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gurley

Jul 28, 2003, 1:31 PM

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Credit Card Use

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Our greatly-anticipated trip to Mexico is soon coming! We (obviously) do not want to carry a lot of pesos with us at all times, so will need to buy pesos as we go. I would like to use my Visa card to buy pesos, but have been warned that ATM machines might "steal" or "destroy" it. That would be a big hassle.

Would we be best to go to a bank? Can we use our credit card at a bank, and charge a purchase of pesos on it? Would this be better, or should we instead bring (what I think are "old-fashioned") travellers' checks?

Suggestions would be appreciated!

Rose
God Bless the World - No Exceptions!

Uncle Jack

Jul 28, 2003, 1:54 PM

Post #2 of 38 (3055 views)

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Re: [gurley] Credit Card Use

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Don't even think about depending on travelers checks. Most retail businesses, restaurants, hotels and even a lot of banks will not accept them.

Whatever card you use, credit, ATM, etc. get a spare from the company. If you call them and tell them the situation, you can usually get a duplicate in a week.

There are several types of ATMs down here. At some your insert your card completely, but at most of the newer ones you either just "Swipe" the card past a reader or insert the card only half way and never have to let go.

uj

gurley

Jul 28, 2003, 2:09 PM

Post #3 of 38 (3053 views)

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Re: [Uncle Jack] Credit Card Use

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Thanks Uncle Jack!

That's a great recommendation, to ask for a duplicate card. I'll call right now! And I'll look for the newer "swipe" ATMs

Mexconnected is So Wonderful!

Rose
God Bless the World - No Exceptions!

gpk

Jul 28, 2003, 4:35 PM

Post #4 of 38 (3033 views)

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Re: [Uncle Jack] Credit Card Use

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Travelers checks are accepted in banks and cambios in SMA and Guanajuato, but the exchange rate is terrible. Use the ATM machines for the best rates--but check how much your US bank charges for foreign withdrawals--sometimes it's outrageous, which means you are better off making fewer, but larger, withdrawals. BITAL bank also charges for withdrawals here, so avoid those machines if possible. Finally--notify your bank that you will be in Mexico--I have had credit cards frozen twice because the companies ASSUME that if it is used a lot in MEXICO it must have been stolen!

Jean

Jul 28, 2003, 4:43 PM

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Re: [gpk] Credit Card Use

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I agree completely about informing your bank. When we first moved and charges started showing up on our cards and accounts, the bank in Canada immediately froze our accounts.
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Jul 30, 2003, 9:30 PM

Post #6 of 38 (2972 views)

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Re: [gurley] Credit Card Use

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One item I didn't see discussed in the message thread was the cost of funds associated with credit card peso withdrawals, which can be substantially higher than using either a traditional ATM card or an ATM/Debit Card to draw funds from a bank account.

For ATM and ATM/Debit cards, you can encounter two possible fees, one from bank or operator of the ATM, and the other from the bank from which funds are drawn (i.e. your bank). The highest fee I've seen from a bank-operated ATM machine in Mexico is $20 MXP; on the US side it's on the order of $3.50 USD. Both fees are avoidable if you're willing shop for (a) financial institutions in the US, and (b) ATMs in Mexico, at the cost of increased hassle. The actual conversion from the Pesos you obtain at the ATM to the US Dollars that are withdrawn from your bank account (assuming your using a US bank - I have no idea how well this holds for other countries) is done at a very favorable rate, within 1% of the target Interbank rate (the rate large financial institutions give each other when transferring 5 digit plus amounts of money).

