Mexico's currency is the peso, but US dollars are widely accepted throughout Los Cabos. You'll get the best exchange rate paying in pesos — pull them from a bank ATM rather than exchanging at the airport or hotel. Credit cards work at resorts and restaurants; carry cash for tips, taxis, and small vendors. ATMs are everywhere in tourist areas.
Money in Los Cabos is straightforward: Mexico's currency is the peso, but US dollars are accepted almost everywhere in the tourist corridor. The trade-off is exchange rate — you'll lose 5-10% paying in dollars. The smartest approach is to pull pesos from a bank-affiliated ATM for cash purchases, use a no-foreign-transaction-fee credit card for hotels and restaurants, and keep a small stash of $1 and $5 bills for tips. This guide covers currency, cards, ATMs, and how to avoid the worst exchange rates.
Mexican Peso Basics
The Mexican peso (MXN) is the local currency, and you'll see prices throughout Cabo in both pesos and dollars. The exchange rate fluctuates — in recent years it's ranged from 17 to 22 pesos per US dollar. Locals think in pesos; tourists often think in dollars. When you pay in dollars, merchants set their own exchange rate that's almost always worse than the bank rate — typically 2-5 pesos per dollar worse. For small purchases, that's pennies; for a $200 dinner, it's $10-15 lost. Paying in pesos avoids this "tourist tax." Coins come in 1, 2, 5, and 10 pesos; bills come in 20, 50, 100, 200, 500, and 1000. Carry small bills and coins — taxis, street vendors, and tip jars all need them, and breaking a 500-peso note at a corner store can be a hassle.
US Dollars in Cabo
US dollars are accepted at virtually every hotel, restaurant, tour operator, and shop in Cabo's tourist corridor. This is one of Cabo's conveniences — you can travel without ever exchanging money, and many resorts quote rates in dollars. The catch is the exchange rate. When you pay in dollars, the merchant sets the rate, usually 2-5 pesos worse than the bank rate. Some merchants offer a fair rate; others, especially smaller shops and beach vendors, offer a poor rate. For a $5 taco, the difference is negligible. For a $150 dinner or $80 tour, you're losing $5-15 per transaction. The smart move: pay in pesos for anything under $50, and use a credit card with no foreign transaction fees for larger purchases. Always carry some US cash for tips, since service workers appreciate dollars and they're easy to deal with.
Credit & Debit Cards
Visa and Mastercard are accepted at virtually every hotel, restaurant, and larger shop in Los Cabos. American Express works at most upscale venues but is less common at smaller establishments. Discover is rare. Use a card with no foreign transaction fees — most travel credit cards waive this, but many standard cards add 3%, which adds up over a week. When the card terminal asks whether to charge in dollars or pesos, always choose pesos. The "dynamic currency conversion" that lets you pay in dollars almost always offers a worse rate than your card issuer's rate. Debit cards work for ATM withdrawals but aren't widely used for purchases. Always notify your bank of international travel before you fly, or your card may be declined for fraud. Save receipts and check your statement after the trip — credit card fraud does happen in Mexico, though major resorts and tour operators are generally safe.
ATMs & Cash Withdrawals
ATMs are everywhere in Cabo's tourist areas — at the airport, resorts, OXXO stores, banks, and shopping plazas. Bank-affiliated ATMs (Banamex, BBVA, Santander) offer the best exchange rates and lowest fees. Standalone ATMs in convenience stores and hotel lobbies often charge $5-8 per withdrawal plus a poor exchange rate. Avoid ATMs in nightclubs and on the street — they're skimming targets. Withdraw larger amounts less often to minimize fees — 3000-5000 pesos at a time covers a few days. Check with your bank before travel about partner banks in Mexico that waive ATM fees. Bank of America partners with Santander; other US banks have similar arrangements. Always decline the ATM's offer to "lock in" a dollar amount — choose to be charged in pesos for the best rate. If an ATM looks tampered with or asks for unusual information, walk away. Carry backup cash in case your card gets declined or eaten.
Currency Exchange
Currency exchange booths (casa de cambio) are common at the airport, in downtown Cabo San Lucas, and in San José. They're convenient but offer worse rates than bank ATMs — typically 3-5% worse. Use them only for small initial amounts or to convert leftover pesos back to dollars at the end of your trip. The airport's exchange booths have the worst rates in Cabo; withdraw from the airport ATM instead if possible. Your hotel front desk will also exchange currency, but at even worse rates. The best strategy: pull pesos from a bank ATM as soon as you arrive, supplement with credit card purchases, and exchange cash only as a last resort. If you have pesos left at the end of your trip, spend them on last-day souvenirs, tips, or airport food — converting back to dollars loses another 3-5% in fees.
FAQ
Should I use pesos or US dollars in Cabo?
Pay in pesos for the best exchange rate. US dollars are accepted everywhere in the tourist corridor, but merchants set their own (worse) exchange rate. Pull pesos from a bank ATM and use a no-foreign-transaction-fee credit card for larger purchases.
What's the exchange rate in Los Cabos?
The peso fluctuates; in recent years it's ranged from 17 to 22 pesos per US dollar. Check a currency app before you travel. ATMs and credit cards offer the bank rate; exchange booths and hotel desks offer worse rates.
Should I choose pesos or dollars on the card terminal?
Always choose pesos. The "dynamic currency conversion" that lets you pay in dollars almost always offers a worse exchange rate than your card issuer's. The same applies at ATMs — decline the ATM's offer to lock in a dollar amount.
Are there ATMs in Cabo San Lucas?
Yes — at the airport, resorts, OXXO stores, banks, and shopping plazas. Bank-affiliated ATMs (Banamex, BBVA, Santander) offer the best rates and lowest fees. Avoid standalone ATMs in nightclubs and hotel lobbies, which often have higher fees.
How much cash should I bring to Cabo?
Carry $100-200 in US cash for tips and emergencies, plus pull 3000-5000 pesos from an ATM for cash purchases. Use credit cards for hotels and larger restaurant bills. Avoid carrying large amounts of cash — use the hotel safe.
Are credit cards safe to use in Cabo?
Yes, at major resorts, restaurants, and tour operators. Use cards with no foreign transaction fees, notify your bank of international travel, and check your statement after the trip. Avoid using cards at small or sketchy establishments.
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