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Rest assured, American travellers, USD is widely accepted throughout Costa Rica, as are Costa Rican colones. Unfortunately, CAD, Euros, and other foreign currencies are not accepted by most companies, with the exception of a handful of Costa Rican businesses with international owners who are not averse to accepting payments in currencies native to their home country.
SHOULD YOU PAY WITH USD OR COLONES?
Although the local currency in Costa Rica is the colon (pronounced coh-loh-n, and not how most English speakers would pronounce the word in reference to punctuation or human anatomy), most items sold at popular tourist destinations throughout Costa Rica are priced in USD. This encourages the majority of travellers to pay for hotels, tours, attractions, transportation services, and food services in USD cash, if not by credit card. Although most travellers can get by without the need to pay for an item in a currency other than USD, we recommend that travellers exchange a small portion of their dollars into colones, as there may be times when it is required or advantageous to pay with the local currency. If you plan to travel off the beaten path, businesses in remote areas typically do not accept USD payments, or any form of payment other than cash colones for that matter. Purchases from street-corner salesmen or cart-towing beach roamers (selling pipa fria, copos, ceviche, and other treats) may only be possible in colones. Tips, although welcomed whenever and however offered, we assume, are greatly appreciated by the locals when offered in colones, as this saves guides and other service workers a trip to the bank to exchange the funds. In addition, given that most tourism-related items are priced in USD to begin with, paying with this currency avoids the need for travellers to concern themselves with exchange rates, avoiding some of the issues we address in our related blog post: Understanding The Practice Of Currency Exchange And Minimizing Loss: USD To Costa Rican Colon.
Alternatively, some travellers wish to exchange all of their trip money into colones. We do not see an urgent need for doing so (nor would we recommend that travellers do so), but if this us your preference, we suggest exchanging the funds through your local bank or currency exchange provider in your hometown prior to embarking on your trip. Although currency exchange booths are present at both of Costa Rica’s international airports, and a variety of banks (Banco Nacional, Banco de Costa Rica, Banco de San Jose, and Banco Popular, to name a few) are available in most popular cities and beach towns, you will likely lose more on the exchange if you convert your money through any of these sources than if you take care of the matter from home. Currency conversion can be handled on the fly throughout your trip (if you wish to convert your funds in small quantities and every so often as you travel), however, it would be best to limit the number of bank visits you plan to make. Visiting the bank in Costa Rica can be a slow process that often requires a long wait and sometimes the use of a ficha (a numbered ticket). Since most bank representatives do not speak English, when travellers do not have enough knowledge of the Spanish language to manage on their own, the process may also need to involve the help of a second bank representative with at least basic English language skills, whenever he or she is available.
- When an item is paid for in Costa Rica with USD, most often the buyer will receive colones–not USD–in the form of change. This is because many places that accept payments in USD do not have enough of the currency on hand (including specific denominations) to provide it back to travellers following a purchase. For this reason, visitors easily accumulate colones over the duration of their trip, even when the majority of their trip items are paid for with USD. For example, providing a $20.00 American dollar bill for a $16.00 USD purchase and receiving roughly 2,000 colones (approximately $4.00 USD) back in change is common practice. Colones collections can add up quickly, which is why we only suggest that travellers convert a small amount of USD to colones at the start of their vacation (if and when they intend to exchange any funds at all). To any travellers who end their vacation with more colones in their wallet than they know what to do with, we recommend leaving the collection as a tip for hotel staff, airport transfer service drivers, and airport cleaning staff, or if the services rendered do not warrant such kindness, putting the funds toward last-minute souvenir or duty-free purchases before flying home.
- Most Costa Rica establishments will not accept USD bills higher than $20.00 American dollar bills (only in rare cases are $50.00 American dollar bills accepted). This means that if you had intended to carry larger bills with you throughout your travels, your wad just grew three sizes. Still, it is better to learn the disappointing truth in advance than to make it rain with $100.00 bills at the airport exit, only to get the shaft by a taxi driver who won’t turn on his maria (meter) for you until he sees some big $5.00 bills blazing. Holla!
IF YOU DON’T WANT TO CARRY CASH AROUND, YOU HAVE 3 OPTIONS…
Regardless of whether you opt to travel with USD or colones, the reality is, you will have a lot of cash on you. If you would prefer not to carry the responsibility and the plata (cash) around, there are three alternative options. Unfortunately, in our opinion, none of the three are ideal.