For credit cards you'll encounter three normally percentage-based fees, one for currency conversion, another for cash advances, and a third for finance charges. Each different credit card (even those issued by the same bank) will calculate these somewhat differently, so you'll need to investigate your specific card(s).
- currency conversion fees - Both Visa and Mastercard tack on a 1% (of the transaction value) fee for converting foreign currency charges (whether they be purchase or cash advances) into US dollars. Many, but not all credit card issuers will add an additional 1-3% fee for foreign currency charges. The actual currency conversion is performed within 1% of the Interbank rate.
- cash advance fees - Your credit card issuer will normally charge between 2.5 and 3% of the amount of money you obtain from a ATM using the card. Some cards will have a minimum advance fee (United Airlines Mileage Plus Visa card, as an example charges 3% of the amount advanced with a minimum fee of $10). Some cards will also cap (limit) the advance fee that can be charged ($10 is not unusual) while for others the sky's the limit.
- finance charges - credit card issuers normally start charging interest on cash advances from the date of the advance up until the date payment is received. At 12.7% APR, taking 30 days to pay back the advance will add another 1% to the cost of funds.

Although each of these fees is only 1-2%, collectively they add up. As an example, let's look at withdrawing $3,000 MXP, with an exchange rate of $0.100 USD/MCP:

ATM or ATM/Debit Card:
- ATM Fee $20 MXP = $2 USD
- (abusive) Bank Fee for International ATM Use = $3.50 USD
Total cost of funds = $5.50 USD

Credit Card United Airlines Mileage Plus Visa used for example
- ATM Fee $20 MXP = $2 USD
- 1% Visa or Mastercard foreign currency conversion charge = $3 USD
- 2% First USA (issuer) foreign currency conversion charge = $6 USD
- 3% Cash Advance Fee with $10 USD Minimum = $10
- 30 Days Finance Charges at 12.7%/year = $3.13 USD
Total cost of funds = $24.13 USD

Personally, I'd use a credit card to obtain cash only in case of a dire emergency.

jennifer rose

Jul 31, 2003, 5:57 AM

Post #7 of 38 (2957 views)

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Re: [gurley] Credit Card Use

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Your concerns about having your ATM card stolen or consumed by the machine are overwrought. Yes, it can be retained by the machine just as easily in Mexico as in the your own hometown, but that happens rarely.

Forget travelers' checks. They are a bloody nuisance to negotiate.

Bring greenbacks, stashed them safely on your body in a holster.

Using a credit card for making all purchases that you can, viz. hotels, restaurants, store, will obviate the need to actually touch filthy lucre. Obviously, some rural artisan may not accept plastic, and there are some merchants who will offer a modest discount if you pay in cash.

raferguson

Jul 31, 2003, 9:24 AM

Post #8 of 38 (2926 views)

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Re: [ET] Credit Card Use

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I have found that not all credit cards have the same exchange rate for international use. One of mine charges a 2% fee on top of the 1% fee that Mastercharge puts on foreign exchange. (I am not talking cash advances, just ordinary charges). You can call the company before you leave to find out their policy.

My credit union ATM/debit card works very well, has a good rate of exchange, so I use it to get cash and to pay hotel bills etc.

I used to carry a couple of hundred in US cash and also traveler's checks. No more, now I depend on the ATMs, much simpler, less hassle, better exchange rates, etc. I might carry $100 US cash as a backup, but figure not to use it. The last time I used traveler's checks was probably 10 foreign trips ago.

I usually bring two cards to mexico, both ATM usable. My favorite card goes in my wallet, and I keep the other one with my passport. The second card often ends up in the hotel safe. I have my spouse carry one credit card in her purse, again as a backup.

Always carry some pesos, at least 300 pesos. Like in the USA, the less expensive places do not take credit cards, you need cash for taxis, etc.

If you are in a high crime area, like Mexico City, some people will carry their cash for the day in an easy-to-see wallet, maybe including some no longer usable credit cards, kind of an expendable wallet, while keeping their real credit cards and more cash in a hidden place, or the hotel safe.

You will not get that good an exchange rate on dollars at a shop or hotel. Some money exchanges charge extra fees, but that is usually in a tourist area. Most money exchanges have a posted rate in the window, if there are two rates you will get the worse of the two, they make their money on the spread. That is how to tell the good money exchanges from the bad, if the spread between buy and sell is large (10% or more), avoid that money exchange.

