Mexico Money Matters

• Print
• E-mail
• Add to My Trips

Back to MexicoMexico Money Matters

Currency

The universal currency sign ($) is used to indicate pesos in Mexico. The use of this symbol in this guide, however, denotes U.S. currency.

The currency in Mexico is the peso. Paper currency comes in denominations of 20, 50, 100, 200, and 500 pesos. Coins come in denominations of 1, 2, 5, 10, and 20 pesos, and 20 and 50 centavos (100 centavos = 1 peso). The current exchange rate for the U.S. dollar, and the one used in this book, is around 11 pesos; at that rate, an item that costs 11 pesos would be equivalent to US$1.

Getting change is a problem. Small-denomination bills and coins are hard to come by, so start collecting them early in your trip. Shopkeepers everywhere always seem to be out of change and small bills; that's doubly true in markets.

Many establishments that deal with tourists, especially in coastal resort areas, quote prices in dollars. To avoid confusion, they use the abbreviations "Dlls." for dollars and "M.N." (moneda nacional, or national currency) for pesos.

The rate of exchange fluctuates daily, so you probably are better off not exchanging too much currency at once. Don't forget to have enough pesos to carry you over a weekend or Mexican holiday, when banks are closed. In general, avoid carrying the U.S. $100 bill, the bill most commonly counterfeited in Mexico and therefore the most difficult to exchange, especially in smaller towns. Because small bills and coins in pesos are hard to come by in Mexico, the $1 bill is very useful for tipping. A tip of U.S. coins, which cannot be exchanged into Mexican currency, is of no value to the service provider.

The bottom line on exchanging money: Ask first, and shop around. Banks generally pay the top rates.

Casas de cambio (exchange houses) are generally more convenient than banks because they have more locations and longer hours; the rate of exchange may be the same as at a bank or slightly lower. Before leaving a bank or exchange-house window, count your change in front of the teller before the next client steps up.

Large airports have currency-exchange counters that often stay open whenever flights are operating. Though convenient, they generally do not offer the most favorable rates.

A hotel's exchange desk commonly pays less favorable rates than banks; however, when the currency is in a state of flux, higher-priced hotels are known to pay higher rates than banks, in an effort to attract dollars. Note: In almost all cases, you receive a better rate by changing money first, then paying.

It's a good idea to exchange at least some money -- just enough to cover airport incidentals and transportation to your hotel -- before you leave home (though don't expect the exchange rate to be ideal), so you can avoid lines at airport ATMs (automated teller machines). You can exchange money at your local American Express or Thomas Cook office or your bank. If you're far away from a bank with currency-exchange services, American Express offers travelers checks and foreign currency, though with a $15 order fee and additional shipping costs, at tel. 800/807-6233 or www.americanexpress.com.

A Few Words about Prices -- The peso's value continues to fluctuate -- at press time, it was roughly 11 pesos to the dollar. Prices in this book (which are always given in U.S. dollars) have been converted to U.S. dollars at 11 pesos to the dollar. Most hotels in Mexico -- with the exception of places that receive little foreign tourism -- quote prices in U.S. dollars. Thus, currency fluctuations are unlikely to affect the prices most hotels charge.

Mexico has a value-added tax of 15% (Impuesto de Valor Agregado, or IVA; pronounced "ee-vah") on most everything, including restaurant meals, bus tickets, and souvenirs. (Exceptions are Canc?n, Cozumel, and Los Cabos, where the IVA is 10%; as ports of entry, they receive a break on taxes.) Hotels charge the usual 15% IVA, plus a locally administered bed tax of 2% (in most areas), for a total of 17%. In Canc?n, Los Cabos, and Cozumel, hotels charge the 10% IVA plus 2% room tax. The prices quoted by hotels and restaurants do not necessarily include IVA. You may find that upper-end properties (three or more stars) quote prices without IVA included, while lower-priced hotels include IVA. Always ask to see a printed price sheet and always ask if the tax is included.

Banks & ATMs

Banks in Mexico are rapidly expanding and improving services. They tend to be open weekdays from 9am until 5pm, and often for at least a half day on Saturday. In larger resorts and cities, they can generally accommodate the exchange of dollars (which used to stop at noon) anytime during business hours. During times when the currency is in flux, a particular bank may not exchange dollars, so check before standing in line. Some, but not all, banks charge a service fee of about 1% to exchange traveler's checks. However, you can pay for most purchases directly with traveler's checks at the establishment's stated exchange rate. Don't even bother with personal checks drawn on a U.S. bank -- the bank will wait for your check to clear, which can take weeks, before giving you your money.

