Travelers’ checks, ATM machines or cash… Oaxaca, Money and Exchange: A Primer

articles Living, Working, Retiring

Alvin Starkman

A Voice from Oaxaca

Advice to heed before heading out the door to the airport, questions you’ll have after landing, and money issues that will arise in the course of your vacation

You don’t need to take travelers’ checks. ATMs are common, safe and reliable and, while pesos and American cash rule, a VISA card will get you through your trip to Oaxaca. But there innumerable other tidbits of advice to heed before heading out the door to the airport, questions you’ll have after landing, and money issues that will arise in the course of your vacation.

Getting ready for the trip


There are several ATM machines in the downtown core alongside almost every bank and even inside the odd pharmacy. Similarly, in the suburbs you’ll find no shortage of machines in banks and pharmacies, as well as freestanding kiosks, and even inside large department and grocery stores.

It’s best to go into your bank before your trip to confirm your weekly limit, maximum number of weekly withdrawals and amount you can withdraw per day, and to have it noted on your file that you will be using your card in southern Mexico. Increase your maximums if possible. While it is rare for a machine to “eat” one’s card, just as it happens infrequently in your hometown, it can happen here, and could take up to two or three days for you to get your card back. Accordingly, to be on the safe side, take an extra card with you or make sure your partner has his card. If you have both an ATM and credit card from which you can access your account, use the ATM card so that in the unlikely event of a problem, you’ll still have plastic for withdrawals and making purchases.

Credit Cards

Most establishments in the city accept credit cards, VISA being the most widely welcomed. Once again, as part of your pre-trip planning, contact your credit card companies and inquire and advise regarding the following:

  • 1) make sure it is noted that you will be making purchases out of the country;
  • 2) check your single purchase dollar limit and increase it if possible, perhaps for only the period of time you will be on vacation;
  • 3) ask how exchange rates will be calculated and if there is a surcharge, so you can make a more informed decision as to whether it’s more advantageous to use that credit card and increase the balance in your points program, or to use cash;
  • 4) if you intend to rent a car in Oaxaca, ask if your gold or platinum card will cover the rental car’s theft, damage, liability, and so on, and confirm the answer by reading the cardholder agreement’s terms, conditions and restrictions, all with a view to avoiding having to pay for such “extra” charges when you pick up your vehicle.

Remember that not all merchants, especially in the towns and villages where you’ll be buying handicrafts, accept credit cards, and often those who do so will charge a premium of up to 6% to cover their commission costs. Using a credit card may reduce your bargaining power significantly. Of course when dining at a small eatery or making purchases on the street, you’ll only be able to use American cash or pesos and, if you use American cash, you won’t likely get as good an exchange rate as you would through a conventional exchange house (casa de cambio) or bank.

U.S., Canadian or Other Cash

In Oaxaca, if you’re paying with foreign currency, make it U.S. dollars. However, Canadians, for example, should not feel the need to go out and buy yankee greenbacks. Years ago, things were different and it was difficult if not impossible to change our Canadian dollars into foreign currency while out of the country. We felt that the U.S. dollar ruled the world. Today, here in Mexico pesos are just fine and, more importantly, most of the casas de cambio offer competitive rates for Canadian dollars and other major currencies. There’s no need, and it’s not economically prudent, to pay to have Canadian changed into the USD and then, upon arriving in Oaxaca, again pay to exchange into a third currency. It’s true enough that while there are places that exchange only U.S. dollars, within about three blocks of the downtown central square (the zócalo) at least four casas de cambio can be found that exchange major foreign currencies. One word to the wise: do not bring foreign bills that have any rips, writing on them, or with ink stains or other stains. The rule of thumb at a casa de cambio is to reject all damaged or defaced foreign bills.

Travelers’ Checks

A more seasoned readership will recall always using travelers’ checks. But that was before the age of ATMs, PayPal and the realization that not everyone in a strange land is out to rob tourists. And besides, each of us had his trusty money belt. Many still “don’t leave home without it,” but often find making such transactions a bit cumbersome. There may be (but generally is not) a nominal premium charged for exchange, it takes time to get out that passport and have the data recorded on each check and, if you’re careful as you should be, the advisability of carrying them is reduced. Institutions will accept travelers’ checks, but often have to pay a commission for having them deposited into their Mexican peso accounts. They will generally be accepted at major retail outlets, hotels and B & Bs and in the craft villages at larger workshops, but there may be a small cost involved. Having stated this, often the retailer will be prepared to absorb any fees. Many Oaxacans in the tourism industry will simply hang onto travelers’ checks and then deposit them into U.S. dollar accounts they have in the States.


