When they arrive in Puerto Vallarta, the first questions our friends ask are, “does everyone accept credit cards?” and “how do we get pesos?”. There are many different approaches to money exchange in Mexico. We find using debit and credit cards to be the simplest approach, and they offer the best rates.
Keep reading to find tips for using credit and debit cards to get the best exchange rate. I have also called out a couple of legal but questionable Mexican ATM practices that you do NOT want to fall for!
US dollars to Mexican Pesos Exchange Rate
First things first, how much is the US dollar worth in Mexico? Currently, the exchange rate is approximately 1 US dollar to 20 Mexican pesos. To determine the price of an item in US dollars, you multiply the amount in pesos by 0.05.
Example: $200 pesos x 0.05 = $10 USD
I can do that simple math on paper all day long, but after a margarita or two, I lose track of the decimal places! Instead, I use the method below.
If you have math anxiety, there are countless smartphone apps for currency conversion. I use one that has currency conversion as well as weight, distance, etc. because – sigh – the metric system.
MYTH: Mexicans Prefer US Dollars Over of Pesos
Maybe this was true years ago before Mexico reformed their banking regulations, but it is not true today. The peso is the national currency of Mexico. If you pay a street vendor in US dollars, they have to take the dollars to the bank or currency exchange (Casa de Cambio). The vendor will incur the same unfavorable exchange rates a tourist would. Their profit margins are slim to start with, so putting them in that position is inconsiderate.
On the other side of the coin, many restaurants in Mexico accept US dollars at an even less favorable exchange rate. One that comes to mind is my favorite taqueria. The last time I was there, the sign said the exchange rate is $17 pesos per $1 USD. Now, my favorite taco shop is CHEAP, so losing $3 for every $20 you spend will not break the bank. Still, I would rather give that $3 to the server who takes care of my craving for tacos al pastor!
Some of the more corporate restaurants list prices in US dollars and pesos. When you see that, ALWAYS ask to be charged in pesos instead of dollars. If not, they will charge dollars at their terrible exchange rate.
Before You Leave Home
- Contact your bank to tell them you intend to use your ATM card in Mexico
- Contact your credit card company to place a travel notice on your account.
- Confirm that your credit card does NOT charge a foreign transaction fee. Example: our Southwest Airlines Visa charges a foreign transaction fee, but our American Airlines Mastercard does not. We use the American Airlines card, so we get the best price.
- I always put a travel notice on the primary credit card we intend to use AND a backup credit card. There have been several times when a communication error with the credit card machine resulted in a declined transaction (even though the credit card company confirmed there were no issues with the account).
- Go ahead and withdraw some US dollars just in case everything goes wrong. One time, the representative at my local bank did not put the travel notice on my account correctly. As luck would have it, I did not notice until the bank was closed on Friday, so we went all weekend with no cash.
ATM
We always use ATMs that are attached to a bank. They usually have a separate entrance from the bank with a glass door that closes behind you. Never use a stand-alone ATM randomly located on the sidewalk. Those are notorious for card skimmers.
After you insert your card, take a second to look for the English option. It is not always obvious, but usually somewhere on the screen. This will be important so you can watch for the deceptive questions.
Shady Question #1: Would you like to protect this cash withdrawal over the next 3 hours?
Is it just me, or is this totally ridiculous?! Are they going to believe you when you say the wind blew away a handful of pesos? Unlikely.
DECLINE!
Shady Question #2: Please select your transaction currency. Accept/Decline Conversion.
By virtue of using a US debit card, your bank will manage the conversion at a much lower commission. In the photo below, you can see that this would have cost me an additional $42 USD (for literally nothing!). When I checked my bank account, the conversion fee was closer to $3 USD.
DECLINE!
Credit Cards
Cash is still king in Mexico, but more and more merchants accept credit cards. As long as your credit card company does not charge a foreign transaction fee, you will receive the best conversion rate using a card. All the same, some of our favorite restaurants are cash only. It would be a SHAME to miss out on those incredible places!
Casa de Cambio (House of Cash)
Currency exchange houses charge the highest conversion rates of any financial institution, so they should be used as a last resort. If nothing goes as planned with your credit and debit cards, you can take US dollars there for pesos. Just be prepared to get less for your money.
Recap – Money Exchange in Mexico
Money exchange in Mexico is a cinch! Tourist destinations like Puerto Vallarta, Cancun, and Cabo widely accept credit cards. Still, you will miss out on some local flavor if you do not have pesos available. Don’t forget to call your bank and credit card companies to let them know you are traveling and watch the ATM prompts closely. If you follow the steps in this post, you will have a fist full of pesos and be on your way to the closest taco stand before you can say “Hola”!
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