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 accepted widely at most larger hotels and restaurants. However, you should carry some cash wherever you go, as many small venues won’t take cards.
It’s an excellent idea to carry pesos. If you’re going to a big tourist city like Cabo San Lucas or Cancun, you can often use US dollars — but the local merchants are likely to give you poor exchange rates.
- Bottom line: Take your credit card for the convenience, but carry cash just in case you can’t use plastic.
Magstripe and chip credit cards
In the United States, we’ve been using magnetic-stripe (or “magstripe”) credit cards for years. Only recently have we started the transition to microchip-embedded cards. What you may not know is that many countries around the world have already adopted these chip cards. We’re simply catching up.
In Mexico, chip cards are the standard. You can use a magstripe card at many locations, but you may run into merchants who will only accept chip cards.
It’s a good idea to get either a chip-and-PIN or a chip-and-signature card before traveling.
- With a chip-and-PIN card, you insert your card and enter a PIN (personal identification number) to complete your transaction.
- With a chip-and-signature card, you complete your transaction with your signature.
Chip-and-PIN cards are becoming the norm around the world, so you may want to upgrade to one eventually. However, a chip-and-signature card should be widely accepted during your trip to Mexico — you’ll simply sign your receipt when prompted.
Should I use my credit card to get cash?
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.
It’s best to use a debit card at an ATM. That’s because your credit card will probably charge a cash advance fee when you withdraw money. Further, you’ll immediately start accruing interest on the amount you withdraw. You may still pay ATM fees when you use your debit card, but at least you’ll avoid paying interest.
What is a cash advance fee?
A cash advance fee is assessed when you withdraw cash from your credit card. It’s usually the greater of a flat fee or a percentage of the transaction. For example, the cash advance fee for the Chase Sapphire Preferred is either $10 or 5% of the amount of each transaction, whichever is greater.
To avoid ATM fees, look into the popular Schwab Bank High Yield Investor Checking Account. You can use your debit card for withdrawals, and you’ll be reimbursed for any fees you incur.
Make these preparations before leaving for Mexico
Before you leave for Mexico, make a few arrangements to ensure you can use your card without a hitch.
- Get a credit card with no foreign transaction fees. Many cards will charge a 3% fee when you use your card abroad, but some cards will waive that fee. The best travel cards — such as the Chase Sapphire Preferred, Barclaycard Arrival Plus and American Express Platinum Card — charge no foreign transaction fees.
- Highly consider getting a Visa, Mastercard or American Express. They’re more likely to be accepted abroad. American Express is especially well regarded among those who frequently travel to Mexico.
- Give your card provider a heads-up. Your card company hates fraud, because it loses them money. So if they see 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 traveling to Mexico.
- Know what number to call if you have problems with your card while traveling. Your card might get stolen while you’re traveling, or you could lose it. In these cases, you’ll want to know the right number to call to get a replacement. Ask your provider for a Mexican phone number you can dial in a pinch.
- Know where you’ll get cash once you arrive. Even if you have a credit card, it’s smart to have cash on you. 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.
You’re just about ready to leave for Mexico. Before you take off, however, have answers to these questions:
- Which credit cards will I take? Consider bringing at least two, preferably chip cards that don’t charge foreign transaction fees.
- Have I made preparations with my card provider? Keep your card provider in the loop, and know what number you’ll call if you run into trouble abroad.
- What’s my plan to get cash? Have a debit card ready, and know which ATMs you’ll get cash from.
Once you’ve made these arrangements, you’ll be all set to use your credit card in Mexico.