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How to avoid transaction fee when exchanging USD to Pesos?

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Valley of Heart's...
posts: 193
How to avoid transaction fee when exchanging USD to Pesos?

I read from TripAdvisor to NOT use USD to pay for taxi rides at ZIH airport as the exchange rate is much worse at only 10 pesos to $1US while the official is more like 12 pesos (when we went last summer, it was more than 13 Pesos to $1USD). However, our Credit Union would charge us $5/transaction to use ATMs not in the Cirrus system and there not seems to have 1 at ZIH. I'm just surprised how hard it is to change our USD to Pesos with the rate of 12 Pesos to $1US at ZIH (from the TripAdvisor article, most banks don't accept USD to exchange to Pesos). However, the TA article also said that using debit cards such as BoA to withdraw cash at ATMs affiliated with your banks won't incur any fee but that's not true because BoA charges 1% international transaction fee even if you use ScotiaBank ATMs as recommended by the TA article. If anyone has any recommendations on how best to exchange USD to Pesos at ZIH to avoid paying hefty transaction fees, I would greatly appreciate it. Thank you.

35 replies to this topic
Zihuatanejo, Mexico
Destination Expert
for Ixtapa, Zihuatanejo, Cabo San Lucas
posts: 8,108
reviews: 6
1. Re: How to avoid transaction fee when exchanging USD to Pesos?

I opened a Schwab account, and I have no ATM fees at all...they are all reimbursed, no matter how much they are. It is also NOT attached to any other account, savings, investments, etc.

Always make sure that an ATM is NOT attached to anything...you can get wiped out. Schwab works with you to set the amounts you want to help with the security of your card. I have no credit card use of my ATM on purpose, to keep down any attempted fraud.

I use this card ONLY in Mexico...and have established a secret amount with Schwab...they know that if any other amount comes into the security department...that they are to not do the transaction.

It is a pleasure to deal with a USA company, that has a call center in the USA, and who understand that some of us are trying to help keep fraud down.

Minnesota
posts: 4,396
reviews: 6
2. Re: How to avoid transaction fee when exchanging USD to Pesos?

Here is the article that I used to have posted in the questions section here on TA:

Money! Money! Money!

So now that you are heading out of the country (pick one) to Mexico, you need to think about how to exchange your funds to Mexican Pesos.

Yes, you have heard that a great deal of the commerce in Ixtapa/Zihuatanejo can be done in the good ol' U.S. Dollar.

To that I say PHOOEY! You are going to take it in the shorts on the exchange rate, and while you think it is such a small thing, here are some numbers for you to digest!

Should you choose to use the Dollar while in Ixtapa/Zihuatanejo, most businesses are going to give you an exchange rate of 10 to 1. With the current rate of exchange running right around 13 to 1 on the Dollar you are losing 3 Pesos on that exchange.

Big deal huh?

YES IT IS!

Extrapolate that out to $1000 U.S. worth of money exchanges, and you have just flushed around $3000 Pesos, or around $230 Dollars down the Porcelain Buddha! (at today’s rate)

In my world, that is the cost of an entire days fishing trip in Zihuatanejo. What is it in yours?

A high class dinner?

That pair of swanky sneakers that the yard monkey wanted?

Okay so maybe I have some of your attentions out there now, and you are wondering “fine, how do I go about not getting hosed?”.

Did I hear someone ask?

I think so, so here ya go!

ATM/Debit card!!

Yes it is just that simple.

Using your ATM/Debit card at the local ATMs will give you that days rate of exchange. Be it 13 to 1, or like we experienced in March of 2009 15.7 to 1 !!!!!!

We had funds to frolic with!!!

Here are things you need to be aware of:

1, Your banks fees for International Exchange. Some have none; some have rates that will need you to make the maximum daily withdrawal since they are charged on a per transaction basis.

2, Do Not Use A Cash Withdrawal From A Credit Card! The fees and interest will kill you more than a 10 to 1 exchange rate!

3, The first of the local ATMs that you can find are right there at the Zihuatanejo Airport just outside of Customs. Hit the ATM first BEFORE you purchase a Taxi Ticket! Do you want to pay $32 US for the Taxi or $320 Pesos?

4, If you cannot, or do not wish to troll the boards for ATM locations, simply ask at your hotel’s front desk for directions to the nearest ATM. (in Ixtapa there is a nice mini-bank/24 hr ATM right between the Dorado Pacifico and the Emporio hotels on Ixtapa Blvd.)

