Cuba is living a revolutionary period thanks to the diplomatic relationship recently established with the US. This will probably change many things and also the way to pay in Cuba and the currency available for business and travel purposes.
Today in Cuba there are two different currencies: The Cuban peso (CUP) and the Cuban peso convertible (CUC)
The conversion between CUP and CUC is around 1:24. This means than $1 CUC is 24 CUP. The most part of the Cubans are paid in CUP, or a small part of the wage is in CUC.
Supermarkets and shops selling basics, usually accept Cuban pesos and prices are way different from other types of stores where you can find other supply and products but you can only pay in CUC. For example for many Cubans is a problem to buy a broom just because the price is too high. It’s like buying something x24 more expensive.
Tourists generally have to pay in CUC almost anything. In fact, this is the primary reason why the Cuban peso convertible was introduced.
Why two currencies
In 1993, during the period of economic collapse known as the Special Period, the US dollar was made legal in order to encourage hard currency to enter the economy. This period concedes with the fall of the Soviet Union, the main source of supplies for Cuba at that time.
The US dollar became the currency used to purchase some non-essential goods and services, such as cosmetics, and even non-staple kinds of food and drink. US dollar was also used for tourism and Castro saw the opportunity to direct all this cash flow in the state coffers.
In 1994, the convertible peso was introduced at a par with the dollar but on November 8, 2004, the Cuban government withdrew the US dollar from circulation. CUC was officially introduced as a currency.
How to pay in Cuba
The best way for you to pay in Cuba is to change your money. You can do it as soon as you arrive to the airport. Since you need to take a cab to go in the city center, it’s better for you to have already some CUC. Some drivers accept euros or Canadian dollars but it depends.
In the cities you can then easily change your money at the Cadeca for a better exchange rate. So don’t change too much money at the airport.
Also, in case you are not pay in the national currency, calculate in advance how much is the conversion to avoid leaving more money. If you want to book a taxi in advance, you can do it HERE.
Some places already accept US dollars but the CUC is still the most used currency and the best way to pay in Cuba.
How to pay in Cuba: credit cards
Also credit cards rules are changing. If you are housing in a hotel you can pay with your credit card, Mastercard or Visa. This is a recent news since before wasn’t possible to pay with any credit card issued in the US.
“Debit cards with the VISA logo are usually accepted by your tour rep to pay for trips as well as purchasing goods at outlets that accept debit cards. They can be used in ATM’s (if you can find one and it is working) or to draw money from a Cadeca or Bank. MASTERCARD will not be accepted in ATM’s but, as with VISA cards, so long as they are issued by a non US-based bank, can be used to draw cash at the counter of a Cadeca or Bank.” Source: TripAdvisor
Transactions rate is about the 3%, which is basically the exchange fee. If you make a withdrawal the 2.99% foreign exchange administration fee is calculated for every transaction abroad.
The best thing for you to do is to call your bank and ask information about fees on transactions and withdrawals.