A lot of countries go out of their way to make spending money easier for tourists. Of course, this being Cuba things are a bit more difficult. Making sure you’ve got your credit card is not enough.

Also, relying on any sort of Internet transactions is fickle at best, since Internet access is sparse and expensive. That is why it’s important to plan your budget and how you’re going to pay for things well in advance. Dual-currency economy does not make it easy for the tourists, I’ll say that. There are four options at your disposal:

  • Cuban convertible peso (CUC)
  • The national peso (CUP)
  • Travelers’ cheques
  • Credit cards

Cuban Convertible Peso

The CUC is tied with the US dollar – dollar being the second unit of finance until 2004. This is a bit odd considering that Cuba has been under a US trading embargo since 1960ies.

But that aside, you will be dealing mostly in CUC. You will need it to pay your hotel bill, restaurant bills, taxi fares, bus tickets, cigars, you name it. Everything that people in a socialist country might regard as a luxury is paid in CUC.

The current exchange rate for convertible peso is 1 CUC = 1 USD. Of course, since all banks charge a commission the going rate will be 1 CUC = 1.03 USD.

Unless you’re exchanging dollars. In that case, the rate will 1 CUC = 1.13 USD. This is because the dollar is penalized and subject to an additional 10% fee. The animosity of the government towards Americans runs deep, it seems.

The National Peso

The national peso (CUP) is a currency in which locals are paid their monthly salaries and is worth significantly less than CUC. The exchange rate revolves around 1 CUC = 24 CUP. Locals predominantly deal in CUP – they call it Moneda Nacional – and use it to buy things at the government-run ration stores, bodegas.

However, the CUP is not reserved for locals alone. It’s a common misconception and an assumption with which many tourists come to the country. You can avoid CUP if you want but there are probably things you will want to buy that are easier to pay in CUP. These include:

  • Ice cream and orange juice at street stands
  • Second-hand clothes at stores
  • Small food items at street Peso Food stalls
  • Rides in inter-city buses
  • Rides in communcal taxis

For this reason, you will want to exchange 2-3 CUC into Moneda Nacional. Even though you can pay for everything in CUC, most street vendors that charge in CUP will be hard pressed to give you back change.

Now that I’ve covered CUC and CUP, a fair bit of warning. Familiarize yourself with banknotes of both currencies. There is a chance that you will run into a less than scrupulous tradesman who will try to give you back change in CUP instead of CUC so it’s better to be safe than sorry.

What Currency Should You Bring to Cuba?

The exchanged rate is determined by the government and is subject to change at any time. Keep in mind that the Australian dollar cannot be exchanged for CUC as of now. This is true for Scottish and Northern Irish banknotes as well and the Mexican peso has the exchange slightly penalized so it’s best to skip bringing it.

If you insist on exchanging it you need to be aware that there is a 10% surcharge for it on Cuba.

The following currencies can be exchanged in Cuba:

  • Canadian Dollars
  • Pound Sterling
  • Japanese Yen
  • Euro EUR.
  • Swiss Francs
  • Mexican Pesos
  • Danish, Norwegian, and Swedish Krona

In my opinion, the best currencies to exchange for CUC in Cuba are Canadian Dollars, Euros, Pounds, Yens, and Swiss Francs. You will usually get a good deal for those. You will be hard-pressed to exchange your Krona’s in local bank branches and these will probably necessitate a trip to the main branche.

You can exchange your money for CUC at every Cuban bank as well as the CADECA exchange houses. You will find them in every Cuban town but your best option is to do it as soon as you land, at the airport.

Exchange enough to pay for a tax fare and a bit more and exchange the rest once you get in town as the rates are a bit more favorable.

Keep in mind that coins can’t be exchanged anywhere on the island so leave them behind before your trip.

Travelers’ cheques

Travelers’’ cheques might not be your best bet in Cuba. The fact is that there are a handful of places that will exchange them, you cannot replace them in Cuba if you lose them, and the commission charged is anywhere between 3 – 6 %.

If your heart is set on travelers’ cheques than keep in mind that Eurocheques, Travelex, and Citibank are not accepted. Your best bet would be American Express, Visa, Thomas Cook, and Citicorp. However, this changes on a daily basis so you might want to check with Banco Financiero Internacional and CADECA prior to your trip.

When and if you find a bank willing to exchange traveler’s cheques for you, keep in mind that you will have to show your passport and the receipt from the bank you bought the cheques from, otherwise forget about it. Even a slight discrepancy in the signature might get your exchange request refused so make sure to copy the exact signature you have on your passport.

Visa & Mastercard

For Cubans, plastic money is still a bit of a mystery. You will get away with paying with credit and debit cards in most hotels and upscale restaurants but if you try it with private enterprises you will probably get a blank stare in return.

ATMs are slowly gaining numbers on the island but those that will accept foreign cards are still few and far in between and can mostly be found in CADECA offices and bank branches. The withdrawal limit is usually $ 190 (actually, it’s $ 200 but the exchange fee is included in the limit as all currencies are converted into US dollars since CUC is not internationally recognized).

USA-issued credit cards are completely useless, as well as Diners and American Express cards, regardless of the country of issue. Occasionally, hotels will take American Express cards, but I don’t advise you to count on it. Maestro and Cirrus cards are also not held in high regard.

If you own a MasterCard credit or debit card then you’re in luck. These are commonly accepted by ATMs, large hotels, restaurants, and some local businesses.

As you can see, cash is still king in Cuba. You can take your chances with cheques and credit cards but your life will be a whole lot easier if you have CUC in your wallet.

That said, a combination of credit cards and cold, hard cash might be your best option. Use cards to pay wherever possible but rely on cash when dealing with locals and local enterprises.