Cash And Credit Cards

Baja used to be an entirely cash-based economy. Everything from taco stands to gas stations required payment in pesos (or sometimes US dollars). 

Now there are far more places that accept credit cards – though it is important to note that you should not expect all vendors to accept credit cards.

Cash is still king in Baja. But getting cash from an ATM can be a bit frustrating and costly, depending on where you are, what bank ATM you use and what your home bank is. 

We have found that a general principle for taking money out of an ATM is that you will receive more favorable exchange rates and lower fees the further you are from the border and outside of smaller towns. 

For example, our favorite town in Baja only has one ATM in town. As such, there are strict limits on how much money you can withdraw at one time. Not only does this seem to change from week to week, but also the ATM was known to run out of money quite frequently. 

Further, exchange rates were not favorable, often around 7-10% less than what it should be AND the ATM fees were around $8 USD whether you were taking out $20 or $400 USD in pesos. 

On the other hand, when you walk into Wal Mart or Soriana (a large chain grocery store) in La Paz you will be greeted by a wall of 3 or 4 different ATMs from which to choose. The exchange rate for each is similar and nearly the posted rate for the day. 

And the ATM fees were around $2 USD per transaction with much higher daily limits. They were never out of money and, depending on your bank’s daily limits, you could go from one ATM to the next to withdraw cash if you needed. 

Check with your bank before you travel to Baja to confirm any special conditions, rates or fees associated with using your debit and/or credit cards in Mexico. 

We found that the bank we use for our daily needs in the US, one of the biggest national banks in the US, offers very unfavorable exchange rates and tacks on “foreign transaction fees” whether you spend $1 or $1,000 USD. 

Knowing this in advance has saved us hundreds, if not thousands, of dollars in unnecessary fees because we found a different bank to use when we travel in Baja.

EXPERT TIP: We have both a Capital One and Charles Schwab checking account for our international travel. Capital One offers competitive exchange rates at ATMs and with credit card purchases with no additional foreign transaction fees. However, it does not reimburse the ATM fees incurred at the ATM. On the other hand, Charles Schwab offers comparable rates with no foreign transaction fees AND they reimburse the ATM fees at the end of each month. After years of international travel we find that Charles Schwab is the best overall bank for travelers. We use Capital One to purchase fuel, groceries, tours and other big-ticket items when possible and Charles Schwab for taking out cash at ATMs.

Contact us directly if you are interested in opening a Capital One account. We’ll send you a link where you can quickly open an account and credit card with a $200 cash bonus!