Cuba - Money & Costs
Money & Costs in CubaCurrency: Cuban Peso
Cash US dollars and 'convertible pesos' (equal to US greenbacks in Cuba; worth the same as Monopoly money elsewhere) remain the currency of choice at state-owned and licensed private hotels and restaurants; bus, train and airline offices; and most other tourist-oriented enterprises. Cuban pesos, or moneda nacional, can be used at local venta libre stores, cafeterias and street stands, cinemas, and many other businesses away from popular tourist destinations. Cadeca, with kiosks throughout Cuba, changes currency at fair rates.
Credit cards issued by US companies may be accepted, but be aware that the US could theoretically confiscate the entire transaction, leaving you high, dry and further in debt. A Visa or MasterCard (or two) issued by a non-US bank is the way to go. Traveler's checks denominated in US dollars, even those issued by US banks (at last report, the Banco Financiero Internacional was happily accepting American Express), can be cashed with a 2.5-4% commission.
For a Caribbean destination, Cuba is still reasonably affordable, though not cheap. A double room in a medium-priced beachside resort runs US$50, US$100 all-inclusive. The same room in a state-run hotel costs around US$35, and in a private residence US$15-25. A meal in a state-run restaurant is US$10-15, while dinner for one at a paladar (privately owned restaurant) averages US$7. Taking the bus or train runs about US$4 for 100 miles (160km), while a rental car could cost as much as US$100 a day, more than in neighboring Florida.
Cuban tourism workers rely on tips. People who deserve a US$1 tip include museum staff who give you a complete tour, hotel guards who watch your rental car all night, helpful bus drivers, attentive waitstaff or anyone in the service industry who goes beyond the call of duty. Do not offer money to officials to obtain preferential treatment; governmental corruption is rare in Cuba and attempted bribery will only make things worse.
Paladars may or may not add 10-20% onto your bill as a 'tax' or 'service charge.' If you suspect a scam, ask to keep the bill and see what happens. All private businesses are heavily taxed to discourage competition with state-run entities, and the added costs are, of course, passed on to you. Avoid jineteros (touts) who offer to lead you to a room or restaurant, unless you don't mind having an extra US$5 or so tacked onto your bill.
Refrain from handing out money or anything else to children or beggars on the street. Cubans are not allowed to beg from tourists, and plainclothes police are on duty in most places where tourists and Cubans mix. It may be gratifying to hand out trinkets to people you view as needy, but these people could be questioned as soon as you disappear from sight, and you may be personally responsible for sending someone to prison.