156 replies to this topic

[bmendoza]

Okay, I'm a little confused. So is it better to trade my money for pesos, or pay bills and shop with dollars? Does it make that big of a difference? I have been trading dollars for pesos because I thought that was better, but I'm still getting used to living here and learning everything.

[George Costanza]

Its better paying in pesos. Continue to trade your dollars for pesos.

[Scooby]

Sometimes it MIGHT be better paying dollars or pesos depending on what the exchange rate is at Cablemas, Calimax, Soriana, etc. There shouldn't be that much difference to get excited about if you're doing only small purchases or payments. It's quite a different story though when you want to change tens or hundreds of thousands of pesos to dollars. Those few point differences in exchange rates between the various banks and cambio casas (either side of the border) will add up to lots of $$$ lost or saved.

[bmendoza]

Cool... thanks for all the help.

[TJ Owl]

It is BETTER to carry BOTH. If you got pesos in San Ysidro on Saturday at 14.56 and you go to Soriana, which takes dollars at 14.75 pesos, the it is better to pay in dollar because you get more bang for your buck. But if you go to a mom & pop taco shop and they take dollars at 12.50 pesos, That pay in pesos and get an extra 2.25 peso savings for every dollar spent.

Okay, I'm a little confused. So is it better to trade my money for pesos, or pay bills and shop with dollars? Does it make that big of a difference? I have been trading dollars for pesos because I thought that was better, but I'm still getting used to living here and learning everything.

[otayBill]

Pesos has been trading at above 15 pesos per dollar for over week. Today its at 15.262.

Any predictions it will hit 20 per dollar?

[Klort]

The American dollar is already up 40% against the British Pound and 30% against the Euro.

And it will keep going up as long as the economic turmoil takes place.

[Scooby]

Anyone know if one side of the border is better than the other for changing pesos back to dollars ?
An early December survey I did showed that the lowest TJ cambio I found was 5/100th lower than the lowest I found in SY.
That amounted to around $6 usd saved or lost when changing 1k at around 13.5 at the time or $60 per $10k.
That might not be much for some, but a whole lot for others.
What about 100k ? Oh hey, here's $600 for your services and the smile. Thank you very much.

[richsinc]

Its better paying in pesos. Continue to trade your dollars for pesos.

I can not believe you said that, George. You are the one that told me years ago to use both currencies for the best exchange rates.

But my main point of this post is why the lack of information/news out of Mexico City??? LastI heard of the MX Fed reserve chairman or whatever was that his plane crashed six months ago. Then Thursday, on Fox 6 I heard a 20 second blurb about MX lowering int's prime interbank rate from ~6.25 to ~5.75%.
(Thus the stronger MXP?)

Why is Mexico City so secretive? The MX people do not have a right to know what thier elected officials are doing??? Secrecy breeds corruption, IMHO. I really do not understand it.

It might just be me as I do not read Spanish papers or watch MX News shows. Can others tell me different? And where to read/hear more.

[George Costanza]

Rich the way the peso is changing daily the places you use dollars does not adjust right away. Ask what the exchange rate is first then if its not to your liking adjust and use pesos

[richsinc]

Rich the way the peso is changing daily the places you use dollars does not adjust right away. Ask what the exchange rate is first then if its not to your liking adjust and use pesos

Now tell me something I do not know....
No shit, Sherlock; there is always a difference between bank/trade rates and retailers in their favour. Ley is usually just ~.10 to ~.50 lower; not bad.

So what about like no news from Mexico City???

[xolotl]

You know, once upon a time Tijuana did not have any pesos in circulation? So much depended on the United States that everything was transacted in dollars. Even today all the natural gas that we consume comes from north of the border.

The best exchange rates I've found (both for dollars and for pesos) are on San Ysidro Boulevard around the 99-Cent Store. The guys hanging around that part of the street work for many of the money-changers and will quote you a better rate than is posted on the signs.

There are other places in San Ysidro that quote great exchange rates but then get you with "commissions" that render their exchange rate among the worst possible. Banks in Tijuana will also publicize great exchange rates but those will apply only to money deposited into their accounts.

I would also agree that it is best to carry both currencies in Tijuana in order to pay in pesos at the smaller shops and in dollars at the supermarkets and gasoline stations. Smaller shops do not consider themselves to be ForEx speculators while the bigger establishments, which buy their merchandise from the U.S., are necessarily in the ForEx business.

Some but not all gringo banks own stock in many of the Mexican banks. This is because Carlos Salinas de Gortari denationalized banking when he was president, allowing his best friends to buy into the country's banking system. In the process, Bank of America bought into Banamex, CitiBank bought into Santander, and Wells Fargo bought into ... uhm, I forget. But Union Bank? Torrey Pines Bank? San Diego County Credit Union? Forget about it. The big banks bought in because they wanted a share in the remittance industry -- billions of dollars have been flowing into Latin America from the "guest-workers" in the U.S. The little banks didn't have enough capital to buy in. Those of us who live on both sides of the border are therefore better served by one of the larger banks that also exist on both sides of the border -- better exchange rates and better liquidity.

The credit-card clearance companies have recently been sued in a class action for overcharging their foreign-exchange rates. They have typically been taking three percent off the top when you use a credit card in Mexico. They are expected to make restitution to us (www.ccfsettlement.com) but they continue to take three percent off the top even today by giving their charge a different name.

