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Checking bankcard, credit card or debit cards can all be used to obtain pesos, and ATM machines can be found at every bank, in or near many supermarkets, in shopping malls, grocery stores and occasionally in hotel lobbies. ATMs are linked to Cirrus, Plus and other major International networks, and are available 24 hours a day.
Credit cards are often the cheapest way to pay in Mexico, particularly cards like Capital One that have 0% forex fees. However, it is advisable to call bank and credit card companies prior to a trip to inform them of the locations where the card may be used to prevent a fraud alert and possible deacctivation of the card. Chase and Capital One websites have an online travel advisory function.
If you need cash, the best exchange rate is obtained by using an ATM to withdraw money from your home bank using a debit card -- much better than exchanging cash or travelers' checks at a bank. Most ATMs have options for English and Spanish, but the money amount will always be shown in Mexican pesos. As of Dec 2011, the exchange rate is around 13 pesos to USD $1. So if you withdraw 1000 pesos from an ATM, your bank will deduct $77USD from your account. In Northern Mexico and some tourist areas, some ATMs also offer U.S. dollars; Banorte and HSBC are two banks with this option at many of their ATMs.Most USA banks charge a "foreign ATM withdrawal fee" of $1-5 per use. Many also charge an additional foreign exchange fee of 1-3% of the amount withdrawn. Bank of America is a major exception - they charge $0 + 0% for withdrawals at Banco Santander (or Santander Serfin) ATMs only. Some banks in Mexico do not charge an additional fee for ATM usage. For those that do, it commonly ranges from $29 - $33 pesos per transaction (as of Dec 2011). The ATM announces the fee before the transaction and you must approve the fee before you can commence with your transaction. The fee is deducted in the transaction by being added to the amount charged to the account rather than charged separately to the account. In the transaction detail it will be called an ISF charge. (Banamex and Bancomer charge $29 MXN pesos and Santander Serfin charges $33 pesos.)
Credit card cash advance - Most ATMs will also accept a Visa or MasterCard (with a PIN number) for a cash advance withdrawal. But this is an expensive way to get cash as you will pay your bank a cash advance fee (often 4%) plus a forex fee (often 3%) plus interest from the date of withdrawal! If you do not know the PIN number for the credit card you cannot get it while you are in Mexico. Credit card companies will only send a PIN number via the mail to the billing address of the credit card and will only give it on the phone when called from the registered phone number at the billing address. So remember, no PIN number = no money! Most ATMs in Mexico (and most of the world) only accept four (4) digit PIN numbers, this includes debit cards and credit cards. If you do not have a four-digit PIN number, it is advisable to speak with your bank before traveling.
Credit card foreign exchange fee - Any use of a credit card internationally normally includes a 1% forex by the Visa/MasterCard clearinghouse, no matter what country and which bank's card is used (except for certain cards discussed below). Most people are unaware of this fee. It is imposed at the currency exchange level as part of the transaction. But in addition to the clearinghouse fee, many issuers charge an additional 2% fee for international credit card transactions. Check with your bank to find out it's fees. At this time (August 2011) all Capital One cards, Chase co-branded Marriott, Hyatt and British Air, and a couple of high end Amex and Citibank,cards charge 0% (they even eat the 1% visa/mc fee). American Express charges a 2.7% fee for international transactions for most cards. It is a good idea to bring more than one credit card and from different issuers in case one sets off a fraud alert.
For safety, stick to ATMs in or attached to bank branches. There have
been instances of phony ATMs or ATM facades put up in non-bank
locations to harvest card numbers and personal ID codes (this applies to
the U.S. too!). Cloning is a growing problem. Credit card
cloning has become an epidemic world wide, and can wreck a vacation.
Make sure to keep an eye on the credit card during all transactions, or
pay the cashier directly. Many restaurants will bring a handheld
scanner to your table so that the card is never out of your sight. It
is not the carbon sheets or the receipts that are of issue; it is the
actual card and a cloning machine. Therefore, when using ATMs it is also
advisable to cover your hand when inputting the PIN number to protect
the PIN from being discovered by a potential hidden camera where cloning
may be a danger.