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pathall

Jul 31, 2003, 9:31 AM

Post #9 of 38 (2924 views)

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Re: [ET] Credit Card Use

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A tip for Canadians: if you can find a bank machine that will give you US dollars from your bank account, rather than Cdn dollars, you will get more pesos. We do that when we can, and walk down the street to a cambio and change the US dollars to pesos. The problem is to find a bank machine that will give you US dollars instead of pesos.
Pat

geri

Jul 31, 2003, 3:24 PM

Post #10 of 38 (2885 views)

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Re: [pathall] Credit Card Use

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An idea:

I have heard of quite a few reports of credit cards being "eaten" by ATM machines in Mexico. Recently, I was with a visiting friend who was getting money from the ATM. The card came out, but she didn't take it immediately, busy looking at the screen, getting her money or whatever ...and lo and behold the card went back in. So maybe this is a safety mechanism. (Luckily for us it popped back out again). Best to grab that credit card when it first pops out, rather than dallying.

Geri

wendy devlin

Aug 1, 2003, 5:53 PM

Post #11 of 38 (2824 views)

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Re: [geri] Credit Card Use

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Yes, no dilly-dallying around ATMS for another reason.

If you try too many times(usually 3), to perform a transaction, the machine could eat your card.

Speaking as someone who once had her ATM card in Mexico, 'eaten' by the machine...

and immediately trapped by the ATM's booths automatic doors clamping shut...

in San Cristobol de Las Casas.

It does happen. If rarely.

And since it took some time, an hour or so, before someone was found or authorized to let me out...it has led me to since then...do most of my ATM withdrawals within banking hours!

All of the suggestions above are helpful...and over the years I have gradually added to my contigency plans A, B, C...

Although these events might not be likely happen in places like say Guadalajara or Oaxaca City, where the monetary amenities are up to stuff, I have learned that just about anything can happen:

like ATM machines;

- 'running out of money'. Again another reason for using ATM's during banking hours.

-breaking down...or out of order.

Hence a stash of cash or even traveler's cheques as back-up funds.

Also please note...that it is also possible (when the bank is open, natch) to go inside with a credit card or debit card...and get money through someone authorized to make such transactions.

This helped us once, when we had a major car repair...when cash only was accepted(no credit card allowed) and the amount far outstripped our daily debit card withdrawal.

However the knowledge of such 'numbers' also carries the risk that an unauthorized person can also swiftly debit your account...as may have happened to one guy recently in Mazatlan to the tune of $10,000- of 10 $1000 withdrawals done one after another.

There are also other ways of credit card fraud...for example:

at a busy restaurant...

your card could be swiped through a machine but not the official one but another one just hidden below the counter...and the list keeps growing...

So try to keep head's up on this topic. Anyplace. Buena suerte! Wendy

Bill_N

Aug 3, 2003, 1:08 PM

Post #12 of 38 (2757 views)

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Re: [wendy devlin] Credit Card Use

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My wife and I just returned from a trip to Mexico which included 10 days in Morelia and 8 days in Lake Chapala area. We used our US bank (Charter One Bank) Debit (Mastercard) Card to extract Pesos from ATMs in both Morelia and in Lake Chapala at various banks. No problem whatsoever and no local fee charged from what we could tell when we made the transactions. And since we have completely free checking with our bank which includes ATM use at any "foreign/non Charter One Bank" we didn't get charged by Charter One for the transactions either. It may be that the fee is "built into the exchange rate". I am not sure but it seemed that we were getting the "going rate" for exchange between USD and Pesos. Anyway this is just to report that we had no problems with ATMs eating our card or anything. We found the banks to be very similar to US banks and the ATM machines to work very well. Every few days we just went to an ATM and replenished our supply of Pesos.

