Aug 3, 2009, 12:06 PM
Post #4 of 83
Re: [gpkisner] Avoiding bank fees for ATM withdrawals
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The 3% fee you were paying was probably the international monetary transfer fee. Everyone withdrawing money from a US bank using a ATM in México or any other non-US country pays a monetary currency transfer fee. The banks did not disclose those fees to their clients until about 3 or 4 years ago when by court order they were required to disclose them.
A few years ago, I had noticed that the apparent exchange rate I was getting for ATM withdrawals was always a little less than it should have been. I started doing some research and I finally found the answer on my credit unions website under the heading “international transactions.” There are a couple of companies that provide a service to banks to convert US Dollars to a foreign currency.
My credit union uses the Visa exchange service. Visa charges my credit union 1% of each transaction as their fee. My credit union stated that since they are a non-profit institution, they were just passing the 1% fee on to their members and not marking it up. If your bank used to charge you a 3% fee, they were probably dinging you for an extra 1 or 2%.
Since the courts forced disclosure of those fees, when I check my credit union account now, the ATM withdrawals are always followed by a transaction labeled “withdrawal ATM fee” if I click on it to see the details, they are “Int'l Transaction Fee Assessed by Visa.” It is always just 1% of the Dollar amount withdrawn, there are no other fees.
The Mexican Peso is a “floating”currency, the exchange rate is based on market conditions, that is, the ask/bid/and sell price of the Peso at any given time. It is not set by any government, or private agency, it changes every hour throughout the business day.
The posted exchange rates are the rate at the close of business on the previous business day, the posted rates do not change on weekends or holidays. The rates posted at banks, etc. are either the previous days rates, or whatever they wish to give you. If they are giving a lower rate than the current rate, that is not a crime if their customers are willing to accept it. The privately owned cambios always give a lower rate, it is the only way they can earn money and stay in business.
The exchange rates I get when using my credit union issued ATM/debit card are usually never precise, but are always within a few Cents of the amount that I calculate doing all the math. Sometimes the tiny difference is in my favor, sometimes not. It's a wash and I am never concerned about it.
The 1% exchange fee is not high enough for me to be concerned about it, and if I started using a regular US commercial bank it would probably be higher. Using a Mexican bank is not a viable option for me, since I was here when all the banks in México were nationalized and looted in the 1980s. One of my wife's well-to-do uncles had a US Dollar account in a Mexican bank for his retirement plan. After his untimely death before he could retire, the government owned bank told his widow that they had no record of him ever having an account with them, his money was all stolen. My wife's aunt lived the last years of her life in poverty, we all tried to help, but she was poor.
It will be a cold day in hell before I ever trust a Mexican bank with any important money.
"The supreme happiness of life is the conviction that we are loved" - Victor Hugo