Travelers to Mexico can easily withdraw money from ATMs (automated teller machine) in most major cities and resort areas. The U.S. State Department has an advisory against using ATMs in Mexico for safety reasons, stating that they should only be used during business hours, but this pertains primarily to Mexico City, where crime remains a significant problem. In most resorts in Mexico, the use of ATMs is perfectly safe -- just use the same precautions you would at any ATM. Universal bank cards (such as the Cirrus and PLUS systems) can be used. This is a convenient way to withdraw money and avoid carrying too much with you at any time. The exchange rate is generally more favorable than that at a casas de cambio. Most machines offer Spanish/English menus and dispense pesos, but some offer the option of withdrawing dollars. The Cirrus (tel. 800/424-7787; www.mastercard.com) and PLUS (tel. 800/843-7587; www.visa.com) networks span the globe; look at the back of your bank card to see which network you're on, then call or check online for ATM locations at your destination. Be sure you know your personal identification number (PIN) before you leave home and be sure to find out your daily withdrawal limit before you depart. Also keep in mind that many banks impose a fee every time a card is used at a different bank's ATM, and that fee can be higher for international transactions (up to $5 or more) than for domestic ones (where they're rarely more than $1.50). On top of this, the bank from which you withdraw cash may charge its own fee. To compare banks' ATM fees within the U.S., use www.bankrate.com. For international withdrawal fees, ask your bank.

You can also get cash advances on your credit card at an ATM. Keep in mind that credit card companies try to protect themselves from theft by limiting the funds someone can withdraw outside their home country, so call your credit card company before you leave home. And keep in mind that you'll pay interest from the moment of your withdrawal, even if you pay your monthly bills on time.

Traveler's Checks

Traveler's checks are something of an anachronism from the days before the ATM made cash accessible at any time. Traveler's checks used to be the only sound alternative to traveling with dangerously large amounts of cash. They were as reliable as currency, but, unlike cash, could be replaced if lost or stolen.

These days, traveler's checks are less necessary because most cities have 24-hour ATMs that allow you to withdraw small amounts of cash as needed. However, keep in mind that you will likely be charged an ATM withdrawal fee if the bank is not your own, so if you're withdrawing money every day, you might be better off with traveler's checks -- provided that you don't mind showing identification every time you want to cash one.

You can get traveler's checks at almost any bank. You can also get American Express traveler's checks over the phone by calling tel. 800/221-7282; Amex gold and platinum cardholders who use this number are exempt from the 1% fee.

Visa offers traveler's checks at Citibank locations nationwide, as well as at several other banks. Call tel. 800/732-1322 for information. AAA members can obtain Visa checks without a fee at most AAA offices or by calling tel. 866/339-3378. MasterCard also offers traveler's checks. Call tel. 800/223-9920 for a location near you.

If you choose to carry traveler's checks, be sure to keep a record of their serial numbers separate from your checks in the event that they are stolen or lost. You'll get a refund faster if you know the numbers.

Credit Cards

Credit cards are a safe way to carry money: They also provide a convenient record of all your expenses, and they generally offer relatively good exchange rates. You can also withdraw cash advances from your credit cards at banks or ATMs, provided you know your PIN. If you've forgotten yours, or didn't even know you had one, call the number on the back of your credit card and ask the bank to send it to you. It usually takes 5 to 7 business days, though some banks will provide the number over the phone if you tell them your mother's maiden name or some other personal information.

Keep in mind that when you use your credit card abroad, most banks assess a 2% fee above the 1% fee charged by Visa, MasterCard, or American Express for currency conversion on credit charges. But credit cards still may be the smart way to go when you factor in things like exorbitant ATM fees and higher traveler's check exchange rates (and service fees).

In Mexico Visa, MasterCard, and American Express are the most accepted cards. You'll be able to charge most hotel, restaurant, and store purchases, as well as almost all airline tickets, on your credit card. You generally can't charge gasoline purchases in Mexico. You can get cash advances of several hundred dollars on your card, but there may be a wait of 20 minutes to 2 hours.

Charges will be made in pesos, then converted into dollars by the bank issuing the credit card. Generally you receive the favorable bank rate when paying by credit card. However, be aware that some establishments in Mexico add a 5% to 7% surcharge when you pay with a credit card. This is especially true when using American Express. Many times, advertised discounts will not apply if you pay with a credit card.

For tips and telephone numbers to call if your wallet is stolen or lost, go to "Lost & Found" in the "Fast Facts" section of this chapter.

Dear Visa: I'm Off to Cancún! -- Some credit card companies recommend that you notify them of any impending trip abroad so that they don't become suspicious and block your charges when the card is used numerous times in a foreign destination. Even if you don't call your credit card company in advance, you can always call the toll-free emergency number if a charge is refused -- a good reason to carry the phone number with you. But perhaps the most important lesson is to carry more than one card on your trip; if one card doesn't work for any number of reasons, you'll have a backup.