Mexican Currency Exchange – Should I Get Pesos Before Traveling to Mexico?
One of the most common questions we’re asked when sending clients to our sunny southern neighbors is Should I get pesos before traveling to Mexico? And if the answer were simple, it probably wouldn’t be asked so often.
The answer is, “It depends.”
In this article, I’ll go through some of the ins and outs of Mexican currency exchange to help you decide what’s best for you.
First – What kind of trip are you taking?
If you’re going for a week, and your destination is an all-inclusive resort where you plan on parking your behind on a lounge chair all day, sipping those cold, delicious Mexican cocktails, then you probably don’t need to worry about it. Take a handful of $1 bills for tips and small things on the way, and you’ll probably be fine. Take an ATM card just in case (see below about using ATM machines in Mexico).
(But don’t the Mexicans have to exchange the dollars for pesos? Isn’t that a hassle? Actually, no, they don’t exchange them. They use them just like you did! So for small things to and from a resort, I can’t imagine you’ll have any problems.)
Second – How long are you staying?
Conversely, if you’re going to a B&B or a VRBO, staying in a city such as Guadalajara or Puerto Vallarta, or if you plan on staying for an extended time, then I would recommend exchanging $100 US for about $2000 Mexican pesos. This should be plenty to get you from an airport to your lodging and a snack along the way.
Ultimately, you’ll need to decide how you’re going to replenish your cash, which means visiting an ATM machine or a Mexican bank.
Using an ATM Machine in Mexico
For the most part, using an ATM in Mexico is just like using one in the States. Walk up, insert your card, enter your PIN, ask for money, take your money and go away.
But then there are all the little details.
First, if you’re walking around a city in Mexico looking for some cash, you will see dozens of little stand-alone cash machines on street corners. They look something like this:Just Walk on By
They are commonly sitting out in the open, not inserted in a wall, and often they say “CASH” on them in English. They have no bank association, or at least – not any bank you’ve ever heard of. When you see them, just keep walking. They either dispense US dollars (which is exactly the opposite of what you’re wanting), or they give pesos, but at a terrible exchange rate. Thieves place skimmers more often on these machines – fake overlays to the card slot or PIN pad entry, where they gather your personal information and use it to clone new cards. And sometimes – as was happening recently in Playa del Carmen – they have been tampered with so as to prevent them from dispensing your cash at all. Once you leave in frustration, the thieves come back and collect.
Instead, look for an ATM machine in or near the lobby of an actual bank associated with your card. They often have guards posted outside for your protection and to monitor the activity around the machines. You’ll see Mexican nationals using them.
Declining the Conversion
One trick to using an ATM in Mexico is knowing when to decline the conversion. Normally, during the transaction you will be asked two questions: Do you want to pay the fee for using the machine? (You must answer yes, or the machine will simply spit your card out and tell you to go away.) The second question is, Do you accept the conversion from dollars to pesos? Always answer “No” to this question. Your bank will calculate a rate for you, and it will almost always be better than the one you’re being offered by the ATM. Don’t worry, it won’t cancel your transaction . . . it will dispense your pesos just fine.
An ATM at a reputable bank will exchange your US dollars in your home account to Mexican pesos at a very reasonable rate. I’ve used them for years and have not had any problems withdrawing money from a Mexican ATM.
Exchanging US dollars for pesos at a bank.
If you’re leery of using an ATM, at home or abroad, you can exchange US dollars for pesos at a bank. It’s a bit more complicated, and there are rules that aren’t always applied evenly.
The official word is this:
Mexico Banking System Cap on Exchange of Dollars for Pesos:
In order to regulate the quantity of dollars entering the Mexican banking system, beginning September 14, 2010, the Mexican government will cap the amount of dollars foreigners can exchange for pesos in Banks & Money Exchange Establishments to no more than US$1,500 per month.
The measure WILL NOT AFFECT purchases made with credit cards or debit cards in Mexico.
The measure WILL NOT AFFECT the amount of cash (in Mexican pesos) an international tourist can withdraw from an ATM machine on a daily or monthly basis.
It is recommended that all travelers bring Mexican pesos as well as their credit and/or debit cards to minimize any inconvenience the exchange cap at banks may cause.
Basically, the rule is specifically aimed at reducing large exchanges of physical US dollars for physical Mexican pesos. If you stick with an ATM or credit card as much as possible, this won’t impact you at all. But if you must exchange dollars for pesos, again, find a reputable bank, take your cash in crisp, new bills (they often reject a bill with even the slightest tear or crease), and your passport (preferably a color copy of your passport). You’ll stand in line for a bit, but ultimately you’ll get what you need.
Avoiding international transaction fees or ATM charges.
Having done it all so many times, we’ve picked up a few tricks along the way to help reduce some of the unnecessary costs of staying in Mexico. Eliminating international transaction fees is one. These are fees that many credit card companies just tack on to any transaction outside the United States. Find a credit card that simply doesn’t charge them. I use a Chase Mileage Plus™ Explorer card, which doesn’t charge fees and I get some good mileage credits when I use it. There are probably others out there as well.
To avoid ATM fees, we have a joint Charles Schwab bank debit card. They charge no ATM fees on any machine in the world. Even if you are charged a fee, that fee is refunded to you each month. If they accidentally miss one, you can call and point it out, and they’ll refund that. We’ve found it very useful.
(Do not, under any circumstances, use a credit card in an ATM machine. They’ll gladly give you cash, but it counts as a cash advance, the interest rate is much higher than your regular rate, and they start charging it immediately with no grace period.)
A Little Mexican Cash Etiquette
Occasionally, I catch friends joking about Mexican pesos, calling it “play money” or “Monopoly money.” Obviously, this is very offensive to Mexicans, so please don’t do it.
Before leaving for Mexico, I recommend making a photocopy of the front and back of your current credit cards, debit cards, ATM cards, health insurance card, and several color copies of your passport. Keep these in your room safe. Should anything be lost, having a copy of it will save you a lot of work and anxiety.
As with any busy tourist area anywhere in the world, Mexico does have pickpockets who may try to help themselves to your cash while on vacation. The techniques are all the same – the casual bump, the crowded bus, the “asking for directions.” In Puerto Vallarta, a common technique is the “Salsa Squirt.” Someone squirts a little sauce on your shirt, and a “helpful” person comes along to point it out and help you clean up with some napkins. In the ensuing patdown, they lift your wallet.
Many Mexicans do not wear a wallet in their back pocket at all, but in the front. For the tourist, I recommend sitting down and going through your wallet, removing anything you simply don’t need in Mexico (Do you really need that library card? Your grocery store loyalty card? Nah!). You may find all you need is a bit of cash and your credit card, which you can easily carry in the front pocket.
Don’t Worry! Be Happy!
Overall, the risk of being scammed or taken advantage of is no higher in Mexico than any other tourist zone. There’s no need for worry. With just a little advance planning, not only can you truly relax and enjoy yourself, you can do it while maximizing your hard-earned dollars.
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