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Currency in Costa Rica... advantages and disadvantages of using USD

Currency in Costa Rica... advantages and disadvantages of using USD

Old Mar 31st, 2011, 08:27 AM
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Currency in Costa Rica... advantages and disadvantages of using USD

Hello all... after much planning (thank you fellow Fodorites) ... we leave (or at least hope to, expecting bad weather in New Jersey) tomorrow for Costa Rica.

One final question: We were going to keep USD cash to pay for the smaller hotels (get a better rate). Should we keep USD to pay for meals also?

I saw a thread from 2009 debating this - that the larger places accept USD but the rate of exchange given for colones/USD is not good.

Thoughts? Our bank has a whopping fee to use ATM overseas, so trying to figure this stuff out (of course, last minute).
Kaneez is offline  
Old Mar 31st, 2011, 08:32 AM
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I always recommend this: if the price is in dollars, pay in dollars. Typically, this will be hotels and tours. If the price is in colones, pay in colones. Restaurants, grocery stores, shops, taxis, public bus. This just makes everything easier not only for you (no figuring out exchange rates in your head) but for the person who gets the dollars.

Yes, almost everywhere will accept dollars but you don't know what exchange rate you will be getting. Usually, it's not good. Sometimes you cannot use dollars - such as if you are riding a public bus.

There are ATM's in the airport where you can get some colones before you leave. I think it is best to have some of each.

If you bank has high charges for ATM use, you might consider getting a credit card that doesn't. At any rate, you could just use the ATM sparingly. You could also bring dollars and exchange them at a bank for some colones.
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Old Mar 31st, 2011, 08:47 AM
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You should not change money at the San Jose airport, but other than that you should not encounter any ripoffs in changing dollars to colones. The official exchange rates are published daily. Many hotels will be able to change small amounts for you. You just need a little bit if you are going to eat at local places, buy at grocery stores, use taxis but almost all tourist serving businesses are going to take USD. I found occasionally I did better if I paid in colones.
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Old Mar 31st, 2011, 07:08 PM
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It just seems to me if you are traveling to a different country, you should use the currency of the country you are visiting.

It's been several years since I've been in Costa Rica, using US dollars then just wasn't an option.

It just seems more polite to use the local currency. Am I missing something here?
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Old Mar 31st, 2011, 08:52 PM
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I disagree with one point the mlgb makes: Yes, the official exchange rate is published daily, but if you pay for something in dollars at a store or if you change money at your hotel reception, you're not going to get that rate. And you shouldn't expect to. The business then has to turn around and change those dollars into colones at their bank, which takes a cut. The business is offering you a convenience and you're going to have to pay something for it.

Even if you have a no-fee or low-fee ATM card from back home, the bank here will charge a fee for an ATM withdrawal.

I think the bottom line is that when you deal with two currencies, you're going to pay something somewhere in the process. You try to minimize the fee, but you can't avoid it completely.
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Old Mar 31st, 2011, 08:55 PM
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I agree with you, Jean. Using local currency seems the politest way to go.
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Old Apr 1st, 2011, 09:20 AM
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We always come with dollars and then get colones back in change and use those. U.S. dollars have been accepted everywhere that we've gone, even a tiny fruit stand on the side of the road, and we got the normal exchange rate there. They pulled out a calculator. We haven't strayed too far from the beaten path though. Be aware that if you use your credit cards, your cc company may charge you a conversion fee - usually 1-3%.
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Old Apr 1st, 2011, 10:41 AM
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One of the issues had with using colones for everything is that I was finding ATMs had a very low withdrawal limit on colones (lower than on USD withdrawals). By the time I paid everyone's ATM fee AND the conversion fee, it was more expensive to use the ATM to get colonoes, than to ask the hotel for $20 or $40 worth of change in colones, which lasted me long enough. And no, they didn't jack up the conversion rate.
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Old Apr 1st, 2011, 11:31 AM
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Then just get your colones from your bank at home before you leave for Costa Rica. Simple enough.
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Old Apr 1st, 2011, 12:37 PM
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Probably the worst of all suggestions.
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Old Apr 1st, 2011, 01:18 PM
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Well, I'll be a little nicer about it.

Almost no bank in the U.S. deals in colones or even wants to, Jean. It's a soft currency whose exchange rate fluctuates widely and there's little demand for it. The only places I've seen them for exchange are at currency exchange windows in airports with flights to Costa Rica (MIA and DFW, for example). The rates those places give you are terrible. You're always better waiting until you get to Costa Rica to get them.