5, Traveler’s Checks!! While great for Emergencies are a pain in the hinder to have cashed in the area. The local banks of late are requesting a Passport to cash them, and they need to be filled out EXACTLY as the name on the Passport. In Emergencies they can be cashed at most of the hotel’s front desks but there again, you will get hit with a reduced rate of exchange. (yes I always bring them, and deposit them when we return, as my bank issues them for no fee)

6, Some of, not all, the local banks are now declining to exchange U.S. Dollars for Pesos for walk in clients (meaning no account there, no exchange) leaving you at the mercy of a reduced rate of exchange elsewhere if you decided to travel with cash.

Have A Great Trip!!!

I hope that this has been helpful, and that it gives you that much more pleasure in your trip!!

Keith

Traverse City...
posts: 316
3. Re: How to avoid transaction fee when exchanging USD to Pesos?

For B of A it is Santander NOT Scotia Bank

Valley of Heart's...
posts: 193
4. Re: How to avoid transaction fee when exchanging USD to Pesos?

WOW! THANK YOU everyone for your help and for educating me. We've been to Cancun and Mexico City before and have never had problems with using USD or exchanging USD to Pesos as in Ixtapa (the way I read it from the TA article). I will have to read through Keith's detailed response to digest all the advices but THANK YOU for helping us.

Valley of Heart's...
posts: 193
5. Re: How to avoid transaction fee when exchanging USD to Pesos?

Thank you Mextrav46 for correcting me. I only used that info from the article posted on TA:

tripadvisor.com/Travel-g153445-c142895/Ixtap…

So perhaps a Mexico expert should correct the statement in the article that BoA charges no transaction fee if using their debit card at Scotia Bank. I called BoA and they confirmed that for Mexico it's Banco Santander and for Canada, it's Scotia Bank which made sense to me.

Also, Keith, I read through your very informative post and unfortunately, if I use BoA debit card to withdraw money at the ATM at the airport, even if that ATM is from Banco Santander, I won't have to pay the $5 transaction fee but still pay a 1% international transaction fee imposed by either VISA or MasterCard. The only exception would be to find a Cirrus ATM as our credit union won't charge any transaction fee.

Can I pay for taxi ride with credit card? Our Capitol One credit card won't charge any foreign transaction fee either.

Thank you.

Bay Area
posts: 193
reviews: 597
6. Re: How to avoid transaction fee when exchanging USD to Pesos?

Hint: if you decide to exchange U.S. dollars to pesos at a Mexican bank, bring a COPY of your passport to give the bank along with your cash.

Valley of Heart's...
posts: 193
7. Re: How to avoid transaction fee when exchanging USD to Pesos?

Thanks Rosquete.

Zihuatanejo, Mexico
Destination Expert
for Ixtapa, Zihuatanejo, Cabo San Lucas
posts: 8,108
reviews: 6
8. Re: How to avoid transaction fee when exchanging USD to Pesos?

I think what Rosquete meant to add...bring your original passport...and the copy...then the bank will keep the copy to attach to the transaction that was done. It is really irritating to see a copy machine right there in the bank, yet the bank clerk smiles at you and tells you to go down the street to get a copy made. No service, but you got a smile.

Things are done differently in all parts of Mexico. Guerrero being one of the states with lots of drug trafficking is one of the reasons that it is harder to do financial transactions...Mexico government/banking seems to think that by slowing down the exchange of USD that will help!!! (It did...it stopped tourism..no cruises, no planes...it worked!!)

Edited: 11:01 am, July 02, 2013
Zihuatanejo, Mexico
Destination Expert
for Ixtapa, Zihuatanejo, Cabo San Lucas
posts: 8,108
reviews: 6
9. Re: How to avoid transaction fee when exchanging USD to Pesos?

WanderlustNikki--I just made that correction...thanks for helping.

Valley of Heart's...
posts: 193
10. Re: How to avoid transaction fee when exchanging USD to Pesos?

Hi TravelJudy, thanks for explaining further what Rosquette had meant because I certainly misunderstood her. But now I am really confused. Are you two saying that for us to exchange our USD at a bank for Pesos, we not only need to show the bank our original passport but also GIVE them a COPY of our passport to keep as well? WOW! I certainly didn't know that. We always make copies of passports to bring along just in case our original got stolen but this is new. I didn't know we have to GIVE the banks our copies each time we need to exchange money. How cumbersome like you said! We were irritated when everywhere we drove in Italy, we had to be extremely careful not to accidentally drive into their forbidden ZTL in each town and now this, in Ixtapa? (sigh!)

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