Travel

An Exchange Rate Loophole That Can Pay for Your Flight to Mexico City

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Fly to Mexico City… For Free?!

Mexico City is a very underrated city. There are tons of cool neighborhoods, cheap and delicious food is everywhere, and there is endless art and culture to enjoy. You should go. Why not go for free? (Or at least for a handsomely subsidized rate.) Here’s how to do it by taking advantage of an exchange rate loophole.

What You Need:

  • About $9,645 USD in your personal checking account
  • An account at a bank that charges minimal withdrawal fees on foreign transactions and good exchange rates on such withdrawals.
    • HSBC and Citibank are good because they have their own ATMs at the Mexico City airport.
  • Approval from your bank to withdraw all $9,645 at once. This, I found out to my surprise, is possible; You just need to call in advance.
  • The cheapest ticket you can find to Mexico City.

Yes, yes, not everyone has enough cash to able to benefit 100% from this plan. And you still need to pay the full flight cost up front. Maybe it’s because you complain so much you don’t have $9,645 sitting around. Free doesn’t always come easy.

How You Do It:

  1. Buy your flight to Mexico City. From Vancouver, Canada I can regularly buy one for $500 or less. From the US it’s often much cheaper.
  2. Before leaving to Mexico, talk to your bank and let them know your desire to withdraw a large amount of cash on the day you fly home from your trip.
  3. Enjoy your trip in Mexico City. Eat, drink, explore, and be contento.
  4. At Benito Juarez airport on your way home, withdraw the $9,645 USD from the ATM in Mexican pesos. This should get you about 171,700 pesos (exchange rates will vary)
    •  Be sure to check the rate your bank offers you is not too far from the actual rate (just Google “USD MXN” to get the current rate).
  5. With those pesos, walk about 20 feet to the exchange office nearest you and trade them back for USD. There is zero commission, so you should get about $10,000 USD (again, exchange rates will vary).
    • Your best bet is to do a quick walk-through of the airport to determine which of the 50+ exchange offices has the lowest USD sell rate.
  6. Fly home with the cash securely in your carry-on bag. Don’t worry too much about theft; Airports are the safest place you can be with so much cash.
  7. Deposit the money as soon as you can once home, ideally at a branch in the airport.

There you go: You’ve turned $9,645 into $10,000, making a tidy $355. That should cover a lot, if not all, of your flight.

How Is This Possible?

In Mexico, locals are severely limited in their ability to deposit USD in their local banks. Local Mexicans who have accumulated USD cash (legitimately or otherwise) therefore have no choice but to buy pesos to be able to deposit their money. This creates a surplus of USD and a high demand for pesos, especially at the airport. It just so happens that you, through your bank, can supply those pesos, and make money doing so.

When you withdraw your $9,645 USD in pesos, you’re providing (via your bank) an outside supply of pesos to the exchange offices that desperately need them. They will eagerly buy your pesos from you for a higher price than you paid for them only a second ago when you withdrew them from the ATM. That’s called arbitrage. In other words, “free money.” The only thing stopping you from making much more than $355 from it is the $10,000 limit on the amount cash you can travel with.

Chris Blachut
Chris' proudest moment was when his grandma said he's the weirdest of her dozens of grandchildren. He likes different stuff, cheap stuff, sports, nachos, and Kim. He has no job but makes money.

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