Many businesses and restaurants also accept credit cards and we used our credit card also whenever we could. This is especially true in larger cities. Only small business, restaurants and street vendors or Mercado vendors don't accept credit cards.

We found no problem whatsoever with this method of gaining access to money that we needed.

By the way we did take a limited amount of Travelers Checks with us thinking that maybe a hotel or Bed and Breakfast would accept them. But we found out that they were more trouble than they were worth. We had to spend an hour at a bank "cashing" them and naturally that meant standing in line and having the teller check our passports and write our passport number on each check and the address where we were staying at the time locally on each check etc etc. They were really more trouble than they were worth. I would not do it again if I went to Mexico. Take traveler checks that is. We found no problem with using ATMs to access cash.

Hope this helps any other people considering a trip to Mexico.

Regards

Bill Newell

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Aug 5, 2003, 12:14 AM

Post #13 of 38 (2702 views)

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More on Credit Card Cash Advance Fees

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Got a very interesting reply from Bank of America credit card services on how they calculate the fees associated with a foreign (non-USD) currency cash advance using one of their credit cards.

They wrote, in part:

The fee for cash advances is a minimum fee of $5.00 or four percent for ATM transactions and Convenience Checks. For cash advances taken in a banking center, the minimum fee is $5.00 or four percent of the cash advance amount. Quasi cash is a minimum $25.00 fee or five percent of the transaction amount.

Quasi is a transaction where a customer obtains the equivalent of cash. That is money orders, traveler's checks, foreign currency advances, lottery tickets, casino chips, vouchers redeemable for cash, or racetrack wagers.

Added to the already harsh 3% fee for foreign currency transactions (1% to Visa or Mastercard, and the remaining 2% to BofA) and interest accruing from the first day that an advance is taken and you've got all the fixings for a spectacularly bad deal for obtaining pesos.

(This post was edited by ET on Aug 5, 2003, 12:17 AM)

Nutibuddy

Aug 5, 2003, 3:04 AM

Post #14 of 38 (2696 views)

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Re: [ET] More on Credit Card Cash Advance Fees

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I live in France right now and I previously lived in Germany for 2 years. Wells Fargo Bank charges me $3.00 every time I use the ATM. This adds up too, but it seems cheaper than B of A. Plus in Europe, they have the Euro which is only .88 per one U.S. Dollar, so that really sucks!!

Kathleen :) :) :)

(This post was edited by Nutibuddy on Aug 5, 2003, 3:08 AM)

Aug 5, 2003, 7:44 AM

Post #15 of 38 (2679 views)

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Re: [Nutibuddy] More on Credit Card Cash Advance Fees

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Quote

....Wells Fargo Bank charges me $3.00 every time I use the ATM. This adds up too, but it seems cheaper than B of A....

It appears that you're confusing ATM/debit cards with credit cards. The purpose of my posts in this thread was to emphasize that although they share the same 85 x 50 mm form factor, when used to obtain cash the costs incurred are significantly different.

Carpediem

Aug 5, 2003, 8:12 AM

Post #16 of 38 (2671 views)

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Re: [ET] More on Credit Card Cash Advance Fees

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Well, I find the best way to save on fees is to take out a little bit more...not a lot as to be unsafe...but $100 taken out 3 times @3% is going to cost you 3 cents on the dollar, but $300 taken out once will only cost you 1 cent on the dollar....best way to cut down on the fees. Fees are usually per transaction, not by amount (talking ATM bank withdrawals...leave the credit card for emergencies only!)

Blackjack Davie

Aug 5, 2003, 6:07 PM

Post #17 of 38 (2630 views)

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Re: [Carpediem] More on Credit Card Cash Advance Fees

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On my last trip to Guanajuato, using my credit card, I was charged a whopping $10.00 for each ATM withdrawal. It was my first time using ATMs so I really had no idea what I was doing. I also used my ATM/Debit card and was charged only $1.00 for each transaction. Upon receiving my credit card statement, I called the company and was told that this was their basic foreign machine charge and there was nothing I could do about it. Needless to say, I will be using the debit card for all future trips. David

Nutibuddy

Aug 6, 2003, 6:31 AM

Post #18 of 38 (2602 views)

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Re: [ET] More on Credit Card Cash Advance Fees

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You're right, sorry about that. I guess I was no help at all...rofl (roll on floor laughing).

