One of the most asked questions is whether to pay in Dollars or Pesos or where to get the best exchange rates. Let's think about paying. If you pay in Dollars, the receiver has to exchange them somewhere for Pesos. Whether they are exchanged at a bank, cambio or with a friend, the Dollars will be discounted. The discount is the difference between the buy and sell rate. So paying in Dollars means the receiver gets less than you thought and gets to spend some leisure time exchanging the currency. Some service providers advertise or make offers in USD or CAD. Get a quote in both Dollars and Pesos. Chances are the Dollar offer will be based on a Peso costing 10 cents when its bank value is closer to 8 cents. That a big percentage to pay to use Dollars! (10 cents is 25% premium to 8 cents. 10÷8 = 2.5). In November 2012 CAD and USD were accepted interchangeably at the same value and discounted accordingly. There is no need for a Canadian to exchange CAD to USD for use in Mexico. CAD can be changed directly to Pesos to avoid an extra step exchange fee.

Some recommended tour operators in the area that accept USD and Pesos, are:

www.amstardmc.com

www.bestday.com

www.pricetravel.com  

Plan to pay everything in Pesos, especially tips.

Try to retain the smallest bills you can because often change is unavailable and you might end up giving more than planned. An example might be a 30 Peso taxi ride and the smallest you have is a 50 Peso bill. That's a big tip in a land that doesn't usually tip taxi drivers.

So, where is the best place to get Pesos? All airports have at least one ATM and HUX has two. Most major destinations have ATM's. ATM's will provide the best exchange rate. Use a bank ATM rather than a street or shop ATM as any fee will be lower. Check with your own bank about their fees for out of the country usage. They might have an affiliate or plan that reduces fees. The more you withdraw the smaller the fee will be as a percentage. For example a $5 fee on 5000 Pesos is just over 1%.

If you use credit cards you will receive the same good exchange rate as the ATM of the same day. Understand that some credit cards build in a foreign exchange fee just as some ATMs do. Some credit cards charge more than others so read your fine print.

Travellers' Cheques are getting more and more difficult to cash and will prove to be less convenient than ATM and credit cards.

A good idea is to leave home with enough Pesos to take a taxi or buy a meal and pick up the rest upon arrival.