Do I Need Pesos in Cabo?

Planning on vacationing in Cabo San Lucas soon? If so, you’ve likely heard from family and friends who have visited Cabo in the past that you can use US dollars instead of pesos during your trip to Mexico.

While this is technically true — the answer isn’t entirely that straightforward. In this post, we’ll break down what you need to know about spending money in Cabo San Lucas — including the pros and cons of using dollars, pesos, and credit cards — and our local tips for getting the best exchange rate in Mexico.

Can I Use US Dollars in Cabo?

The short answer? Yes, you can use US dollars at most shops and restaurants in Cabo San Lucas.

Since Los Cabos is a popular vacation destination for American tourists, many businesses accept US dollars and pesos. In fact, at some restaurants and shopping malls in tourist hotspots, such as Downtown Cabo San Lucas, prices are listed in both dollars and pesos.

Is It Better to Use Pesos in Cabo?

While you can use U.S. dollars at most shops and dining establishments in Cabo San Lucas, if you plan to pay using cash instead of a card, it’s usually wise to pay in pesos — and here’s why.

Tourists who use dollars instead of pesos are more likely to receive a poor exchange rate or to be unintentionally shortchanged by the staff. This is because some local establishments, including shops, markets, and gas stations, can only provide change in pesos. That said, always pay in pesos to guarantee exact change and to stretch your dollar as much as possible in Mexico.

How to Exchange Money in Cabo San Lucas

Since some businesses in Cabo San Lucas only accept cash, you’ll need to have some dollars or pesos on hand at all times. If you do decide to exchange dollars for pesos (which is what we recommend!), here are some tips for getting the best exchange rate:

• Exchange Money at a Bank ATM — Banks always offer the best exchange rates, so it’s smart to use an ATM inside a bank for currency exchange in Cabo San Lucas. Some banks in the United States, like Bank of America and Citibank, have subsidiaries or partnerships with banks in Mexico, so you can use your debit card to withdraw cash without incurring ATM fees.
• Withdraw Cash Safely — Bank branches are also the safest place to exchange money in Cabo San Lucas. ATMs inside bank lobbies are less likely to fall victim to scams.
• Keep Cash for Tips — Tipping is customary but optional in Cabo San Lucas, so it’s always wise to have some cash on hand for taxi drivers and tour guides. Tipping 15–20% for excellent service at a restaurant is recommended, similar to the customary practice in the United States.

Cash vs. Cards: Which to Use?

While it’s always smart to have some cash on hand for cash-only establishments, credit cards are the easiest choice for making transactions in Cabo San Lucas, especially in popular tourist spots such as high-end resorts, restaurants, and shopping centers.

When using a credit card to pay in Cabo San Lucas, you don’t have to worry about being shortchanged or figuring out the exchange rate — you can simply leave all the number crunching to the bank.

Tips for Using a Credit Card in Cabo San Lucas

However, before using credit cards in Cabo San Lucas, keep the following things in mind:

• Call Your Bank — Before traveling to Cabo San Lucas, be sure to call your bank and credit card company to inform them of your travel plans. This will prevent card freezes and transaction failures due to suspected fraud or unusual spending activity.
• Check for Fees — Unfortunately, some credit card companies charge foreign transaction fees for purchases or ATM withdrawals made outside of the United States. Before traveling to Cabo, check your card policy and consider opening a new travel credit card with no foreign transaction fees.
• Pay in the Local Currency — If you have the choice to pay in dollars or pesos during a credit card transaction, always choose pesos. This will ensure you receive the best exchange rate and that the purchase will not be flagged as a foreign transaction.

Experience the Best of Cabo San Lucas with Cabo Rentals by Jane

Overall, Cabo San Lucas is a great destination to visit if you don’t want to be constantly worried about having enough of the local currency on hand. Although spending pesos will result in the most favorable exchange rate, dollars are widely accepted and can be used at most shops, restaurants, and hotels.

If you’re planning to visit Cabo soon and are looking for somewhere to stay, we would love to host you in one of our stunning beachfront properties, condos, or villas with Cabo Rentals by Jane. Browse our properties at the Villa La Estancia Resort to find the perfect place to stay in Cabo San Lucas!