While many tourist areas in Mexico will accept US Dollars, it is almost always better to use Mexican Pesos (MXN). When you pay in dollars, local businesses usually set their own "internal" exchange rate, which is significantly worse than the official bank rate, meaning you end up overpaying for almost everything. Furthermore, any change you receive will likely be in pesos anyway, using their unfavorable conversion. Using pesos ensures you are paying the actual local price and makes transactions smoother at smaller shops, street food stalls, and "colectivo" buses where dollars are often not accepted at all. The most cost-effective way to get pesos is to use a local bank ATM (connected to a major bank like BBVA, Santander, or Banorte) rather than currency exchange booths at the airport. Just be sure to decline the "Dynamic Currency Conversion" offered by the ATM to get the best possible rate. Additionally, using a credit card with no foreign transaction fees is great for larger purchases, but always having a stash of pesos is essential for the authentic Mexican experience and better bargaining power in local markets.