Currency exchange is big business, so it’s no wonder every major world airport features a cornucopia of money changers touting to exchange your currency.
Mexico’s economy is still heavily cash-based and many goods and services must still be paid in cash with Mexican pesos, especially in smaller towns and villages, and places off the beaten track. So you’ll need get hold of some cash while you’re in Mexico.
Fortunately, Mexico is one of the best countries for transacting retail currency exchange. The exchange rates are attractive, the commission charges are low (and usually non-existent) and the ‘spread’ — the difference between the buy rate and the sell rate — is invariably reasonable.
Mexico’s foreign exchange houses willingly accept US dollars as well as a wide range of other currencies and offer good rates on all of them. If your home country uses Canadian dollars, the euro, the British pound, the Swiss franc, the Australian dollar or the yen, there is no point in buying US dollars at home to exchange them into pesos in Mexico: good rates are offered on these currencies locally.
If you are leaving Mexico and have Mexican pesos to sell back into your home currency, it’s much better to do this in Mexico than in e.g the US or Europe. Exchange booths at Mexican airports offer good exchange rates when you are selling pesos and most hold stocks of all major world currencies, including US and Canadian dollars, British pounds, euros, and yen.
While traveler’s checks are still accepted at some banks and exchange houses, an increasing number of places are ceasing to accept or trade them: the widespread use of ATMs, pre-paid debit cards, and credit cards are rendering traveler’s checks obsolescent.
The age of the ATM is here and Mexico is awash with them. Even the small towns have one these days; they are convenient and you don’t even need to worry about whether the teller will be able to speak your language.
The main point to note about ATM use in Mexico with a foreign bank card is that you will get charged at least twice: once for use of the machine abroad, and once again for the ‘currency exchange fee’ which most banks impose: the norm appears to be 2.5%-3.5%. Check with the financial institution that issued your card to find out what you’ll be charged. Due to the charges, it’s sometimes better to withdraw, for example, US$200 worth of pesos than US$50 worth.
- The least expensive way to exchange your currency in Mexico is using cash. Exchange houses in Mexico accept all major currencies, not just US dollars. Cash, however, carries the risk of being subject to unforeseen loss. Some travel insurance policies cover lost cash but never for amounts above a couple of hundred dollars;
- The most expensive way to trade your currency is to buy US dollars in your home country (if not the USA) and then buy pesos with those dollars when you get to Mexico;
- The convenient way to exchange your home currency for pesos is to use an ATM card, with funds drawn down from a debit card linked to your checking or savings back home; pre-paid debit cards are also available from some banks. Rates for use of these cards in Mexico vary by financial institution so check with them before you travel;
- While traveler’s checks are still accepted at some places in Mexico, they are becoming increasingly difficult to cash, exchange rates might not be as attractive, and it’s often time-consuming to exchange them.
See Also: A Tale of Two Airport Exchange Rates
You can find lots of additional practical advice about managing travel money to your best advantage in Mexico on our Money in Mexico Guide.
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