Currency exchange in Mexico and the Caribbean

[Jammer]

I am recently back in the USA after a (non-sailing) trip to Mexico.

While we were able to use credit cards (chiefly American Express with a 2.7% fee) for many payments, obtaining currency was problematic and expensive.

At the only foreign currency exchange window in the USA airport from which we departed, they charged a 15% spread plus a $10 transaction fee for amounts below $500, to exchange USD for MXN. Foreign exchange windows in the airport in Mexico offered similarly usurious rates.

There were long lines at ATMs in the airport where we arrived in Mexico (wait over 45 minutes), so we skipped those.

Withdrawing MXN from an ATM at a bank in Mexico we were charged a combination of spread, fees, and taxes totaling around 6%. The ATM did not offer the option to debit the funds in MXN, which is usually what is recommended to get the best rate.

My local (USA) bank offers foreign currency services that also have a spread and fees of around 6%.

Transferwise, often recommended for foreign exchange, offers a lower foreign exchange fee (0.6%) than American Express, but it isn't clear if it provides meaningful benefits for obtaining cash.

While it has been some years since I have traveled extensively outside the USA, I don't remember fees being significant in the past. Years ago we used travelers' cheques which had a 1% fee at the time of issue and could typically be redeemed with about a 1% spread. Maybe I misremember, but I think the world has changed.

We did find that there were a number of situations where credit cards were not accepted and US$ were not necessarily welcome (or were accepted at a 20% spread). These included one (nicer but local) restaurant, tips, and local taxis. We were in a more rural area.

Any advice?

[donradcliffe]

Get a Schwab account and ditch the bank.

Do not exchange any money at the airport or tourist areas.

Use the ATMs at the bigger banks.

Withdraw larger amounts, say USD400 at a time.

Remember its Mexico, and things don't always work every day.

[Cheechako]

I used to go to the actual bank to exchange.
I never ran into a fee on greenbacks. They preferred them actually.
I guess those days are gone?

[Celestialsailor]

I was there, cruising, 2013-2016. Never had too much problems at the well know banks. Like mentioned above...not all the ATM's in those banks worked. Nor did they care. And yes, there is a fee for everything there.

[PaulSommers]

As donradcliffe said, open a Schwab account. You open an investment account with maybe $50 or $100, and ask for a checking account. Withdraw money from the checking account anywhere in the world - Schwab rebates the ATM fees at the end of each month. It is easy to transfer money into the Schwab checking account from your regular bank if you don't want to switch completely to Schwab. Been doing this for 10 years in various countries, mostly Mexico. In Mexico, look on-line to find the best exchange rate among the various banks. Small towns may not have banks, and many small local shops are cash only - solo efectivo!

[shimari]

At places that accept credit cards, you're better off with a good card that doesn't charge fees. The exchange rates are typically better than ATMs.

We're in Mexico now and have used Chase and AMEX cards. Only one place tried to charge an extra $5, and we said no. They said ok no problem....YMMV.

[mvweebles]

Jammer - guessing that at an ATM you received a page similar to the one attached describing the bank's exchange rate and their commission (this happens to be Banorte, but they have all moved to this same protocol). DECLINE this page and you will be issued pesos based on your bank card's exchange rate. I too use Schwab and they reimburse ATM fees and have no foreign transaction fees. Exchange rates are okay.

Not sure when this started. I have travel to Mexico several times a year. Last 2-years have spent more time in Mexico than US. But I was scarce during Covid and this popped-up when I returned.

I've had problems with credit cards being skimmed in Mexico and getting shut-down, which is a pain to replace. I prefer cash. The larger Mexican banks (Banorte, Banamex) seem to have the best exchange rates for ATM. The further into Mexico you go, the worse the exchange rate.

WISE (ex TransferWise) issues a debit card that allows spending in Mexico in pesos at close to the spot-rate.

[wholybee]

I use a credit union. I just withdrew cash in the local currency from an ATM. Sometimes the ATM will ask if I want to convert USD to the local currency, and I select NO. (so that my credit union handles the exchange). As a bonus, my credit union also refunds the ATM fee. So, right after the withdrawal, would be a small deposit from that refund.

[Jammer]

Originally Posted by mvweebles

Jammer - guessing that at an ATM you received a page similar to the one attached describing the bank's exchange rate and their commission (this happens to be Banorte, but they have all moved to this same protocol). DECLINE this page and you will be issued pesos based on your bank card's exchange rate. I too use Schwab and they reimburse ATM fees and have no foreign transaction fees. Exchange rates are okay.

Not sure when this started. I have travel to Mexico several times a year. Last 2-years have spent more time in Mexico than US. But I was scarce during Covid and this popped-up when I returned.

I've had problems with credit cards being skimmed in Mexico and getting shut-down, which is a pain to replace. I prefer cash. The larger Mexican banks (Banorte, Banamex) seem to have the best exchange rates for ATM. The further into Mexico you go, the worse the exchange rate.

WISE (ex TransferWise) issues a debit card that allows spending in Mexico in pesos at close to the spot-rate.

Attachment 273466

Yeah that's exactly what I was dealing with but if you tried to decline the exchange it canceled the transaction. Several people ahead of me in line walked away in disgust after fighting with it and losing. I was in a rural area on the west coast.



I share your preference for cash for small transactions due to the prevalence of skimmers and the difficulty of card replacement while traveling.