ATMs in Mexico high currency conversion charges

It’s confusing on purpose. They want you to pick USD because they make money on the conversion. I’ve travelled through most of Latin America and learned the hard way that local currency is the better option. Every time I chose USD, the ATM added something sneaky like a markup or service fee I didn’t see right away. Just choose MXN and you’ll be fine. Your bank already knows how to do the conversion.

I had this happen at a Santander ATM in Mérida. The screen said “charge in USD” and I picked it without thinking. Later I checked my statement and saw I paid way more than expected. The next time I picked MXN and got a much better result. My advice is to always go with the local currency when withdrawing cash abroad, even if your home account is in USD. Your bank back home will convert it at a fairer rate than the ATM ever will.

That 8 percent markup you saw was the giveaway. It means the ATM is converting your dollars using their own inflated rate and keeping the difference. This is called dynamic currency conversion and it’s rarely in your favor. I used my Wells Fargo card and when I picked MXN, I got a solid rate with just my regular international fee. If you see numbers that don’t make sense or the screen talks about guaranteed exchange rates, it’s usually a trap.

I made that same mistake on my first day in Mexico City. I thought choosing USD made sense since that’s my home currency, but I ended up getting a worse rate than I would’ve with MXN. The ATM was doing the currency conversion instead of my bank and they added a hidden fee into the exchange rate. Now I always choose the local currency, in this case MXN, and let my bank handle the conversion. It’s almost always cheaper. Next time I am going to get the Capital One or Charles Schwab card that refunds all atm fees so no stress at all