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smartest way to purchase in Peru?

Delray Beach...
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smartest way to purchase in Peru?

I will be in Peru for 10 days and am wondering how much US currency to bring, whether to use a credit card for purchases, or to withdraw money from an ATM machine while in Peru. I would hope to avoid as many fees as possible. I welcome your advice and thoughts! Thanks...

Chicago, Illinois
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1. Re: smartest way to purchase in Peru?

You'll get some different opinions on this. Mine is to not bring any cash with, or at most a little in small bills for tips. Use a no foreign transaction fee credit card for whatever purchase you can and use an ATM to pull cash out as needed. That way you don't have to bring a big stack of cash with you and worry about losing it. And ATM fees are usually pretty small compared to currency exchange fees. ATM fees are maybe $2 to $4 no matter how much you withdraw and what your bank charges you. Currency exchange fees are more than that and then you have to worry about exchange rates.

Los Altos Hills, CA
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2. Re: smartest way to purchase in Peru?

It depends on whether what you need to purchase is priced in dollars or soles.

Note that many (if not most) mid-high range hotels price in dollars. In this case, it's best to bring $$ to pay for your hotel, as you would get a very unfavorable exchange rate if you were to pay in soles. This is also true for the high-end stores. Many of these establishments would charge 5-10% extra if you were to use a credit card.

However, all restaurants, entry tickets, street vendors price in soles. In this case, it's best to pay in soles using either a credit card (that doesn't charge a foreign exchange fee), or get soles from an ATM. The best ATM in Cusco is Scotia Bank, with no fees. The worst is the GlobalNet ATM's that have an exorbitant fee as well as a limit of s/300. There's a Scotia Bank right in Plaza de Armas.

california
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3. Re: smartest way to purchase in Peru?

I use a Capital One Debit Card at a Scotiabank ATM. No fees at all. Stay away from Global Net And BCP.

A few hotels were able to charge me in USD at the quoted rate by Credit Card with no added fee. I also have the nofee no forex Cap One CC. If you do a lot of international travel it's worth getting.

Cusco, Peru
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4. Re: smartest way to purchase in Peru?

As mlgb said, Scotiabank does not charge a fee to use their ATM's and there are several of these around Cusco, one being less than 1 block from the main plaza on Av. El Sole

I would do my best to avoid using a credit card if at all possible, despite what some people may think you will pay to use it, either directly or indirectly, banks here charge around 6% on Credit Card purchases, so you will either have this added to your bill, or it is built into the cost of the goods or services.

While the hotels may not have charged mlgb an additional fee to pay by credit card, he most likely could have negotiated a lower rate at check-in if he indicated he was paying in cash. Cash is king here in Cusco and the best way to keep costs down is to always negotiate a cash price, and avoid using plastic.

california
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5. Re: smartest way to purchase in Peru?

If you ask the hotel, they will tell you if the price is the same in cash or by credit card. Despite what Lyle says, some do not surcharge. This is typically more common in the mid range and up (say $60 per person).

For those who do not mind showing up without reservations and walking from hostel to hostel you may find a cheap rate at the last minute (walk in rate). It isn't my idea of fun at 11,000 feet but many budget travelers do it, if you want to take your chances.

However in most cases I prefer to reserve in advance and it is not uncommon to get a discount that way.

Edited: 10 October 2013, 13:42
Cusco, Peru
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6. Re: smartest way to purchase in Peru?

mlgb is thinking a little narrow, to repeat, you will pay directly or ‘indirectly’ and you don’t have to be here to negotiate a cash price with a hotel.

A property or business that does not accept credit cards will typically have cheaper prices than those that do, as such you are paying for using a credit card indirectly (no surcharge). If a store that you are shopping at accepts credit cards, do a little haggling and you will usually find that if at some point (towards the end), you indicate you will pay with cash, the price will drop a little more.

As for lodgings, try emailing the property and tell them you would like to book a room and wish to pay in cash when you are here, you will most likely still have to secure the reservation with a credit card, but as long as you pay by cash, you should get a better rate. This does of course work best in person, but can be done by email or by phone if possible. Another option would be to find a property that does not accept credit cards, these will typically offer better base rates and you might still be able to negotiate a reduced rate.

Think of it this way, the business is going to have to pay the bank something for every credit card transaction. To think that they are just going to absorb this cost is foolish; knowing this you should always be able to get a reduction in rate for paying cash. The fact that a business does not add a surcharge for those using a credit card, only means that the cost is being shared by everyone, even those paying with cash.

california
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7. Re: smartest way to purchase in Peru?

Lyle, let me guess, your b&b doesn't take CC or surcharges for their use? Very common with small businesses.

One could say the same thing about having a website, providing a decent breakfast (more than a roll and Nescafe), 24 hr hot water, towels, shampoo, etc. Obviously everything is a cost of business?

Having spent probably 200-250 hotel nights in Peru, I can tell you that there are nice (not shoestring) hotels that charge the same in cash vs cc. There are also some that quote rates in USD and then screw you on the exchange if you try to pay in Nuevo Soles, how does this compute?

There are many other ways to get discounts, often find 40-50% off by using Booking.com, expedia, etc. Sometimes hotel has a website or offers discount when you ask in writing.

The big discounts are based more on hotel need to fill rooms, not 5-10% surcharging for credit.

Chicago, Illinois
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8. Re: smartest way to purchase in Peru?

To add another opinion none of the hotels we booked in our two week stay offered us cash discounts. We booked directly through the website or via email and I believe the prices were all the same. These were mostly hotels charging less than $100 a night, so even if they discounted a bank fee, that's probably not too much, probably $3 to $5 a night at most. To me a couple dollars a day for the convenience of not having to carry wads of cash around or constantly stop at ATMs or exchange booths or pay exchange fees seems worth it.

Cusco, Peru
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9. Re: smartest way to purchase in Peru?

You are correct mlgb, as a small business we do not accept credit cards; we feel it would be an added expense that we don’t want to have to pass on to our guests, but that was not my point. For those that don’t want to pay extra, often times you can ask for a discount for cash if a property takes credit cards and get one. We always travel on cash and only use plastic in case of emergency (our preference). We also negotiate the cost of lodgings, in local currency, when booking so that there are no surprises. One of the reasons we like to pay in cash is that way, we know what rate we are getting, as it is determined when we exchange the currency.

Yes using a credit card is a convenience and often times part of the service you are paying for, but this is most often an optional service, while most may not think of asking for a discount in lieu of “providing a decent breakfast (more than a roll and Nescafe), 24 hr hot water, towels, shampoo, etc” some might. While it would be difficult in most cases to not provide hot water for a discount, we have had guests that have ask for, and been given, a discount in exchange for not having breakfast.

While I am sure there are those that don’t mind paying for the convenience of using a credit card, there are also those like myself that prefer not to. While I don’t have a problem paying for the things I will use (providing a decent breakfast, 24 hr hot water, towels, shampoo, etc.) I don’t feel that I should have to pay for some body else’s use of a credit card, so when we book a lodging, we always ask for a cash discount, and if one is not offered, we find another place. While a 6% fee is generally not much on a simple purchase, totaled up over the course of a trip, it could add up.

Delray Beach...
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10. Re: smartest way to purchase in Peru?

Thanks everyone for your thoughtful replies. All my lodgings have been booked by my tour group company. I am thinking more about paying for meals, souvenirs, and possibly extra tours. When I arrive in Lima, I will exchange my US dollars for the local currency. Where is the best place (best rate) to do this? Thanks!