7. Cash, credit, ATM tips
You can pay with a credit card in almost all tourist facing places. Whether it’s excursions, restaurants or shops, they usually have this option available. However, I’d still recommend bringing some pesos, because smaller, local places are cash only. Mr. Taco – my favorite taco place, is an example. It’s also usually going to be cheaper to pay in pesos than in USD, because of the conversion rate.
You should also be wary when taking money out of an ATM. If you’ve read my Tulum travel guide, you’ll be familiar with this, but if you haven’t, make sure you pay attention, because this can save you so much money in fees.
First off, when taking money out, the process is reverse compared to the USA. In general, you put your card in, make your choice, receive the card back and after that – get your cash. In this way, people are much less likely to forget anything. But in Mexico, the order is reversed – you first get your cash, and since you got the cash first a lot of people will put their cash away and walk away. So make sure that after collecting your money, you always double-check if you got your card too, because this makes it so easy to forget, which can easily cause you immense stress. (Always bring a backup credit/debit card and keep it in a safe spot separate from your main credit/debit card.)
Another thing to mention, I had an annoying situation once where I went to an ATM to get some cash, and due to not paying enough attention, I accidentally withdrew $800, instead of 800 pesos. This caused me to be worried all night as I ventured back to my accommodation, because I was carrying so much cash with me. The other drawback is the huge transaction fee that came with withdrawing all of those US dollars – it was 7%. Luckily, my Charles Schwab Credit Card refunded these charges, so I got the nearly $60 fee back.
On one of the last steps when withdrawing any amount, the ATM will ask you if you want to accept their conversion rate. This is never in your favor, so I recommend that you decline when you see this question pop up on the screen. Just this alone can easily save you up to 10%. Make sure you pay attention to it, because it can make a huge difference. Once you decline, the ATM will use your home bank’s conversion rate, which will be much better for your wallet. Just make sure you decline the conversion rate, and not the ATM fee, which is the previous step of the process. As a rule of thumb, even if venues accept USD, always have pesos on you, because otherwise you’re going to get an unfavorable exchange rate.