PayPal has revolutionized small scale, international, commodity and services purchase and sale transactions. The commission rate is modest, it’s an extremely safe and secure means by which to buy and sell, and it has its own safeguards to protect both sides of a transaction from the unscrupulous and the naïve. You may have used PayPal to make your deposit on reserving your accommodations, for a cooking school class or in arranging an ecotourism trek. Once you’re in Oaxaca, you can likely pay the balance owing in the same way, as long as you don’t mind the modest charges involved. The main additional advantage to PayPal is that money exchanges hands instantly. And even in the craft villages there are proprietors who either accept PayPal or have a colleague, relative or friend ready to assist in facilitating transactions for the purchase and sale of rugs, alebrijes, etc. (especially when a custom order is placed). PayPal is simply one additional payment method that has come of age in Oaxaca.

You’re now in Mexico

The rate for changing U.S. or Canadian dollars into pesos tends to be better for consumers at the airport in Mexico City than in Oaxaca, so do not hesitate to get started exchanging while awaiting your connecting flight to Oaxaca. In fact, the airport rates, at least in the past for changing Canadian dollars to pesos, have been better than when buying much larger quantities of pesos through one of the well-known U.S. or Canadian money exchange companies! The ground floor casas de cambio tend to offer more competitive rates than those on the upper level, but do your checking to ensure you are getting the best tipo de cambio.

Once in Oaxaca, remember that often the difference in exchange rates may be .03 of a peso, so consider the amount you want to exchange, and figure out if it’s really worth your time to spend a half hour to save $1.50. Think about how often you give a couple of pesos to someone on the street or to a cabbie when you get confused, or that extra dollar you throw away for a fancy coffee.

When planning to take a day trip to the villages in which you might be considering purchasing cotton textiles, painted clay figures, or other Oaxacan crafts, think about stocking up on cash the evening before touring. Otherwise, you may be in the awkward position of wanting to make a purchase and not relishing or being able to use a credit card, and asking your tour guide or another couple along with you to loan you cash until you get back to the hotel. It’s uncomfortable for all involved. Avoid the problem altogether and get your cash the day before. There are in fact ATMs in towns such as Etla, Tlacolula, Ocotlán and even El Tule, but do you really want to spend any time during your day searching for a machine, when you could be seeing the sights?

Remember you’re withdrawing pesos, so when you start punching in figures at the ATM, don’t stop at 500… it’s not dollars. Add another zero and then confirm the amount.

If you’ll be staying in any of the northern suburbs such as San Felipe, Reforma, Loma Linda, Volcanes or Guadelupe Victoria, driving south towards the touring highways and downtown you’ll likely pass at least three ATM machines. Downtown they are all over, along with the banks and casas de cambio. The latter are located within a couple of minute walk from the zócalo, on Independencia, Hidalgo, García Vigíl and Valdivieso. The banks, with competitive rates as well, are also located within a couple of blocks of the square.

If using travelers’ checks, always have some with you. After all, the reason you’re using them is the protection they afford. Then you can take advantage of the odd aberration in exchange rate you may encounter, which may be gone tomorrow. Similarly, take some cash with you wherever you go, for the same reason or for unexpected purchases.

Take Reasonable Care

Loss and theft generally occur when you’re not careful, and in circumstances where crowd density is high, such as lining up at Guelaguetza time, Saturday at the abastos market, Noche de Rábanos and Christmas eve in the zócalo, and in the course of parades and processions. Although it’s not hard to identify tourists, still, don’t flash large bills or wads, and keep large expensive cameras in a nylon shopping bag or in a purse in front of you. A thief is more likely to be attracted to a purse slung over your shoulder or a backpack trailing your spine, than to closed or zipped bags in front of you and cradled with one arm.

Oaxaca is no different than other popular tourist destinations with respect to safety and security for the traveler. Common sense and vigilance ensure an uneventful vacation in terms of avoiding problems regarding money and belongings. Due diligence in terms of a bit of reading before your trip will never hurt and, while here, simply remember that you are in a foreign land and that you do in fact stick out like a sore thumb. On the other hand, in the unlikely event that you encounter any difficulties of any kind, you’ll find that even complete strangers are more than willing to assist you in overcoming adversity, ranging from figuring out how to assist in facilitating a purchase or accessing money, to giving a wide variety of advice concerning other problems you might encounter as well as local mores and accepted custom.

NOTE: The foregoing is not intended to be nor should it be relied on by the reader as constituting legal, accounting, financial or commodity or service transaction advice, and is intended only as a lay opinion based solely upon the personal experiences of a Canadian who has been involved in small-scale monetary transactions in Oaxaca since 1991.

Published or Updated on: May 1, 2008 by Alvin Starkman © 2008
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