Bye.

Kathleen :) :) :)

Arthur Hunt

Sep 2, 2003, 1:02 PM

Post #19 of 38 (2491 views)

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Re: [Bill_N] Credit Card Use

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One of the main reasons for using Travelers checks is their safety. We were robbed at a fiesta in Guatemala a few years ago,losing $3000.in Am.Ex.travelers checks.
We drove into Guatemala city and the office there replaced them in about two hours,no charge. Art

PeggyS

Sep 2, 2003, 11:45 PM

Post #20 of 38 (2448 views)

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Re: [Arthur Hunt] Credit Card Use

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As Uncle Jack said, do not even think of depending on Travelers Checks. Not one bank, business or restaurant would accept them this past May. We had them as backup on our trip. Totally frustrated, we finally asked one bank why they refused to cash them. They said that beautiful forgeries had flooded the market and there was no way to tell real from fake. A money belt under your clothes with extra money and credit or debit card works better.
And once again I want to warn that the ATM in the Superlake grocery in Ajijic eats your card if you don't retrieve it fast enough - and my bank in the U.S. refuses to mail any cards to Mexico! Catch 22.

johanson

Sep 2, 2003, 11:58 PM

Post #21 of 38 (2447 views)

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Re: [PeggyS] Credit Card Use

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I traveled through Guatemala and Honduras in July. I used both American Express Traveler's checks and my Visa there without any problems. I regularly use my credit cards in Ajijic, but haven't tried travelers checks there for 7 months.

shoe

Sep 3, 2003, 10:24 AM

Post #22 of 38 (2406 views)

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Re: [johanson] Credit Card Use

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Lloyds in Ajijic has been taking my American Express travelers checks since I have been here (three weeks) without any problems. Both for deposit and to cash. They do call Amex to make sure they are authorized before they take them. They told me that is procedure now.

shoe

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jwp_007

Mar 12, 2007, 10:26 AM

Post #23 of 38 (2279 views)

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Re: [shoe] Credit Card Use

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regarding credit card currency conversion fees - here is a link from Bankrate.com showing hte rates some banks tack onto the 1% visa fee.
I currently use 1st bank for credit card purchases - the 2% they tack on adds up. I will be looking at Wachovia or Suntrust for foreign transactions.
http://www.bankrate.com/...ews/cc/20020513c.asp

ignacio

Mar 15, 2007, 9:48 AM

Post #24 of 38 (2171 views)

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Re: [ET] More on Credit Card Cash Advance Fees

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With Bank of America, get a checking account ATM, if you already don't have one.

Deposit your money in USA, withdraw here in Mexico with ZERO charges and a very competitive exchange rate, THAT IS CORRECT, no charges.....

all you have to do is look in Mexico for ATMs from Scottia-Bank or Santander-Serfin, which have the newer 'swipe' the card through, without letting it go.

These are very available all over the place, mostly in shopping centers, besides the ones in the bank.

Bloviator

Mar 16, 2007, 6:21 AM

Post #25 of 38 (2114 views)

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Re: [Nutibuddy] More on Credit Card Cash Advance Fees

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Unless they've changed, Wells Fargo charges $5.00 US per transaction in Mexico. It could be different now, as I long since quit using them for that reason.

Re balky ATMs lakeside: The ATM at Guad Farmacia is very tempermental. It took me six times yesterday to get it to read my ATM card. It may be that my card is getting threadbear, but I often stand in line behind people who try two or three times and then give up. I then get my money - eventually. It cannot eat your card, as it is a push in and pull out machine.

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