First time to Mexico--Cash or Credit Card? Need Advice (2013)

[off2maui]

We will be traveling for the first time to Mexico for a stay at Casa Dorada in Cabo San Lucas. Friends recommended we take a lot of US cash because the ATM fees they paid in the Marina area were outrageous. Gave an example of an $80 fee on a $500 withdrawal. We normally use our credit card that has no foreign exchange fees added to purchases when traveling out of the country. We also have a debit card that we can use at an ATM. Is a credit card easily usable in Cabo?

Hate the thought of traveling with a lot of cash.

In addition, are US dollars accepted widely in Cabo?

Seeking advice on how to pay at restaurants, shopping etc., and what amount of US$ to exchange at the airport for Pesos.

Thanks for your help!

 

[siesta]

no need to travel with alot of cash. US dollars are accepted everywhere, however you get better value paying with pesos. So using your credit card may not be a great value becaus even though you have no currency conversion fee, you will get a value of around 10 pesos per dollar the way they charge.

Your absolute best bet, is to open a capital one free checking account, 0% currency conversion fee, and they refund you the ATM fee up to $25 a month, and pull out pesos at a bank ATM. Most bank atms charge around $2-3 so thats at least 8 times pulling out cash for free, which is way more then youd need.

The story you hear of someone getting charged $80 in fees on $500 is absolutely absurd. Unless they used sketchy private atms sitting in a dark corner that charges $10 per transaction, or pulled out money in increments of $20 each time, they are grossly exagerating. Bcause pulling out $500 with a typical atm card that has 3% or 5% fee would be $25 tops, and lets even say it was a $20 atm fee (which is absurd) thats $45, and again thats ridiculous.

So basically your friends have no clue what they are talking about, because advising someone to take alot of cash with them is bad advice, and they either got ripped off at atm or are flat out lying/exaggerating

 

[Passepartout]

DO NOT take a lot of US currency to Mexico. There is a limit on how much your resort can exchange and you cannot exchange it without a business account at a bank. This was instituted to combat drug trade and money laundering. Use an ATM card AT A BANK- DURING BANKING HOURS. You will pay about $1.50 each to that bank and your own for each transaction. Get enough cash to last you a day or two to limit the expenses. Keep a limited amount in the account accessible to the ATM in case it's lost/stolen/compromised, then transfer from your savings or other account as needed on the internet. Charge all large purchases to a credit card as well as your resort expenses.

The reason I say only use a BANK ATM is the private ones are not regulated and may just capture your information. And the reason I say to use it during business hours is that I used one at a Santander Bank one bright Sunday morning. I got a receipt saying I'd made a withdrawal, but no cash came out. When I contested the charge with my bank the next day when they came to work, they shut off access to my account by card. Fortunately I had other accounts I could access or the trip might have been ruined.

Enjoy Cabo. It will be hot, but it's a DRY heat, and makes the margaritas taste soooo good and refreshing!

Jim

 

[PStreet1]

Thumbs up to previous responses.

I want to add another thought. We opened a travel account at our regular bank (Wells Fargo). It is not tied to our regular account in any way. Now, I like the idea so well that I really don't use the other (main) account card at all. I just transfer money into the travel account from the main account whenever needed by using the on-line banking features. If I lose the travel account card or it is compromised in any way, my potential for loss is definitely controlled.

 

[T_R_Oglodyte]

check with your bank to find out if they have a banking relationship with a Mexican bank that reduces or eliminates ATM fees.

For example, we have a BofA account, and we can use the Santander ATMs to take out money from our checking account in pesos, at bank exchange rates, and without ATM fees.

 

[off2maui]

Thank you for all the responses. We bank with Wells Fargo, so I'll be checking to see if they have a banking relationship with a Mexican bank. I really like the idea of a travel account. The Capital One free checking looks like a good option too. I knew there must be options not to carry around a bunch of cash!