I withdrew 100,000 colones this morning (about $200) out of an ATM at BAC San Jose with my card from my U.S. bank. The withdrawal fee that they levied was 1,500 colones (about $3). I figure that's the price you pay for dealing in two currencies. It's going to hit you somewhere.
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Old Apr 1st, 2011, 02:11 PM
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Interesting. I figure it's worth the lousy exchange rate for the convenience. I don't exchange for the entire trip. Enough to get settled. I charge everything I possibly can, every where I go. No international fees with Capitol One, and the miles add up fast.

Is the exchange worse getting colones in the US than it is just using dollars and allowing merchants to set it themselves?
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Old Apr 1st, 2011, 02:16 PM
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Totally agree with Jeff who obviously knows what he is talking about.

Most ATM's in Costa Rica will limit you to 100,000 per withdrawal. Of course, you can do two in a row if you need $400 - but you will pay the fees twice.

If you need more than $200 worth of colones, just go inside the bank and do your transaction there and you won't be limited.

When you pay in dollars, the people you pay will smile and accept your dollars. (Except a few places like the public bus.) But then, they have to figure out what to do with those dollars. Keep them or take them to the bank to change them? What if they get to the bank after the exchange rate has changed and is now unfavorable to them?

Why would you want to put people out by forcing them to go to the bank to change the dollars into colones because it's easier for you? It's kind of like saying that colones are not worth handling and only dollars are any good.

Using the local currency is easy and respectful. Of course, pay your hotels and tours with dollars,if you like, but for everything else, use colones. It's not a difficult thing to do. Prices of almost everything - except some heavily touristed restaurants and shops - will be in colones.
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Old Apr 1st, 2011, 02:49 PM
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I disagree with this philosophy; these are people running businesses. They can accept dollars or refuse them. Since they're in the tourist business, they accept them. I don't think you can really fault tourists for using the system that the businesses set up. Some places even list their prices in dollars. They ask a certain price, and you pay it. The exchange rate can swing either way; it could swing in favor of the vendor as well. I've asked taxi drivers the fare, and they'll say twelve dollars. It's just part of being in the tourist industry. People running businesses want it to be convenient for customers to use it.
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Old Apr 1st, 2011, 02:53 PM
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Jean, right now the official exchange rate is around 500 to the dollar. I flew through DFW last week and saw the exchange windows there were offering about 420 to the dollar, AND charging a fixed commission on top of that. That's a big cut. That would be my last resort for getting colones.

It's not like euros or pounds or Canadian dollars. Those fluctuate, yes, but international currency traders have a better handle on the futures of those currencies. They don't with the colon, which is why no one outside Costa Rica wants to touch them. Or if they do, it will be at a very unfavorable rate to the consumer.

As hsmithcr says above, if you pay in dollars, you're shifting the inconvenience to the merchant. You have to expect to pay something for that, but it will still be a better rate than getting colones back home.

Use the "Everyody takes dollars" approach to travel in Costa Rica if you must, but it is not cost-free, and nobody should lead you to believe that it is.
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Old Apr 1st, 2011, 03:02 PM
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Volcanogirl, I didn't see your post before I wrote mine. You're right: A tourist-oriented business will be happy to accept dollars to please the client. That's good business practice.

Our point is that we, the foreigners, are being charged something for that convenience. A traveler might say, "Oh, how nice! I don't have to worry about changing money at all!" That convenience comes at a cost.
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Old Apr 1st, 2011, 03:10 PM
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On the topic of restaurants, it is blatantly illegal for any restaurant to have a dollar menu. By law, the menu has to list the price in colones with tax and service included. Many tourist restaurants list only dollar prices with a note at the bottom "Tax and service not included."

If the restaurant wants to calculate its own rate for diners who choose to pay in dollars, that's allowed (and many do levy a surcharge if you pay in dollars). But the menu has to show net prices in colones only.
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Old Apr 1st, 2011, 06:29 PM
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One more point, and then I'll stop.

Hotels and tour operators are allowed to price their offerings in dollars, and most do. If you pay with a credit card, by law, those transactions have to go through here in colones. If your bank back home charges something for a foreign currency transaction, you'll get hit with it, even though you were quoted in dollars and you'll pay your bill back home in dollars. Colones still enter into it.

These things are never free.
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Old Apr 1st, 2011, 07:39 PM
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This has been an interesting read! Are we a little weird? We don't like using dollars in Costa Rica--we always go for the total experience, currency and all! We've had good luck in getting about 150,00-200,000 colones at a time from ATM's. It generally lasts quite a while. Hi Jean, Jeff, Volcanogirl!
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Old Apr 1st, 2011, 08:06 PM
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Hi, shillmac!
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