The first option is to bring US travellers cheques with you to Costa Rica. Unfortunately most places including tour operator offices, restaurants, souvenir shops, attractions, and hotels–with the exception of a few large all-inclusive resorts–will not cash travellers cheques on-site. This requires travellers to visit a Costa Rican bank in order to cash the cheques, which, separate from the inconvenience that we argue a bank visit can be, is not as easy a task as it sounds. One of the most stressful situations I found myself in years ago was the result of a travellers cheque mishap. I had signed each cheque in front of the bank representative rather carelessly and nonchalantly, and my messy John Hancock resulted in a denial of funds by the bank manager because my signature was not an exact replica of the signature imprinted on my passport. Since the cheques had already been signed, they were unable to be cashed in by a different bank, and the valueless papers left me stranded in the country without access to the funds I had planned to rely on throughout the remainder of my trip. Fortunately, the credit card I obtained from home “for emergency purposes” rescued me from, quite fittingly, my emergency, but I don’t know what I would have done otherwise without it.
The second option is to rely on credit cards for the majority of your trip purchases. Credit cards have their advantages and disadvantages; they are both a source of attractive travel points/miles/rewards, as well as a source of unattractive travel debt; they can help travellers avoid the problem of carrying a lot of cash around, but can also create new problems related to an increase in assumed risk due credit card fraud and an increase in spending as a result of processing fees and card commissions. As a compromise, consider bringing as much cash as you feel comfortable bringing with you to Costa Rica, and rely on credit cards for excess purchases. This way, the inconvenience and risk associated with carrying a lot of cash around are offset by the inconvenience and risk of credit card purchases. Sure, this is more a suggestion of a lesser evil than an actual solution, and the catch-22 logic has not escaped us. We are frustrated travellers alongside you, and if you’re anything like us, instead of complaining a lot about one of the dilemmas (carrying cash versus paying via credit card), now you’ll complain a little less, albeit twice as often. The only saving grace we have found to help travellers minimize some stress and avoid some unnecessary spending requires a ton of advance trip planning, great attention to detail, and patience. As we explain in our related blog post: Paying For Your Costa Rica Trip: What Is Normal, Common, And To Be Expected?, given that each hotel, tour operator, vehicle rental agency, and transportation service provider in Costa Rica has their own policy in regards to what they require in the way of payments, it is a fact that some companies charge credit card processing fees on top of their sales prices and others do not. Taking the time to learn the policies of each company you plan to provide money to throughout your trip is a time consuming feat, but it can help you best determine which items should be paid for in cash or by credit card to best minimize risk and maximize reward, and this information can be used to calculate the exact ratio of cash to credit card spending that would be most beneficial to you for your trip.
“Taking the time to learn the policies of each company you plan to provide money to throughout your trip is a time consuming feat, but it can help you best determine which items should be paid for in cash or by credit card to best minimize risk and maximize reward, and this information can be used to calculate the exact ratio of cash to credit card spending that would be most beneficial to you for your trip.”
~ Nikki & Ricky,
Costa Rica Travel Blog
ATM (Automated Teller Machine) Withdrawals
Most travellers would agree that relying on ATMs for insta-cash is as bad an idea as purchasing tacky and impractical vacation souvenirs that, upon returning home, have a shelf life of a month before they are tossed in the trash (trust us, as documented in our related blog post: What To Buy In Costa Rica: Our Costa Rica Souvenir Shopping List And Buying Tips, we admit, we are souvenir junkies). Yet, we have all committed the shameless act at least once throughout our travels and have a little less moolah in our bank account as a result. Granted, obtaining cash from ATMs does eliminate the hassle of travellers cheques, the risk associated with credit card use, and the need to carry a lot of cash around from the start to the end of a vacation given that cash can be obtained in increments, but ATMs pose too many risks of their own (related to fraudulent card readers) and safety concerns (most frighteningly, robbery) to be considered a great option. Throw in the fact that ATM fees are astounding, and it is hard for us to recommend that you should pay through the roof to access the money you already own, only to assume new worries in an attempt to dodge others.
PUT SAFETY FIRST
Safety should be every traveller’s priority. Although convenience and money are legitimate concerns, more so is your wellbeing. Don’t miss the “Money & Spending Safety” section of our related blog post: Is Costa Rica Safe? Yes, If You Travel Consciously, Cleverly, And With Common Sense. Here’s How., to learn more about calling your credit card provider prior to leaving home to release any international travel bans on your account, troubles with travellers cheques, tour purchases from street-corner salesmen, checking and double-checking your currency conversion, and splitting your cash and credit cards.
QUESTION TO COMMENT ON: When travelling, how do you prefer to spend?