Tips on Changing Money when Traveling in Mexico
The following is an except from the book, "50 Things You Must Know
Before You Travel to Mexico", by James Truett, a former Associated
Press writer who has lived in Mexico for more than 10 years.
Award-winning author and longtime Baja resident Bruce Berger describes the book as "filled with vital information that even someone who has lived in Mexico for years can learn from it. For the newcomer, reading this book is a necessary act."
To purchase a downloadable copy of the book, click here, or you can buy a paperback edition through Amazon.com at the link on this page.
By James A. Truett
Many Mexico travelers feel more secure when they use their American dollars to pay for purchases, but they don't realize they're paying a hefty premium for the privilege of paying with greenbacks.
Most stores, restaurants or other commercial establishments gladly accept U.S. dollars because they make a nice little extra profit by charging a stiff exchange rate.
Small stores almost always set their exchange rates at least one point below the bank's rates, so they're making an extra 10 percent or more on the transaction, based on an exchange rate that, as of this writing, hovers between 10 and 11 pesos to the U.S. dollar.
Unsuspecting visitors don't realize that the difference in the exchange rate between the merchant and the bank is a hidden cost that effectively raises the purchase price by 10 or more percent. It's a nice little windfall for the small store owner. If you keep track of all of your purchases, you might discover that you're giving a lot of money away by paying in dollars and not watching the exchange rates! Always pay in pesos! But make sure you're not paying too much for your pesos!
How to exchange your money for pesos to get the best rates
Changing money always is a concern once you enter a foreign land. You have a variety of options for exchanging your foreign currency for pesos. Some avenues are more expensive than others, so let's take a look at various methods. Getting the best exchange rate possible is the key to getting the most value out of your hard-earned dollars.
Casas de Cambio, or Money Exchanges, used to be the preferred method of exchanging currencies. However, since banks have gone online with the rest of the International community, these money-exchanging services have generally lost their appeal, and essentially offer convenience at a price. In major metro areas, there usually is a large Casa de Cambio that serves local merchants and offers favorable exchange rates. However, the small street-corner exchanges almost always charge a premium.
They have always made their money by setting their current exchange rates at a level that allows them to earn money on the transaction. Their services typically end up costing you more than it would to exchange your currency directly at a bank.
If you're in a pinch, you certainly can get a better rate from Casas de Cambio than you normally would at a local shop, but nothing usually beats a bank's rates. Banks set their own rates in relation to the International market, so don't be surprised to find differing rates between banks. It helps to shop around.
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Getting the bank's best exchange without waiting in a long line
If you've ever been to a Mexican bank, you know they are notorious for long lines and slow service. Hour-long waits are not unusual. If you have paper money in hand and need to exchange it, you'll have to wait in line, but if you just need to replenish your cash supplies with pesos, you're in luck.
ATM machines linked to the international banking network usually are easy to find, especially in tourist areas. Even some of the smaller towns have bank machines you can use to access your funds back home.
Provided that your home bank does not charge exorbitant extra fees for foreign transactions, you'll get the day's International Monetary Fund exchange rates by withdrawing pesos from an ATM machine using your credit card or debit card.
How to get cash in the foreign currency before you leave home
The impact of the Internet seems to touch all areas of life these days, and currency exchange is one of those venues. Through several web sites, you can actually order foreign currency charged to your credit card and have it delivered by express courier right to your home.
Using a service like this for at least part of your travel stash can be a great convenience, and free you from worrying about finding banks or ATM machines to stock up on pesos as soon as you cross the border.
Get important tips on using your ATM card in Mexico, along with information on home-delivery currency exchange services in '50 Things You Must Know Before You Travel to Mexico'. To download a copy of the e-book now, click here or you can buy a paperback edition through the Amazon.com link on this page.