Papirex
Apr 7, 2005, 3:29 PM
Post #7 of 18
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Casas de Cambios are a private business, not a public service, they make their money on each transaction they process. While they don’t charge a separate fee, they do give a lower exchange rate to make a profit..
The exchange rate fluctuates hourly, it reflects the bid-ask-sell rate of a particular currency. It is important to note that the published exchange rate on any given day is yesterdays closing rate. When you exchange money here, you are not simply exchanging it, you are buying Pesos with Dollars. The published exchange rate is usually for buying Dollars with Pesos, it is slightly higher than the rate you will receive when buying pesos with Dollars. See: http://www.oanda.com/convert/classic?margin_fixed=0&expr=USD&lang=en&pref_list=USD_MXN&menu_rows=7&date_fmt=us&exch=MXP_USD
Using a Cambio should be your last choice, banks usually give a much better rate. ATM machines are probably the best choice for a visitor. Most banks do charge an international foreign exchange/currency conversion fee. Until this month, my non profit Credit union, Alaska USA FCU, did not list that fee separately. I would simply see an ATM transaction on my online statement. The amount shown for my ATM transactions always seemed to be about 1 % higher than the should have been, until I figured out why. They now list it as a separate charge above the amount of Pesos, in Dollars withdrawn.
On the Alaska USA FEDERAL CREDIT UNION FEDERAL ELECTRONIC FUND TRANSFER ACT DISCLOSURE information sheet I received this year the following information is shown:
“Foreign Exchange/currency conversion:
If you use your Visa Check Card for purchases or ATM withdrawals in a currency other than US Dollars, the purchase and withdrawal amounts will be converted to US Dollars by Visa International. Inc. under their rules set forth from time to time. Currently, the rules specify that the currency conversion rate is generally either a (1) government mandated rate or (2) wholesale market rate in effect the day before the transaction processing date, increased by one percent (1%). If a credit is subsequently given for a transaction in a currency other than than US Dollars and the credit has a different processing date, then the converted amount may be greater/less than the converted amount of the original transaction. The currency conversion rate on the day before the transaction processing date will be used and may differ from the rate in effect at the time of the original transaction. You agree to accept the converted amount in US Dollars.”
The link I gave above to the Oanda currency converter allows you to choose the rate used, Interbank rate, Interbank rate plus 1% or 2% etc. You can also choose the date to be used, so if you want to check a transaction made last month, you may do so. If you enter an amount in the morning, and the same amount in the afternoon, you will get two different answers, this reflects on the changing exchange rate throughout the day.
Some people in the past have posted on these forums that they were “cheated” by a Mexican bank on the exchange rate they received at an ATM. They just don’t know how foreign exchange works.
Now having posted all this confusing crap about the exchange rate, I will say that during the most serious Peso crisis in Mexico in the decade 1982-1992, I was forced to use Cambios exclusively. All the banks had been nationalized, and the first thing that happened was that all the competent people were fired. It was hopeless trying to use a bank. Because of the runaway inflation in those pre-Internet days, there were no ATMs in Mexico until about 1992. A Cambio is better than nothing, but just barely.
Rex
"The supreme happiness of life is the conviction that we are loved" - Victor Hugo
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