Of the eleven countries we’ve visited on this trip, Argentina is the only one where you do NOT get cash out of ATMs and avoid using your credit card at all costs.
The cheapest and easiest way to get local paper currency is usually by withdrawing cash at an ATM with our Charles Schwab Checking Account, which refunds all ATM fees. ATMs work well because they convert at the official exchange rate, usually with little to none of the markup that you find at currency exchange houses.
But this isn’t the case if you want to get cold, hard Argentine Pesos. So what’s the deal?
TL;DR – No one uses the “official” exchange rate
Argentina actually has two exchange rates.
I know that’s weird. Bear with me.
The “official” exchange rate, which you’ll find when Googling the currency conversion, is a fixed rate set by the Argentine government. It’s around 157 Argentine pesos per dollar. If you’re shopping online for anything priced in Argentine pesos, including local airfare, hotels, and tours, all ecommerce websites will use the official rate to convert the price in Argentine pesos to US Dollars. Your bank and credit card companies will also use the official rate to convert any Argentine transactions made with your account.
The exchange rate everyone actually usesis the black market exchange rate. Because of their incredible inflation, Argentines love the US Dollar. They will pay handsomely to convert their savings to greenbacks on the black market since access to US dollars is restricted by the Argentine government. Delicately referred to as the “blue dollar” rate, it was over 300 pesos per dollar at the time of our visit. Today, February 2023, the blue dollar rate has increased to around 370 pesos per dollar according to Western Union.
See how that’s an incredible difference? If you use an ATM or credit card in Argentina, you are paying twice as much compared to exchanging and using cash.
Crazy.
A Brief History of the Argentine Peso and Inflation
Argentina has had a volatile government and poorly managed economy since the Great Depression, and as a result, the Argentine Peso has an infamous history of chronic inflation. During the 1980s, annual inflation regularly exceeded 100%, hitting a peak of 3,079% in 1989.
No, that’s not a typo – inflation was over 3,000%.
You know how we’re all upset about a dozen eggs being $7 right now? Imagine adding a few zeros to the end of that number.
During the late 1980s and early 1990s, inflation was so bad that grocery stores stopped marking the prices on items. Instead, they would announce price changes over the store’s loudspeaker while customers were shopping. Our Buenos Aires walking tour guide described shopping with his mother and putting anything they could afford in their cart as quickly as possible because they might not be able to afford it next week (or at the time of checkout). This kind of inflation erodes personal wealth and stops regular Argentinian people from ever getting ahead in their personal finances.
Inflation calmed down in the mid-1990s, and Argentina even experienced deflation from 1999-2001. Inflation returned and bounced around through the aughts.
Since 2010, there has been a steady increase in the double-digit annual inflation rate. In 2022, inflation in Argentina was estimated to be 72.37%. To put this in context, if the menu posted online for a restaurant Pete and I were interested in was over 12 months old, I needed to double the prices. If the menu was 4-5 years old, I needed to multiply the numbers by ten – or more.
Argentina’s wacky economic situation – including its nine defaults on its debt, lack of productivity, and complete reversal of its economic development in the early 1900s – has prompted many economists to study the so-called “Argentine Paradox.” According to Wikipedia’s overview of Argentina’s economy, “The Nobel prize-winning economist Simon Kuznets is said to have remarked that there were four types of countries: the developed, the underdeveloped, Japan, and Argentina.” Econ nerds can read more here.
How to get cash in Argentina at the Blue Dollar Rate
How to get cash at Western Union
So back to the point: how do you get the black market rate…somewhat legally?
The answer is simple: Use Western Union. (That’s an affiliate link that gets you a bonus on your first transfer!)
Western Union has both a website and an app you can use to send money to yourself. I was able to sign up for Western Union, transfer money to myself, and pick it up at the nearest location within about an hour.
When I transferred money to myself, it was approved within a matter of minutes. However, if you want to send money to someone else (like your spouse), you may need to complete a verification check with Western Union. When I transferred money for Pete to pick up along with me, I received a phone call from Western Union about 30 minutes later and had to answer various identity questions. It was relatively painless, but I wish I had waited for the call in the privacy of our AirBnB.
The maximum transfer with Western Union is AR$50,000. All transfers are subject to local currency availability. Because Western Union is so popular, it is possible for branches to run out of cash, especially on payday, Fridays, weekends, and holidays. Try to plan your arrival early in the week and visit the largest Western Union locations. Have a backup plan for your first day or two in Argentina in case you have trouble finding cash. (We did not encounter issues getting cash during our trip.)
All three Western Unions that we visited had long lines. We waited anywhere from 30-60 minutes. Give yourself plenty of time.
How to Get Cash at a Local Cambio (Exchange House)
If you don’t want to or can’t use Western Union, you can also exchange money at the blue dollar rate at a local exchange house or cambio. In Buenos Aires, the cambios are all located on Florida Street. Ask your tour guide or hotel for a recommendation.
Many hotels, restaurants, and other businesses will accept payment in US Dollars using the blue dollar rate. Make sure to ask for their exchange rate first though, as some (especially in the airports and touristy areas) will exchange at the lower official rate. As long as they’re using something close to the blue dollar rate, it is a much better deal to pay in US cash than with your credit card.
Will you ever be able to use a credit card in Argentina?
We will note that there was a rumor during our tour in Buenos Aires that the government had just passed a law that day allowing for credit card companies to use the blue dollar rate when converting their transactions. The law was too new for us to believe that anyone had put it into practice yet, but you may want to check your bank’s exchange rate if you’re headed to Argentina in the future.
Despite the poor exchange rate, most businesses do accept credit cards if you don’t have cash.