The currency of Costa Rica is the Colon and as of February 2010, its rate of exchange is c560 to 1 USD. Over the past year the Colon has been fluctuating against the U.S. dollar from c550 to as high as c580.
When bringing down US Dollars to Costa Rica it is very important to inspect your money and make sure that there are no rips or tears. It is nearly impossible to exchange damaged U.S. currency in Central America. Also, as to US law it is illegal to transport more than $10,000 USD without declaring it first to US customs.
There are four main banks in the country and they are all nationalized. This means that the government owns them and are the only ones allowed to have checking accounts. These banks are Banco Nacional de Costa Rica, Banco de Costa Rica, Banco Agricolo de Cartago and Banco Popular. These banks have the best exchange rates for cash, but normally they charge up to a 3% fee for traveler’s checks and the lines are usually over an hour long.
There are a number of smaller banks, mostly in San Jose, that have very short lines, but charge a little higher transaction fee. ATM machines are now quite common in the major cities. Savings and checking account cards that have the Plus, Cirrus or Interlink systems are usually very easy to use. Most tourist destinations such as Playa Dominical and Playa Tamarindo now have cash machines.
During the weekends or on holidays all banks are closed and the best bet for exchanging money is at one of the main hotels. The exchange rates are poor and the charge is usually high but the money is real and there is no chance that you will get ripped off. One of the biggest rackets in Central America is counterfeit currency. Moneychangers are legal in Costa Rica but most of them will gladly take advantage of an unsuspecting gringo who is not careful. This is why you should never change money on the streets.
Visa is the card of choice in Costa Rica and is accepted at most hotels, restaurants, bars and gift shops. MasterCard is becoming more popular and American Express is widely accepted. Getting a cash advance off your credit card is possible in San Jose and most major cities. The main banks will process your transaction, but the wait can be very long.
Gambling is legal in Costa Rica and all casinos allow players to take cash advances off their cards. If, at the end of the night you are up, you can ask the casino to cancel the advance and it will not be debited from your credit card account.
Finally, make sure you buy a money belt or neck pouch, they are cheap and easy to use and can save you a great deal of grief. For more information on the need to use a money belt, please see our Crime in Costa Rica article.