Cuba: Money in Cuba

Part the Third: Money in Cuba

If you’re anything like me, then your first couple days in Cuba will likely be spent roaming the streets of Havana, admiring the architecture, dodging illicit cigar sellers, and shooting roll after roll of film. After that you’ll spend the next two weeks scratching your head, trying to figure out how the Cuban monetary system works.

Let’s back up a bit.

The first and biggest problem you’ll have (as an American traveler) starts before you even leave the States. You see, that senseless embargo is going to raise its ugly head and bite you in the ass again.

Remember that no American companies are allowed to support Cuba in any monetary way. While in Cuba you won’t be able to access your bank account with an ATM card. Nor will you be able to use any credit card that is issued by an American bank. You can’t use traveler’s checks, either. Western Union won’t even be able to transfer money to you in Cuba! (However; I understand that it is possible to send money via Western Union to a Cuban citizen with an existing Western Union account.)

How can an American refill their wallet while in Cuba? For all intents and purposes, they can’t.

What’s an ATM-accustomed traveler to do? Bring all the money they’ll need for the entire trip, in cash, with them! For me, that meant walking the streets of Havana with about $1,200 in twenties on me. Sounds crazy, but it’s really not that bad.

Cuba is easily the safest and friendliest country I’ve ever been to. As far as I know, in two trips with a total of 25 people (and over $25,000 at risk!), we’ve never lost a single dollar to thievery. Oh, we’ve been scammed a bit and a person or two has lost some money, but if you use common sense and don’t walk around with bills hanging out of every pocket you should feel very safe indeed.

The more important consideration is making sure you bring enough money in the first place. How much is enough? That depends on how you like to travel. On our trips to Cuba, we’ve definitely been on the budget travel track. We shoot for a goal of $20 total per day. Budgeting like that can be tough, certainly. That $20 per day includes meals, housing, transportation… and not much else. Bring more if you want to travel in style or go on tours (caving, horseback riding, beach excursions, shows, etc.) or if you want to return home with souvenirs (cigars, rum, artwork, etc.) Play your cards right, though, and $20 will make you very comfortable and extremely well fed. Budget travel in Cuba does not mean uncomfortable travel!

Both times I traveled through Cuba, I took $1,200 of cold, hard cash. Loaded with twenties (hundreds – even fifties – are quite hard to break) I stashed the money in many different locations just in case something happened. In my wallet, in a pair of dirty socks, in the zippered pouch of my backpack, hidden in a moleskin bag buried in my shaving kit, etc. Wherever you decide to put it, make sure you do two things: 1) Remove it from your bag before checking your luggage on a flight, and 2) write down all the places where your money is stashed. We’ve never had a problem with searched bags, but nowadays you have to assume they’re all searched by the airlines and it’s easy to imaging a security guard pocketing $500 without a moral struggle. Also, with money hidden in every nook and cranny, it’s easy to forget where you’ve hidden it all! What you might temporarily think has been stolen may actually have simply been overlooked – you don’t need that kind of stress. I don’t like them, but anther option many people swear by are hidden money belts and neck pouches. To each their own.

(By the way, if you’re planning on reaching Cuba via Canada, you might look into setting up a credit card or Visa check card account along the way. Possibly less hassle would be to look into buying some Thomas Cook traveler’s checks. I hear they’re quite useful in Cuba. In any event, it would probably be good to have a backup plan, just in case your available funds plummet during your trip. Remember, there isn’t even an American embassy in Cuba to bail you out. Be careful.)

Let’s move on.

The Cuban economy. It’s confusing enough that it takes a concerted effort to get to the bottom of things.

There are five valid currencies in Cuba. Five. There’s the U.S. dollar, the Euro, Convertible Pesos, National Pesos, and coin change. Technically, the coin change belongs to both of the two types of pesos, but it’s confusing enough to warrant an explanation.

Let’s start with the foreign stuff. That’s easier to deal with. The U.S. dollar has been officially declared a usable currency by the Cuban government. Four years ago, that wasn’t the case, though that didn’t stop anyone from using them. Prices all over Cuba are tied to the U.S. dollar and it’s very easy to get by using nothing else. Pay careful attention to written prices, though. Only dollar signs with two strikes through the “S” denote U.S. dollar prices. If the “S” has only one strike, it’s a price in National Pesos.

I’m not from Europe so I can’t comment on the effectiveness or exchange rate of the Euro in Cuba. Many people told me that you could use it, though, and that makes since considering the amount of Europeans I saw down there. As an anecdotally supporting argument, many kids on the street tried to sell back Euro coins to me – right up until they learned that I’m from the U.S. and have no use for them back home.

Right. Let’s get to the confusing stuff.