 

[T_R_Oglodyte]

Thank you for all the responses. We bank with Wells Fargo, so I'll be checking to see if they have a banking relationship with a Mexican bank. I really like the idea of a travel account. The Capital One free checking looks like a good option too. I knew there must be options not to carry around a bunch of cash!

Before we go down, I try to get a couple of rolls of $1 coins. I then use those for tips, because it's a lot more convenient to reach in my pocket to pull out a coin than it is to go for my billfold, particularly when I have my billfold in a more secure location than my back pocket. (Keeping a billfold in a back pocket is not a good idea when you are out and about.)

 

[SMHarman]

Before we go down, I try to get a couple of rolls of $1 coins. I then use those for tips, because it's a lot more convenient to reach in my pocket to pull out a coin than it is to go for my billfold, particularly when I have my billfold in a more secure location than my back pocket. (Keeping a billfold in a back pocket is not a good idea when you are out and about.)

I did something similar, went to my local Chase and got $100 in singles. Really handy for tipping.

 

[bobpark56]

Better to tip with Pesos

I did something similar, went to my local Chase and got $100 in singles. Really handy for tipping.

The Mexicans we have met seem to appreciate being tipped in Pesos, rather than with US dollars. It saves them losing money by have to pay the exorbitant fees associated with using a money exchanger to convert the tips into Pesos.

Why not be kind to the Mexicans who serve you? Or, I suppose, you could tip more generously.

 

[pacodemountainside]

I have found locals fascinated with $1.00 US coins and if more then use two or all those local coins you have accumulated.

WalMart exchange rate is competitive.

I do put rental car on credit card as required for collision insurance.

Do a couple TS pitches and end up with plenty of pesos.

Yes, lots of small vendors use 10/1 to make math easy so much better to pay in pesos. Parking and gas come to mind.

Never had a problem, but sage advice on billfold should be heeded.

 

[Passepartout]

Tip in pesos (you wouldn't want to be tipped in a currency that required a stop at a bank), but nowhere near as lavishly as Americans tip at home- just at more places- for instance, you tip the grocery bagger, and if the gas attendant pumps your gas or washes your window tip him. For taxis, just round it up. Say, if the taxi fare is 150 pesos, pay 160. Also expect to pay taxi drivers for your luggage too- add 10 or so pesos per piece. Paco mentioned something I can reinforce, when you make purchases using your debit (ATM) card- like for groceries- you can get pesos along with the purchase for no additional surcharge.

Some more Mexico tips for first timers
At restaurants, you will never be given the check until you ask for it. It is considered rude- like you are being asked to leave. When you are ready for the check, no snapping of fingers or making scribbling motions, just ask, " La cuenta (kwenta) por favor". 'The bill, please'. The answer to "Gracias", 'Thank you', is "de nada", 'it's nothing'. When you enter a shop, greet the shopkeeper, "Hola" (Olah) and thank him/her, "Gracias" as you leave.

Have fun on your first trip to a warm, enchanting country.

Jim

 

[bellesgirl]

I agree that the ATM is the best way to pay for items in Mexico. However, if you do use your credit card, it will be charged in pesos (not US dollars) and converted at the bank rate. We use our Capital One card in Mexico all the time and get a great conversion rate.

 

[qb_bc]

When I travel, I generally;
-take 500 in US dollars. For Mexico it isn't a problem, but for many other countries I get new bank notes with no tears or writing on them.
-take small notes, 50 would be largest. This depends on how you expect to use them
-make local currency withdrawal from a bank ATM. Usually it matters whether it is Cirrus or Plus, so check your card to know which it is.
-if I have too much foreign currency when I'm leaving, I keep enough for taxi and airport spending, and use the rest to pay down my hotel bill.
-using bank ATM, and watching branding, the highest fee I have had to pay is $5.00. However many banks also charge 2 1/2% foreign exchange get rate when they calculate. Chase is good, in that they don't add this in.

