Cabo Currency and Money Tips for Travelers: Pesos, Dollars, ATMs and Tipping

The first money question we get from friends is always the same: do I need pesos, or will dollars work? The short answer is that both work almost everywhere in Los Cabos, and pesos usually get you the better deal. Here is how we handle money on the ground, from the ATM to the tip jar.

Pesos or dollars: what actually happens at the register

Mexican pesos (MXN) are the currency. US dollars are accepted at most restaurants, bars, shops and tour desks in the tourist zones, but each business sets its own exchange rate when you pay in dollars, and that rate is rarely in your favor. Pay in pesos and you pay the price on the menu. Pay in dollars and you pay the menu price plus whatever rounding the cashier applies.

Our rule: use pesos for anything small or local, and let the card handle the big bills. Street food, taxis, local buses, market stalls and tips are peso territory. A long dinner at Sunset Monalisa or Edith's Restaurante goes on the card.

Cards: where they work and what to watch

Credit and debit cards are accepted at nearly every sit-down restaurant, bar and hotel in Cabo San Lucas and San José del Cabo. Places like Salvatore G's, Flora Farms, Acre Restaurant and Romeo & Julieta all take cards without a fuss. Smaller taco stands, beach vendors and some taxis are cash only.

Two habits save you money. First, when the card terminal asks whether to charge in pesos or dollars, pick pesos. Choosing dollars lets the terminal convert at its own rate, and that rate is worse than your bank's. Second, bring a card with no foreign transaction fee if you have one, and tell your bank you are traveling so a Mexican charge does not get flagged.

ATMs: use the bank, skip the corner box

We recommend bank-affiliated ATMs, the ones attached to an actual bank branch or inside a bank lobby. Standalone machines in convenience stores and on the Marina walk charge higher fees and sometimes worse rates. Withdraw in pesos, not dollars, and decline the machine's offer to convert for you. Take out enough for two or three days at a time so you are not paying a fee every morning.

Cover the keypad and use machines in daylight in busy areas.

How much cash to carry

You do not need a lot. A few hundred pesos a day covers tips, a taxi, a couple of tacos and a beach chair. Keep it in small notes: 20, 50 and 100 peso bills. Big 500 peso notes are hard to break at a street stand and awkward for tipping. If you plan a day in Todos Santos or a boat ride to Lover's Beach, carry a bit more, because the water taxis are a cash business and you can politely negotiate the fare.

For context, backpackers and budget travelers get by on roughly 50 to 150 US dollars a day here, most of it in pesos. If you are eating at $$$ and $$$$ rooms every night, your card is doing the work and your cash needs stay small.

Tipping in Cabo

Tipping culture here matches the US more than the rest of Mexico, because the tourist economy runs on it.

• Restaurants and bars: 15 to 20 percent. Pesos or dollars are both fine, and cash is appreciated even when you pay the bill by card.
• Taxis: round up. A few extra pesos on a short hop is plenty.
• Tour guides, boat crews and drivers: tip the crew directly at the end of the day. Cash, in pesos or dollars.
• Housekeeping and porters: small bills daily. This is exactly what the 20 and 50 peso notes are for.

What things cost: reading the price levels

We list restaurants by price level rather than by dollar amount, because menus change and exchange rates move. Here is how the levels sort out among the places we send people most:

• $$: Cabo Wabo Cantina, Mango Deck, Los Tres Gallos, Jazmin's Restaurant, La Lupita Taco & Mezcal and Baja Brewing Company. Casual, big crowds, easy on the budget.
• $$$: The Office on Medano, Salvatore G's, Flora Farms, Acre Restaurant and Oystera in Todos Santos. A proper dinner with wine.
• $$$$: Sunset Monalisa and Edith's Restaurante. Special occasion money, and worth planning around.

One note on the calendar. Peak season runs November through April, and some tours and services nudge their prices up when demand is high. Book ahead and confirm the price when you book. May through June and October through November are the shoulder months, when the sun is still out and prices ease off.

Practical notes

• Exchange a small amount before you fly if you like landing with pesos in your pocket, then use a bank ATM for the rest.
• Save your hotel or concierge number in your phone and carry a portable charger.
• Prices in pesos are often written with a $ sign. If a taco reads $45, that is 45 pesos, not 45 dollars.

Pesos in small bills for the day, a card for the dinners, and a bank ATM when you run low. That is the whole system. Plan the dinners around our Cabo restaurants page and the price levels above.