Convertible pesos are bills and coins issued by the Cuban government that exactly match the value of the U.S. dollar. The shinier, newer, and heavier Convertible change is everywhere, but Convertible bills are fairly rare on the street. Why? Because Cuban citizens are paid in National Pesos. (I suppose there are plenty of Convertible Peso bills circulating around the more expensive hotels and resorts, but we didn’t often frequent such places.) Convertible Peso change comes in 50 cents, 25 cents, 10 cents and 5 cents, just like in the U.S. Convertible Peso change is very useful in Cuba, but strangely U.S. coin change is worthless, even though its value is tied to the U.S. dollar.

National Pesos bills are far more common, though National Peso coin change is rare. At the casas de cambio and on the streets, the exchange rate for National Pesos to U.S. dollars should be around 26:1. (Incidentally, Cuba was the only place I’ve seen where the casas de cambio have signs in the window saying: Compra: 26.00, Venta: 0.00! They’ll take your dollars, but you can’t sell back your pesos!) Let’s round it down to 25:1 so that a National Peso easily calculates to about 4 cents. National Peso change is, therefore, just a fraction of 4 cents. I suppose that’s reason enough why you don’t often get much of that lightweight, tinny change… there’s just not much to buy with it! (Except, sometimes, ice cream cones. It’s worth hanging onto the occasional half-peso piece for that alone!)

So, if the U.S. dollar is so useful in Cuba, why should we, as tourists, care about Cuban currency at all? Well, once you learn the system, there are some great deals to be had if you have some National Pesos in your pocket. For instance, think about that ice cream cone. At a half-peso, that amounts to roughly 2 cents. If you only have a dollar in your pocket, I guess you could buy 50… Even if you had the smallest Convertible coin change, a 5 cent piece, you’re still overpaying by 2.5 times.

It doesn’t seem like a big deal when we’re talking about street vendors selling ice cream cones, but when you get to a restaurant it can be a big deal (especially when you’re trying to stick to just $20 a day.) Tourist restaurants always charge American prices: $3 for a sandwich, $1.50 for a soda, $7 for fish, and so on. But if you go just a little bit outside the tourists areas in town, you’ll quickly discover many first-rate Cuban restaurants that use National Peso prices. Anyone can find a meal in Cuba for $5… but a seasoned group of 5 tourists can find places that will serve them all for just 50 pesos (about $2.00 U.S.!)

(You may have to persevere to get that low a price. Often times, Cuban restaurants will want you to pay the same prices in U.S. dollars. 10 pesos for a meal. Oh, you’re a foreigner? You pay 10 dollars. The only advantage – if you can consider it one – is that they’ll doubtless escort you right past the line of Cubans waiting outside. Personally, I don’t prefer that kind of preferential treatment.)

With all these ways in which a person can pay for something, so, too, are there many ways to deceitfully separate a tourist from their money. Here are some things to watch out for:

1) Know the exchange rate between U.S. dollars and the National Peso. Don’t exchange money with someone on the street unless you know that you’re getting the right amount. Check with a bank or with a casa de cambio to be sure, but if nothing else, make sure to ask a few different, unrelated people on the street before changing money.

2) Convertible Pesos have the word “Convertible” printed on the bill. Don’t believe anyone who tries to sell you a Convertible Peso that says otherwise. Chances are, they’re trying to get you to buy a National Peso at 1/26th its value.

3) Know the difference between Convertible change and National change. Someone might try to mix in some National coins when they should be giving you Convertible coins. If nothing else, recognize that National coins feel very light in your hand, and they’re usually less shiny. Convertible coins are always silver.

4) Pay attention to those printed dollars signs! Cuban businesses are pretty good about using the “single-strike dollar sign” for National Peso prices and the “double-strike dollar sign” to denote U.S. dollar prices. But if you whip out a U.S. dollar when you’re not paying attention, I’ll bet they’ll call your bluff and take it!

There are other scams to watch out for, but for the most part they’re the same annoyances to watch out for in any foreign country. For instance, cab drivers will know that you’re a tourist and try to set their prices higher accordingly. The best way to combat something like this is to ask a lot of questions – find out how much typical things cost before you’re put in a position where you have to buy them. And make sure you’re asking someone that isn’t actually trying to sell you something – if you suspect one driver gave you an inflated price to get to Old Havana, it doesn’t make much sense to ask another cab driver how much it costs!

Remember, too, that Cuba is a lot like other Latin American countries in that they expect you to haggle a bit over the price. Unless you’re in store with posted prices, you can usually get them to come down from their first offer quite a bit. This is especially important when buying things at the market, catching a cab ride, and arranging for housing…

Wow. Great segue.

Next: Finding a place to stay