 

[T_R_Oglodyte]

Tip in pesos (you wouldn't want to be tipped in a currency that required a stop at a bank), but nowhere near as lavishly as Americans tip at home- just at more places- for instance, you tip the grocery bagger, and if the gas attendant pumps your gas or washes your window tip him. For taxis, just round it up. Say, if the taxi fare is 150 pesos, pay 160. Also expect to pay taxi drivers for your luggage too- add 10 or so pesos per piece. Paco mentioned something I can reinforce, when you make purchases using your debit (ATM) card- like for groceries- you can get pesos along with the purchase for no additional surcharge.

For some reason, tipping taxi drivers is not the norm in Puerto Vallarta. We have often been advised by hotel staff that tipping taxi drivers is not the norrm, and I have actually had taxi drivers refuse to accept tips when offerred.

Otherwise - yeah - tipping of a lot more people is the norm. Pretty much anyone who provides a service.

I don't worry about tipping in dollars because dollars are so widely accepted. Also if you tip someone a dollar when ten pesos is the normal "unit", the recipient actually comes out ahead. So if you would give someone 10, 20, or 30 pesos, give them 1, 2, or 3 dollars instead.

 

[bjones9942]

Same thing in Mazatlan about tipping taxi drivers. If they make a stop or two for you on your way, or if you have a lot of bags - then tip. Otherwise, no tip.

As someone who used to work for tips, and who lives near the U.S.A./Canadian border, I can tell you it's a royal pain in the a** to be tipped in a foreign currency, especially coins (there was a time - maybe still, where U.S. banks wouldn't take Canadian coin). Just don't do it. Really. Instead of a roll of $1 coins buy a roll of $10 pesos when you get into town. If it's that hard for people to make one trip to a bank, imagine how hard it must be for all the recipients of foreign currency to have to do it. At least in Mazatlan, U.S. dollars are not widely accepted. Any bonus with the exchange rate will be taken up with their time spent at the bank.

 

[kwindham]

I don't have any knowledge of further inland in another country, but when I was in TJ and Rosarito Beach MX in Jan, the people preferred us currency. Maybe because it is so close to the border?

 

[moonlightgraham]

Also, if your resort gives you the option to settle your charges in dollars or pesos, settle in pesos. Most resort/hotel exchange rates are not nearly as favorable as you'll get via your credit card company. After a week-long stay of charges the difference of just a peso or two in the exchange rate can be considerable. On our last visit we saved around $100 by opting for the peso settlement option on a $1,000 bill at the Royals.

 

[Passepartout]

when I was in TJ and Rosarito Beach MX in Jan, the people preferred us currency. Maybe because it is so close to the border?

Of course they would prefer US Dollars when they can get them from you for 10 pesos each and the bank rate is 13. That on top of whatever the profit margin on your purchase is.

 

[T_R_Oglodyte]

Same thing in Mazatlan about tipping taxi drivers. If they make a stop or two for you on your way, or if you have a lot of bags - then tip. Otherwise, no tip.

As someone who used to work for tips, and who lives near the U.S.A./Canadian border, I can tell you it's a royal pain in the a** to be tipped in a foreign currency, especially coins (there was a time - maybe still, where U.S. banks wouldn't take Canadian coin). Just don't do it. Really. Instead of a roll of $1 coins buy a roll of $10 pesos when you get into town. If it's that hard for people to make one trip to a bank, imagine how hard it must be for all the recipients of foreign currency to have to do it. At least in Mazatlan, U.S. dollars are not widely accepted. Any bonus with the exchange rate will be taken up with their time spent at the bank.

In Puerto Vallarta US currency is widely accepted. Almost everyone will gladly accept your dollars as the equivalent of ten pesos, and give you change back in pesos and centavos. I've seen them actually seem disappointed when I pull out my pesos; they can be very quick, too quick in fact, to assure me that they take dollars as well as pesos. When they see me getting ready to pay in pesos, and they chime in that they accept dollars, that tells me they would rather get dollars than pesos.

