Seasoned readers of these pages may know that we have often extolled the virtues of exchanging your foreign currency in cash when you get to Mexico, and not before. Having just taken note of the exchange rates offered at two airports, our advice remains the same.
If you bought Mexican pesos at London’s Heathrow airport this weekend, you would have received MX$18.45 pesos for each British pound. If you sold pesos to the agency you needed to hand over MX$25.73 pesos to buy a British pound. There’s also a £3.00 commission added to each transaction.
The image above illustrates the rates being offered for British pounds and other major currencies on the same day at Mexico City’s Benito Juarez airport. Traders here were selling British pounds for MX$23.09 pesos, and buying British pounds for MX$21.50 pesos. There is no commission to pay.
To grasp the significant difference between the rates offered in London and Mexico City, it’s helpful to cite an example. Let’s suppose you are leaving London and have £500 in cash to trade for Mexican pesos.
In London, your £500 would be reduced to £497 by the commission, which would convert into MX$9,170 pesos. If you made the exchange in Mexico City, you would have MX$10,750 pesos in your pocket for the same £500.
Now suppose you returned to London with the MX$9,170 pesos you bought there and exchanged them back into British pounds. The airport agency would hand over £356, less another £3.00 in commission, leaving you with just £353 from your original £500. That’s a net ‘cost’ of £147 for the two trades, or 29.4% of your original sum, just for exchanging currency.
If you exchanged the MX$10,750 pesos you bought in Mexico City into British pounds at Mexico City’s airport before you left, you would have £466 returned from your original £500, a far more reasonable cost of £34, or 6.8%, for the same two trades.
It’s a similar story at US and Canadian airports when you exchange dollars for pesos and vice-versa.
Forewarned is forearmed: You’ll have more of your money to spend in Mexico on the things that matter to you when you exchange your foreign currency into pesos when you arrive in Mexico, and sell any left-over pesos you have here before you leave.
See Also: The Trouble With Traveler’s Checks and Access Your Cash Using an ATM in Mexico
You can learn more about currency, use of debit cards in Mexico, and currency exchange on our comprehensive guide to Money in Mexico.
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I agree, just take it out of machines. I get 11.4 pesos for Canadian dollar right now. I only get 11 when I recently left Canada. Also when I use my MasterCard I get 11.95 pesos per dollar exchange. So just get enough pesos before you leave to get you through the first day. Then exchange here.
Íf planning to use your bank ATM card, be sure to advise your bank just PRIOR to your travel of your travel plans. If you have more than one Visa or MasterCard network cards, all the better.
The article’s example used sterling examples, If your British bank is Barclays, check into the Global ATM Alliance that will grant you free ATM access to certain Mexican bank ATMs and, I believe, a waiver of the foreign transaction fee. Otherwise, you will have to pay a fee to the Mexican bank that varies according to the bank; the ATM screen will advise you in Spnanish of the charge prior to your completing any transaction.
When entering the withdrawal amount, recall that it will be in Mexican pesos (unless the machine dispenses USD, in which case you will have to opt for USD).
Some folks have said in the past that the ATM rate at the airport is not as good as ATM rates away from the airport. I do not know about that. Do realize that the rate you get depends on the moment you effect your transaction AND the Mexican bank.
So the fees you can wind up paying at the ATM include your bank’s possible charge for using a foreign ATM, your bank and Visa or MasterCharge’s assessment of a foreign transaction fee, and the given Mexican bank’s charge for ATM access.
Guess what? All those charges, you are still typically far better off than going to an exchange house — particularly but not lmited to those at the airport.
Oh, and forget traveler’s cheques, they are from the past. Wads of cash? Don’t flash them! Pleace all valuables in your hotel safe asap.
Wow! I found this article very surprising. I always thought that money exchange rates were set up by an international commission or something to avoid things like this.
Just use an ATM when you get to Mexico, you usually get a better rate than the exchange kiosks. AND if you have a bank that does not charge you fees, even better.