Credit & Debt cards
Some places on the island take credit, most take US dollars and there are plenty of ATM machines around which dispense Mexican Pesos. If you’re using cash, I recommend using the ATM versus trying to bring and exchange US dollars for pesos at a bank or money exchange place (typically a better rate, and some people don’t want to run around with large amounts cash).
You’ll need to contact your credit card company or bank at the number on the back of the card to notify them that you’re traveling, otherwise your cards will be declined. Just call and tell them you want to add a “travel notification” and they’ll ask you the dates and where you’re going.
Also, many credit cards have a 3% “currency conversion” fee for using the card to pay in Pesos. Capitol One does NOT, so if you have a Capitol One card, take it.
The ATM machines in México work just the same and charge less than here in the US for getting cash (20-30 pesos, or $1.50-$2.40). If you have a VISA or MasterCard Debt card with no bank fees (like mine from Landmark Credit Union) you’re golden.
Traveler’s Cheques & $100 bills: Don’t do it. You need what seems like 8 forms of ID and many places (even banks) won’t exchange them for pesos. Bring a VISA or MasterCard debt card for cash instead.