When traveling to another country, we always have the same questions, should I bring a credit card or cash? If we do, how much, where can I exchange currency, etc., in this section we have put together all the tips you will need to travel safely within Mexico (don't forget to let your bank know your bank you are traveling to Mexico 72 hrs. in advance!).
When I travel to any country, I never bring any ATM cards linked to my primary saving/checking accounts, for this purpose, I have a savings/checking account that has only have the budget I plan spending for that trip, plus 20% more for incidentals. The account I choose was the Capital One 360. I like this account because it's free, it gives you a better interest rate than normal brick and mortar bank accounts. And the most important feature is that it doesn't charge you commissions or currency conversion fees for withdrawing cash outside the USA (most banks charge you a 3-5% “convenience fee”), or at its 38,000 fee-free Allpoint® ATM in the USA. Since you get the saving and checking account together, I save 50% of our funds in the savings account and 50% of the funds in the Checking account, that way, I can do online transfers between savings and checking accounts if needed. I usually withdraw the equivalent of about $150 USD at a time to avoid losing all my budget if I lose my wallet. Unfortunately, Mexican ATMs will charge you a fee ($2 to $5 depending on the bank/location) for withdrawing cash with a card from a different bank. Fortunately withdrawing money directly from a Mexican bank will get you a better exchange rate (a.k.a inter-bank exchange rate), that getting Mexican pesos from your bank or at the airport, the inter-bank rate will offset the withdraw fee as long as you withdraw $150 USD or more at a time.
Although a lot of places in Mexico are still cash only establishments (Archaeological ruins, some toll roads, and small restaurants) every day, more and more establishments have started to accept credit cards, especially in touristic places. Visa and Master Card are equally accepted, and any of any of the two are a good bet, American Express is starting to get accepted in some places (mainly big chain hotels, malls, and rental card companies) but I will only carry it for renting a car or for paying a hotel bill. If you have a Discover card, just leave it at home.
I always pay with a credit card that charges no foreign fees and get either points or car insurance through the card, and because credit cards are safer that using your ATM card (if your car gets cloned or stolen, credit card have better insurance against fraud than ATM cards). If you only have credit cards that charge foreign fees I suggest you are getting one that doesn't (Chase Sapphire Preferred® Card is one of the most popular for travel expenses), and let your bank company know you are traveling to Mexico at least 72 hrs. in advance. It’s also advisable to carry at least two credit cards as one can be blocked by your bank.
Places where is recommended to use a credit card in Mexico
Well established restaurants or convenience stores like OXXO and 7-eleven
Tour companies and Eco parks
Big box stores (Wal-Mart, Chedraui, Calimax, Soriana, Comercial Mexicana, etc.)
Souvenirs from brick and mortar locations.
Traveling to another country without any cash in your wallet it's never a good idea, I usually exchange 100 USD in local currency from my bank before leaving home, and this will let me start my vacation without any issues in case I forget to get cash from an ATM when arriving in Mexico.
You should also carry $100 USD in $20 bills. You can use them in case you don't have any cash in Pesos, or are at a place doesn't take credit cards, the conversion rate it's going to be awful, but at least it will save you from an awful situation like not being able to pay a restaurant bill. As a reference, you can check the current conversion rate here, but the conversion rate at the time of writing this is 1 USD to 18.00 MXP.
Places where is recommended to use cash in Mexico
Archaeological Ruins entrance
Gasoline (Gas stations are known to be the preferred places for unethical people to clone credit cards)
Taxis and local buses (except intercity and interstate buses)
Thanks to the proliferation of ATMs, traveler’s checks are not worth the hassle anymore, they are hard to cash and easy to damage, just leave them at home next to your Discover card, your personal checkbook, and your selfie stick.
Mexico as any other country has several convenience and big box stores all over the country. The cheapest store chain is “Bodega Aurrera”. The two most expensive are Chedraui and Soriana, but they have a great assortment of products and are almost everywhere. Small convenience stores like OXXO are everywhere and are a good place to buy in small quantities.
When using your money use common sense, compare prices and don’t stress too much if you ended paying the “Tourist Price,” this happens to all of us even when traveling in our own country.