 

[jules54]

In the Playa Del Carmen area and also the Cabo area everyone always seems to prefer US dollars. I use my credit card with no transaction fees or conversions fees and always make out ahead in the exchange rate. Usually the only thing I use pesos for are taxi, buses or places to eat that don't take credit cards. When I use dollars or peso I do a quick conversion in my head or on phone to see which is coming best.

 

[Passepartout]

Usually the only thing I use pesos for are taxi, buses or places to eat that don't take credit cards. When I use dollars or peso I do a quick conversion in my head or on phone to see which is coming best.

You are clearly much more talented than I to be able to figure in your head if paying in US dollars will beat the bank rate at an ATM. Today's bank exchange rate is roughly 12.66 pesos per dollar. I'd be interested in hearing a scenario of how that would that work.

I used to print out a 'cheat sheet' at www.oanda.com with both dollars/pesos on one side and pesos/dollars exchange on the other, just to be able to compare. Any more I just get pesos at a bank ATM and make purchases and pay resort fees on credit card. It's easier and I think saves on fees.

Jim

 

[easyrider]

If a person is unsure of how many pecos is how many dollars it can lead to over tipping or getting short changed. An example is the 200 or 500 pecos bill can easily be confused for $2 or $5 when they are worth about $20 or $50.

I use USD for everything in Cabo with the exception of US coins which are worthless in Mexico for the most part. The entire South Baja tourist area ( Cabo, San Jose del Cabo, Cerritos, Todos Santos, Playita) is accepting USD and gives change back in pecos. Even the little mini market up in the hills takes USD.

In the Banderas Bay areas its hit and miss. PV and NV the USD works fine but in Bucerias the regular Mexican stores have a hard time with USD. The bars and tourist restaurants accept USD.

The resort can only exchange $300 USD into aprox $330 Pecos a day per person.

I like giving $2 bills for tips.


Bill

 

[Passepartout]

The resort can only exchange $300 USD into aprox $330 Pecos a day per person.

And for your $300, at today's rate, the bank ATM will return just shy of 3,787 pesos. You exchange your way, I'll exchange mine.

ETA, the above exchange will cost you about $3.00. $1.50 each to your bank and to the Mexican bank, unless your U.S. bank has an agreement with the Mexican bank. iirc, B of A and Santander, and some others with HBSC. Check before going to Mexico, you might save a small fee.

Jim

 

[PStreet1]

Of course they would prefer US Dollars when they can get them from you for 10 pesos each and the bank rate is 13. That on top of whatever the profit margin on your purchase is.

I was just getting ready to reply to that post when I found yours. You are 100% right. If they gave you the bank rate, they would, of course, lose money when they converted it. At 11 to 1, they make enough to make it worth while for them. There are also limits now regarding how much can be deposited in the bank in each account in dollars, so they need to consider whether they can deposit it or where they can spend dollars (and spending them entails how much the person receiving the dollars will charge them for using dollars, too). Pesos are a "cleaner" transaction for all; you know what you are paying and you can judge the percentage you will leave for a tip.

Here in Rosarito, we are so close to the border that tipping is generally the same as it would be in the U.S.--and of course, we tip everyone who does a service: the sacker at the grocery store, the guy in the parking lot anywhere, etc.

 

[easyrider]

And for your $300, at today's rate, the bank ATM will return just shy of 3,787 pesos. You exchange your way, I'll exchange mine.

ETA, the above exchange will cost you about $3.00. $1.50 each to your bank and to the Mexican bank, unless your U.S. bank has an agreement with the Mexican bank. iirc, B of A and Santander, and some others with HBSC. Check before going to Mexico, you might save a small fee.

Jim

Your way works very good for some one that wants to actually go out and find the best exchange rate. Exchanging $100 usd to pecos is only ( $8.00 usd) 104 pecos difference from the resort to the best exchange rates available. The resort exchange is easier , faster and more convenient for most travelers, especially a first timer, imo.

Another thing about USD in Mexico is that most places can not break large American bills, so $20 bills are about as high a denomination as most places can handle. The exception is the resort and the banks.