Should You Bring USD Or Pesos To Cabo? Here’s What Travelers Are Saying This Year

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It’s the great debate for every first-time visitor to Los Cabos: “Do I need to get Mexican pesos, or can I just use my U.S. dollars?” It’s a simple question with a surprisingly complex answer that can save you a significant amount of money.

While it’s true you can navigate your entire vacation using only American currency, doing so is a classic rookie mistake. Here at The Cabo Sun, we believe a savvy traveler is a financially smart traveler. We’re here to break down the pros and cons and give you the definitive 2025 strategy for managing your money in paradise.

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The “Easy” Answer: USD is Accepted… But at a Cost 💸

Let’s be clear: in the tourist centers of Cabo San Lucas and the high-end resorts of the Corridor, the U.S. dollar is widely accepted. From the water taxis at the marina to the souvenir shops and restaurants, virtually everyone will gladly take your American cash. This convenience is why many travelers don’t bother exchanging money at all.

However, this convenience comes with a significant, often hidden, “tourist tax.” When you pay in USD, you are not getting the official bank exchange rate. You are getting the vendor’s own, self-determined rate, and it is always rounded in their favor. This means you will consistently overpay, often by 10-15%, on every single transaction.

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The Savvy Answer: Pesos Are King for Value 👑

If you want to maximize your budget and get the best value, using Mexican pesos is the only way to go.

• You Pay the Real Price: All goods and services in Mexico have a set price in pesos. When you pay in pesos, you pay that fair, local price without any unfavorable “gringo exchange rate” applied.
• No “Mental Math”: You avoid the constant, confusing gymnastics of trying to convert prices in your head and figuring out if you’re getting a fair deal on that taco or boat ride.
• It’s More Respectful: Using the local currency is a sign of respect for the local economy and the hardworking people who are part of it.

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The Tipping Dilemma

This is where most travelers get confused. You only plan on using cash for tipping your shuttle driver, the bellhop, or your fishing charter captain. So, which is better?

While the incredible staff in Cabo will happily and gratefully accept tips in US dollars, pesos are almost always preferred. The reason is simple: they can use them immediately. A tip in pesos can be used to buy lunch or pay for groceries on their way home. A tip in USD often requires them to make a special trip to a currency exchange house (and potentially pay a fee) to convert it into money they can actually spend.

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The Ultimate “Hybrid” Strategy: The Best of Both Worlds

So, what’s the perfect plan? The savviest Cabo veterans use a simple and highly effective hybrid strategy.

• Step 1: Arrive with a Small Amount of USD. Before you leave home, get a small stash of US dollars in small denominations ($1s and $5s). This is perfect for your arrival day—tipping your airport shuttle driver and the bellhop at your hotel.
• Step 2: Use a Bank ATM for Pesos. Once you’re settled in, this is the most crucial step. Do not use the standalone, tourist-trap ATMs on the street or in the marina. The best and fairest exchange rate you will get is by using your debit card to withdraw pesos from an ATM that is physically located inside a major, reputable bank branch (like Scotiabank, Banorte, or BBVA) in downtown Cabo or San José del Cabo.

• Step 3: Use a Credit Card for Big Purchases. For larger expenses like a fancy farm-to-table dinner, a major fishing charter, or your final resort bill, your best bet is a credit card that has no foreign transaction fees. And when the machine asks if you want to be charged in USD or Pesos, always choose pesos. This allows your home bank to do the currency conversion at a much better rate.

By following this simple hybrid strategy, you get the convenience of cash on arrival, the incredible value of using pesos for daily expenses, and the security of using a credit card for big purchases. It’s the ultimate insider’s guide to managing your money like a pro.

Happy travels!