One of the first thing most travelers investigate before arriving to a new country is how much their money is worth. Obviously, the more value the USD holds in that country, the more you can typically do and eat. Due to the embargo restrictions, which are slowly easing up, the process for Americans to obtain and spend money in Cuba is atypical compared to almost all other countries.
#1 The first thing to know about Cuban currency is that there are two: CUPs and CUCs.
Cuba has a dual-currency economy, with the locals typically using Cuban Pesos (CUP) and tourists using Cuban Convertible Pesos (CUC). The CUC (pronounced “kook”) is held equal to the USD. CUPs have a pretty low value, as it takes 26.5 CUPs to make 1 CUC. So,
CUCs = tourist ; CUPs = local (generally)
1 CUC = 1 USD = 26.5 CUP
#2 As an American, including Puerto Ricans, you cannot use your debit or credit cards in Cuba… yet.
I’ve read that large credit card companies (i.e.: Visa and MasterCard) are working to change their infrastructure to allow Americans to use their US cards in Cuba. However, when we were there in August 2015 the changes were not yet in effect. This means that you need to research accommodations and activities, create a budget, add contingency funds and pull out enough cash to cover all of it prior to arriving in Cuba.
#3 Don’t convert US dollars to CUCs.
There is a high 10% tax on exchanging USDs to CUCs, so try to avoid it. If you’re traveling through another country before arriving in Cuba you can take out cash there or find a currency exchange in the states to acquire euros or Canadian dollars, which are generally the most valuable currencies on par with the USD. Make sure to take into account conversion rates when withdrawing money so that you have enough to cover your budget!
#4 Exchange your cash at the airport.
The line is often long but worth the wait. Currency exchanges are far and few between in Havana and often have even longer lines than at the airport. Plus, you’ll need some CUCs to cover the taxi to your accommodations in Havana.
#5 Tourists are allowed to use CUPs.
Many people wrongly believe that tourists cannot get access to the local CUPs, but in fact you can easily trade some of your cash for CUPs at the airport or other currency exchanges. CUPs have a low value so they are mostly used by tourists for street foods, like the fresh Caribbean fruits that are in abundance in Cuba. For example, one bunch of momoncillos (known as quenepas in Puerto Rico) costs around $10 CUP, or $0.38 CUCs. If you decide to exchange CUCs for CUPs, $5-10 CUCs will go a long way.