Sep 03 2012

Paul’s Monthly Tip to Live for Less in Costa Rica: Pay Cash and Save

One of the easiest ways to save money in Costa Rica is to pay cash for everything. Almost all businesses will give you 5%-10% off if you pay en efectivo (in cash) and don’t use a credit card.

In reality, all businesses are supposed to charge the same to credit card and cash customers, but rarely do. A few places will actually add a few percentage points to your bill if you pay by credit card. So the incentive to use cash is even stronger.

As you can imagine, they encourage cash sales for several reasons, principally to avoid a paper trail and, hence, “avoid paying taxes” which is a national pastime in Costa Rica. This is especially true in the service industries but can also hold true when buying retail items. Here’s a list of some of the places that will give a cash discount if you ask for it:

  • restaurants
  • hotels
  • auto mechanics
  • beauty and barber shops
  • small food stores
  • furniture outlets
  • auto parts stores
  • pharmacies
  • health food stores
  • and many other small, and not so small, businesses.

But if you don’t ask, the retailer won’t give you the cash discount. They will still do the cash transaction without you even knowing that you could have had a cash discount. Naturally, they love this, since it’s an extra 5%-10% profit that goes right to the bottom line and perhaps off the books. So always, always, ask for a cash discount. ¿Hay un descuento por dinero en efectivo?

Remember, also, should you use your U.S. bank credit card, you may incur additional bank charges on every purchase. Check with your bank to see if this applies. The bank fees, often 1.5% or $.75 on a $60 purchase can really add up. So this is another very good reason to pay with cash.

Oh, by the way, don’t forget another one of Paul’s Money Saving Tips — use your “Gold Card” if you are 65 and qualify and get an additional cash discount!

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