I’ve received requests to update the issue of currency with regards to Cuba. A few years back, it was especially confusing, because there were several options. Two years ago, the U.S. and Canadian dollars were trading at approximately 1:1. Then the exchange rate turned negative for USD’s, which were suddenly only worth about $0.90 Canadian dollars last year. Now the rate is improving, so that one USD exchanges today for $0.93 Canadian. The bottom line is this–if you are an American traveling to Cuba, you should first pay for as many items as possible with a credit card while still in the US–flights to Havana, domestic flights (e.g. Havana to Santiago, etc.) hotels, tours, all-inclusive resorts, etc. Once you arrive in Cuba, it is now not worth it to convert to other currencies (Euros, Canadian dollars,etc), then convert those to Cuban CUC’s. By the way, you won’t be able to use your credit cards in Cuba–not yet.
In a nutshell, the CUC (pronounced “kook”) is pegged to the USD. In Cuba, there is about a 3% conversion fee, which is typical over much of the world. However, there is also a penalty in Cuba of 10% for converting USD’s. Thus, if you convert a US hundred dollar bill, you will receive about $87 CUC’s. If you have any Euros or Canadian dollars at home from previous travels, bring them along to convert directly without a penalty.
It is perfectly legal to possess USD’s. In the past few years, there were few places in the tourist areas that accepted dollars without charging a big premium. (For example, if a taxi ride from the airport was $20 CUC’s and you didn’t have any, you would probably offer $30 USD’s.) However, in the last year, the relative value and utilization of USD’s has increased substantially. In other words, more and more Cubans are accepting and trading in USD’s once again.
I think this has a lot do do with a significant increase in the amount of travel abroad by Cubans, who now find it easier to obtain exit visas, and want to take USD’s with them. It may also have something to do with rumors that Cuba may soon end the dual currency system. Today, locals can buy only some basic items with the”national currency” –the Cuban Peso (CP), worth about $0.04 USD. It may also have to do with rumors that the 10% conversion fee for USD’s may be eliminated. (Ten years ago, it was 20%.)
So if all this is confusing, it was meant to be. In summary, pay for as many items as possible by credit card before you leave the U.S., and take 5-10 (or more) US hundred-dollar bills along with you. You can convert them one at a time as needed. When leaving the country, you can usually find locals at the airport who will trade you at a 1:1 rate. So if you have $100 CUC’s, you should be able to trade for $100 USD’s.
As with everything else involving travel to Cuba, all the above is subject to change on a moment’s notice.