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Using a credit card in Mexico
Get the lowdown on how to pick the best credit card for your trip to Mexico.
If you’re heading to Mexico, you might be wondering whether you can use your credit card there. Fortunately, the answer is yes.
Credit cards are widely accepted at most hotels, restaurants and shops in touristic areas and big cities, however, there are still many towns and villages that operate on a cash-only basis. While you can anticipate using your credit card frequently, you should always carry some cash wherever you go – as many small merchants won’t take cards.
If you use your credit card in Mexico, you could incur the following fees:
- Foreign transaction fees. When you spend on your credit card overseas, you will be charged a fee of around 2.5% to 3% of your transaction cost. Known as a foreign transaction fee, this charge can be avoided with a credit card that charges no foreign transaction fees.
- Currency conversion fees. A merchant might offer you the option to pay in Canadian dollars instead of Mexican pesos. This is known as a dynamic currency conversion (DCC) and it usually has higher fees and a double exchange rate. Always pay in Mexican pesos instead of Canadian dollars.
Can I incur both fees on a single transaction?
Yes, you can be charged both foreign transaction fees and currency conversion fees on a single transaction. Avoid this by getting a card with no foreign transaction fees and always decline paying in Canadian dollars if offered.
Are American Express credit cards accepted in Mexico?
American Express cards are widely accepted in some parts of Mexico – but not as much as Visa or Mastercard. If you want to use your Amex card in Mexico, it’s best to also travel with a Visa or Mastercard in case your Amex is not accepted.
Avoid using your credit card to take out cash since you will be charged a withdrawal fee and interest on the total withdrawn amount. Unlike purchasing an item on your credit card, cash advance interest is charged from the day you withdraw the cash – there is no grace period. Only use your credit card to withdraw cash in an emergency situation.
It’s easy to get cash in Mexico as ATMs are widespread. Still, consider getting cash only from ATMs at bank branches, where you’re less likely to become a victim of fraud. Using your debit card to withdraw cash will help you avoid the cash advance interest rate that comes with a credit card, however you may still incur an ATM fee. To avoid the ATM fee, consider getting a debit card from a bank that has a widespread network of global ATMs. A global alliance of ATMs allows you to withdraw money from specific ATMs without incurring a fee.
Many merchants will also accept US dollars, especially if you’re in big tourist cities like Cabo San Lucas or Cancun, but the local merchants are likely to give you poor exchange rates — so it’s best to avoid paying with USD unless necessary.
What is a cash advance fee?
A cash advance fee is charged when you withdraw cash using your credit card. The fee is usually the greater of a flat fee or a percentage of the transaction. For example, you could be charged $10 or 5% of each transaction, whichever is greater.
It’s generally safe to use a credit card in Mexico. However, you should always try to:
- Use an ATM inside a bank. If for some reason your card gets stuck in the ATM, you can quickly get it back. Also, it’s less likely that an ATM in a bank has card skimming devices attached to it. If the buttons on the ATM are hard to press or you’re having a hard time inserting your card, there may be a skimmer on the ATM. If this is the case, immediately cancel your transaction.
- Take two credit cards. A second card can be useful if one card doesn’t work with a certain merchant, you lose your first card or if one card gets blocked by your bank. That way, you won’t be left without money. Consider bringing at least one credit card that charges no foreign transaction fees.
- Keep your card in sight at all times. To avoid card cloning, make sure you keep an eye on your credit card whenever you use it to pay. In addition, keep it close to you at all times to avoid it being stolen.
Before you leave for Mexico, make a few arrangements to ensure you can use your credit card without a hitch.
- Get a credit card with no foreign transaction fees. Many cards will charge a 2.5% to 3% fee when you use your card overseas, so be on the lookout for cards that charge no foreign transaction fees.
- Give your card provider a heads up. If your bank or credit card company sees a foreign transaction on your card, they may put a hold on your account for suspicious activity. To avoid this, give your provider a quick call letting them know you’ll be travelling to Mexico.
- Keep phone numbers handy. Your card might get stolen while you’re travelling, or you could lose it. In these cases, you’ll want to know the right number to call to get a replacement card.
- Know where you’ll get cash once you arrive. Many merchants in Mexico still accept only cash, so it’s smart to have cash on you at all times. So you don’t waste time or money, plan out beforehand where you’ll get your cash. Check if your bank has international partnerships that allow you to use some ATMs for free.
How to use a credit card in …
Credit cards are widely accepted in Mexico, especially in most hotels and restaurants, as well as touristic areas. However, some of the smaller merchants in towns and villages may accept only cash. Since you’ll likely need to make cash withdrawals, consider getting a debit card that charges no ATM fees when you withdraw money internationally.
When considering which credit cards to take on your trip, opt for a credit card that charges no foreign transaction fees. In addition, decline paying in Canadian dollars when offered to avoid paying currency conversion fees.
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