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Making Your Dollars Work Harder In Cabo

Date Published:

Now that the holiday period is in full swing, how do you make your hard-earned dollars go even further when you are in Cabo? One way is to be smart with your money and get the most bang for your buck!

Ten years ago you could count on an exchange rate of ten to one. Just take a zero off the peso price. Easy math. Not so any more. The exchange rate fluctuates between 12 and 14.60 (rate as at today) and even that can change rapidly. What does the higher exchange rate mean? You get more pesos for your dollar now than you did ten years ago. Don’t get too excited though, in most cases prices in pesos have risen to match. So the question remains, a question that befuddles many a Cabo visitor: Should I pay with dollars or exchange them for pesos? The simple answer? Yes!

Almost all establishments in Cabo will gladly take your money in whatever form you’re willing to spend it. Whether you’re shopping at Walmart or Mega or Costco, dining at a fine restaurant or a simple taco stand, filling up the tank on your rental car or paying for a taxi to town, no one will turn away your dollars. But don’t be surprised if you get a different exchange rate in each case. Not so simple after all? I know. It’s hard enough to do the math on the exchange without having to guess what the rate will be.

The rule of thumb is this: You’re always better off spending pesos. You will get a little more for your money, but in most cases it’s really not a huge difference. Many Cabo vendors take your dollar at a fair exchange rate so if you only have dollars, don’t stress. Remember, you’re on vacation!

First things first. Don’t ever exchange money at the airport unless you really, truly have to. You can’t possibly get a worse exchange rate anywhere in Los Cabos. Book your airport shuttle before you fly down. Contact your resort, prepay, and eliminate the need for pesos. Even if you haven’t booked transportation in advance, you really can’t get a worse rate from a shuttle or taxi driver than what they give you at the airport exchange window.

Plan on stocking the kitchen in your timeshare suite? Walmart, Mega or Costco will be in your future. All three take dollars and give some of the best exchange rates in town, but there are limits (usually $250 US) thanks to new anti-money-laundering laws covering all of Mexico. Costco will give you pesos as change if you spend dollars, an added bonus if you want a few spare pesos in the wallet. Walmart, however, isn’t so happy to give change in pesos so expect to get change in dollars when paying in dollars.

Once you arrive at your resort, you will find that you can pay for most things in dollars or pesos. Many resorts will even exchange dollars for a small commission. Restaurants in town will accept either currency as well, but rates may vary from one restaurant to another. They can charge any exchange rate they want, so you’re at their mercy. They do want your business so it won’t usually be too bad. If the bank exchange rate is around 13, then an exchange of 12 or 12.50 is common, but don’t leave yourself open to a surprise exchange rate of 11 or worse. If you don’t see it displayed, ask. Many restaurants will also calculate your bill in both dollars and pesos so you can choose, and it doesn’t matter when leaving a tip. Money is money and servers here work on tips just like they do back home. Just don’t leave US coins, they are worthless here.

Now that we’re talking exchange rate, how do you figure it out? It’s as simple as Google. Type in “exchange rate”, choose US Dollar and Mexican Peso, and voila! It will even do the math for you. Just remember that wherever you exchange or spend those dollars, you will get a little less than the actual rate. (If you’re flustered by math, just hang in there for a little bit longer.) For each $100 US Dollars you exchange at a Mexican bank you will get about 25 to 35 pesos – or two bucks – less. Don’t forget your passport or they won’t take your dollars. If it’s mid-day, payday on the 15th or 30th of the month, or tomorrow is a bank holiday, expect a long line. Believe it or not, Costco and Walmart give an exchange rate equal to or even slightly better than the bank. Exchanging pesos at your resort is the most convenient, but they will take a larger commission than the bank, probably about 60 to 70 pesos per $100 dollars, about five bucks. Restaurants, as already discussed, are likely to be 50 to 100 pesos off, about 4 to 8 dollars per $100. Many of the gas stations in town are even lower, off by about 75 to 150 pesos per $100 US, or approximately 6 to 12 dollars.

You might think it best to avoid paying by credit or debit card because your card will charge an international transaction fee, usually 3%. But the benefit is that you get the exact exchange rate. Per $100 that is a loss of three dollars, in line with or better than the other exchange rates mentioned. The same applies to ATM machines, so despite small ATM usage fees, they are still one of the best and most convenient ways to get pesos to spend around town. In case you were wondering, no, you can’t get dollars from an ATM in Mexico. Final tip: don’t forget to tell your bank or credit card that you will be in Mexico, or your card is likely to be blocked.

So if you’re overly analytical (like me, in case you hadn’t noticed), now you’re armed with enough information to figure out the exchange rate six ways to Sunday. If you’re not, don’t freak out. Spend what you want and enjoy your trip. It’s not likely to make that much of a difference as long as it is close to the rate you checked on Google.

By Brian Florky

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