fees. Canadian Scotia Bank customers will also not be charged fees if you use the local Scotia bank in Playa del Carmen, Cancun or Tulum. We also know that you can get a special travel account from Wells Fargo.