Using ATMs in Mexico

Foreign currency exchange used to necesarily involve buying foreign cash in your home country or, more usually, taking traveler’s checks on your journey for exchange overseas.  Traveler’s checks were a staple ‘pack item’ carried by most international travelers.  In either case, money exchange involved spending time and effort lining up at banks or exchange houses to get access to local currency.

The advent of ATMs has changed the landscape of foreign currency trading.

ATMs are not new, and they have been in widespread use in Mexico for nearly two decades now.   However, it wasn’t until the 1990′s that international visitors and travelers began to use them in earnest.   ATMs offer several advantages: there is no need spend time pre-purchasing checks and spend more time again cashing them; ATMs are open extended hours; they dispense upto US$500 worth of Mexican pesos in local currency directly from your savings or checking account back home (exact amount depending on the bank’s policy) .  Some places also offer ‘pre paid’ ATM cards, which the purchaser charges up with credit for access to those funds overseas; a type of ‘electronic traveler’s check’.

ATMs have become more expensive to use as banks caught-on to the fact that their customers were buying less traveler’s checks and using their ATM cards abroad.   Fees for use of cards overseas have increased and the exchange rate ‘spread’ (the difference between the buy and sell rate of foreign currency) has also increased.  These increased charges mean that customers using ATMs get less pesos in return for the same amount of home currency.

It’s worth pointing out that cash withdrawn using credit card accounts, as distinct from ‘debit’ cards linked to accounts with your own checking or savings funds, is one of the most expensive ways to borrow money.

Traveler’s checks are still useful for ‘back-up’ or emergency funds.  For example, if the bank’s ATM retains your card, or the card develops a physical fault, you won’t be able to get it replaced by a Mexican bank.  Having a few traveler’s checks would help in the event that you were unable to access cash via ATMs.

Foreign currency in cash is readily accepted at exchange houses and banks across Mexico and offers you the best rates and least expensive method to exchange your foreign notes into Mexican pesos; albeit it carries the highest risk of unforeseen loss.

A blog we published some time ago, entitled A Fair Exchange explains the different options to buy pesos for your visit to Mexico in some detail.

Also See:

Guide to Money in Mexico

Blogs About Money, Banking and Finance in Mexico