Can you use US Dollars in Costa Rica?
Although I sometimes wish we could get rid of the local currency, the Colon, I must admit that they designed beautiful bills. Money is not something you usually look at for its beauty but for the value. In colones, it is easy to be a millionaire, the reason we use the US dollar for transactions such as buying a home.
Adjusting to living in Costa Rica started with thinking in Spanish and thinking in Colones. That’s where you notice someone just arrived to Costa Rica; they carry a wad of dollar notes in their pocket and they calculated everything back to US dollars. Is that what you have to do when you visit or live in Costa Rica?
The use of US dollars in Costa Rica is pretty common, and you can pay with US dollars almost everywhere. Most stores, bars and restaurants will accept your US dollar for payment, but always at a terrible exchange rate.
Paying articles and services with US dollars is indeed possible but it is not to your advantage, so use that method only for an emergency. If you use the US dollar for payments, you’ll be paying 10 – 15% more for everything you do or purchase.
The exchange rate
For many years in the past, the exchange rate of the Colon was pretty steady and the Central Bank of Costa Rica adjusted the rate by mini devaluations daily, from 1984 – 2006. Almost everything in Costa Rica, products and services alike, were charged in Colones because the rate was so predictable. Only luxury real estate and large tracts of land were offered in US dollars at the time.
Before you leave home
Check the exchange rate before you fly at Banco de Costa Rica or any other bank’s website, where it says “exchange rate”. Since you are buying Colones (and selling dollars) you will receive the lower amount of the two. This will give you a general idea what the US dollar exchange rate is when you arrive in Costa Rica.
2,000 Colones is worth about US$3,73 at today’s rate
When you arrive
When you arrive at the International airports it San Jose and Liberia you can exchange at the airport, where you will get a bad exchange rate, like at most airports. You might as well just use US dollars for everything you need, for the first day or so, and exchange as soon as you get a chance.
Taxis and buses
Taxis at the international airports charge in US dollars. Everywhere else, taxis charge in Colones.
Where to exchange
You can exchange your dollars at any bank in Costa Rica just bring your passport when you do.
5,000 Colones is worth about US$9,31 at today’s rate
Restaurants and bars
Many restaurants and bars love you to pay in dollars, but don’t. 10% Tip is already included in your bill. Don’t tip above that more than a bit of change. Most credit cards are widely accepted in Costa Rica.
Taxis and hotels
By tipping a waiter or local taxi driver US$1, you are not doing this person any favor at all. That person would have to go to the bank and stand in line for 30 minutes to be able to exchange that dollar, unless that person has a US dollar account at a bank. Tipping in US dollars is normal at the airport and in your hotel.
Real estate and cars
Costa Rica real estate and cars are usually offered and sold in US dollars because they are expensive items. Only cars older than 5 years and rural real estate are usually negotiated in Colones as they are generally marketed strictly on the local market.
Sometimes I get emails for clients asking if properties on our website are listed in Colones or in Canadian Dollars.Any real estate over $50,000 you will find listed in US dollars. On our website, everything is listed in US dollars. For real estate for sale in the Central Valley, check our inventory.
Rentals under $600/month are often negotiated in Colones. You do need to know that the leasing law allows for a 15% raise every year and that rents in US dollars usually stay at the same rental rate for 3 years, unless negotiated differently. Check for rentals on our website.
10,000 Colones is worth about US$18,62 at today’s rate
Every so many years, the Costa Rican government has had to re-design the Colon because of its devaluation. Since I moved to Costa Rica, they have gotten rid of the 5 centimos (cents), 10 centimos, 25, centimos, 50 centimos, 1 colon (large size), 2 colones (large size), 5 Colones (large size) and the 5, 10, 20, 50 and 100 colones bank notes and moved over to much larger currency.
The newest bank notes, created by the Liberación Nacional government of Laura Chinchilla (2010 – 2014) are beautiful to look at, but not a good choice of paper. Treat them with care or they’ll fall apart. Don’t fold them in your wallet because you’ll never be able to unfold them again. Look at them and spend them, don’t keep them too long.
Don’t show off
Don’t show off, don’t carry wads of dollars on you and if you do, don’t show them to everyone around you. You’ll be asking for trouble.
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I DO want to remind our readers that we appreciate any referrals you can send us. I know you all meet people on the plane, in the supermarket, at yoga, at the gym, at the Blooms ladies club, at the potluck organized by your community. Please remember the GoDutch Realty agents when you talk about your home in Costa Rica, when you meet someone who wants to purchase one, we appreciate it.