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[AcapulcoGringo]

If your US debit card does not charge a % to draw money out in Mexico... you BY far, get a better exchange rate drawing out of mexican ATM. My bank charges me $5.00 USD to draw out in Mexico, plus the ATM fee, which is usually 7.5 pesos.. Even after those amounts, I still get more money than withdrawing in the US , then going to any casa de cambio, in US or Mexico.... I , when in TJ hate to have dollars, because you never get a good deal using them... except most rents seem to be in Dollars so you have to us dollars there...

But anyway , hands down drawing out of the Mexican ATM has Always been, Hands down the best rate for me!

And if your US bank is affiliated with a Mex bank you usually dont even get charged a fee.. depending on your bank... But I think BofA customers can draw from Santander and Banamex.. BUT Im not sure...

[Scooby]

Yes, that's a good point and I've wondered about this before. Another words, after taking into account all fees and charges by the banks,
we would come out ahead with more pesos using the MX bank's ATMs.

Not to mention, one's time has to be worth something for all the running around involved in doing things the other way.

[AcapulcoGringo]

Yes it does for me, BUT it really only is good if you draw out larger sums. $300 or more... But frequent smaller withdraws dont end up being as good.

[Rosarito Gary]

B of A is not affilitated in Banamex. It is Santander and Scotia banks only. Never get charged fees using those 2 banks with my debit card. Always get latest rate also. Been very happy so far with them.

[xolotl]

B of A is not affilitated in Banamex.

Yes, that is true nowadays. B of A bought the legal maximum (24.9%) of Santander in 2003, thus establishing a new and better arrangement. But I was talking about CSG's sexenio. Banking relationships have been no less stable in Mexico than they have been in the U.S.

after taking into account all fees and charges by the banks, we would come out ahead with more pesos using the MX bank's ATMs.

Depends on the fees that are being charged. We get a better rate of exchange from the banks' ATMs than we do from the casas de cambio but most modern casas de cambio don't charge commissions or fees. You have to be an accountant to figure out what the really best outcome might be.
As a general rule, affiliated banks (for example, BofA and Santander) don't charge the ATM fee but they will still charge somewhere between one and three percent of your withdrawal under the rubric of "foreign transaction".

Not to mention, one's time has to be worth something for all the running around involved in doing things the other way.

Yes, that really is the trenchant issue. "Eight pesos right now or otherwise hoof it over to Gringolandia? Like, duuude, no question!" How many times have I agreed with Scooby!

So much of what we believe is no longer true. The casas de cambio are a case on point. Before Carlos Salinas de Gortari, the Mexican peso was centrally managed, which is to say that the president determined its exchange rate per fiat. (Which is why each incoming president would devalue the peso, as a way of making up for what his predecessor took with him.) If you've been to Brazil or Venezuela, you'll have experienced a centrally managed currency -- the government thinks their currency is worth far more than the rest of the world does. Before CSG, casas de cambio flourished all along Mexico's northern border simply because of the great discrepancy between the official exchange rate and the valuta of the peso. The casas de cambio were a seriously good deal, just like they are currently in Venezuela and Brazil. Nowadays, though, the ones in Tijuana are just a money-laundering scheme trading on the ForEx spot market.

So here's the gravamen of the ccfsettlement.com lawsuit: it's not the ATM fee, rather the ForEx commissions. By what warrant can credit-card clearinghouses charge three percent simply for translating from one currency to another?

Those class-action attorneys contacted me a couple of years ago and my reaction was as bewildered as Scooby's. Somebody thinks I should be reimbursed for having spent money in Baja? WTF?! According to them, though, it looks like I was overcharged in my personal expenses to the tune of a couple hundred dollars just from having used my credit cards in Mexico instead of spending cash. Go figure.

To makes things even more confusing, it might be that some gringo banks charge less for their ForEx than others do. I have not confirmed this. But a representative of Washington Mutual (now Chase) told me five months ago that their clearinghouse used to charge one percent for credit-card transactions and three percent of debit-card transactions but now are charging the reverse; and two months ago representatives of B of A and Citibank both told me the charges are uniformly three percent. The guy at WaMu was very apologetic, said the policy was not the bank's but the clearinghouse's, which would mean that one or more of these bank reps got their story wrong.

Does any of this really matter? Seems to me we're being cantinfleado into submission here. The issue has to do with nickels and dimes and appears to have been designed to exhaust the ordinary thought-process.

So why not run some numbers. Let's say you want to withdraw a hundred bucks from your B of A account. That's going to cost you US$103 at your nearest Santander ATM or something like US$103.64 at some other ATM. For that you might get Mx$1,377. Otherwise, you hoof it across the border, withdraw US$104 from your own bank, hunt up the best deal you can get in San Ysidro, and come away with, hmm, maybe Mx$1,380.

It seems to me that the clearinghouse ForEx commission ought to be suppressed on the merits. If that happens, though, the casas de cambio will cease to be. And there are very powerful people on both sides of the border who rely on the casas de cambio to launder their money.

Meanwhile, we seem to be doing okay.

By the way, if you really want your head to hurt, Banorte now dispenses your withdrawal in U.S. dollars. That's how I derived the earlier figures. I took my WaMu card to the neighborhood Banorte ATM, asked for a hundred dollars, got that request translated into Mx$1,377, and then translated back into US$100. Plus the ATM fee of Mx$7.25 and the federal excise tax of Mx$1.08.

Mexico was so much easier to understand before privatization.

X