Monday, May 17, 2010

cruising the financial highway

This is not your daddy's Mexico.

Good opening line.  It certainly caught my Mexico-roving eye.

In 2007 I had started my research into the possibility of retiring in Mexico.  At that point, I was the equivalent of a virtual window shopper.  Just looking, thank you.

There were plenty of web sites.  Some helpful.  Some filled with questionable advice.  Some with both.

Somewhere along the line, I discovered blogs.  Blogs have become such a central point of my life, it is hard to remember a time when I was oblivious to them. 

One of the first blogs I encountered was written by Felipe Zapata -- the blogger with more names than Prince or Elizabeth Taylor.  Back then, he used his NOB name.

He told great tales of Mexico -- and still does.  Some good things.  Some bad.  Always with a jeweler's eye for both the sublime and the ridiculous.  And consistently a fun read.

The quotation at the top of this post came from his "How to move to Mexico" -- a piece he originally wrote to be a newspaper article.

In that article, I found answers to questions on crime, medical care, credit cards, mail service, internet access, tax returns, speaking Spanish, cost of living, housing, areas to live, visas, cars, furniture.  And additional web resources.

In eight pages, I learned more accurate information than I had found in several retire-to-Mexico books.

The one piece of advice I did not follow was his advice about money. 

He suggested opening an Amistad checking account at Citibank (Banamex USA) in Los Angeles, and then opening a parallel account with Banamex after arriving in Mexico.  Deposits from investment or retirement accounts could then be made to the Citibank account and easily transferred to the Banamex account.

I didn't do that -- to my cost.

Instead, I opened an account at a nation-wide bank in the United States and relied on the debit card the bank provided for all of my cash in Mexico.  One card.  One life line.

A little reminder here might help.  My part of Mexico is a cash only economy.  Credit cards and checks simply are not accepted.  You pay with pesos - or you go home empty-handed.  It is as simple as that.

Everything would have worked out fine with my American bank and its debit card.  But for one bothersome fact.  I have a tendency to lose things.  Including my debit card.

In one year, I lost it twice.  Both times leaving me stranded without any personal cash source.

The first time I was extremely fortunate.  My friends Roy and Nancy were visiting from The States when I lost my wallet.  They lent me enough to get me through the four weeks it took to receive a replacement debit card.  (My bank would not mail it to my address in Mexico.  Security.  You know.)

The second time the calendar helped me.  I lost the card a month before I headed to Oregon.  Fortunately, I had enough cash on hand to last through the month.

If I had followed Felipe's advice, I could have walked into my local Banamex office to receive a replacement card -- or withdraw pesos from my account.

I have learned my lesson.  The application for a Citibank account is under way.

Last week I talked with a bank representative.  He took all of my personal information and told me that my application should be in the mail to me this week.

All went well -- with one exception.  He said the bank requires a copy of a utility bill in my name to prove I have an address in Mexico.  (More Homeland security, I suppose.)  None of the utilities for my house are in my name.  My land lady pays them all.

As an alternative, I will submit copies of my constancia de domicilio -- issued by the local council in Villa Obregon, stating that I reside at a specific address -- and the address page from my FM3 booklet.  They are all I have to prove I have a Mexico address.

I will keep you posted on how this turns out. 

As bureaucratic as the process seems, it is far easier than the financial transactions I had to go through in the early 1970s.

Felipe is absolutely correct.  This is not my daddy's Mexico.


Leah Flinn said...

Steve, I can vouch that it is much cheaper to bank as Felipe suggested. When we moved here, I set myself up with a US account that will transfer funds to the MX account very cheaply. There is no charge for withdraw here, and since it is a cash only society where I am as well, the only downside is you usually have to safeguard more cash than you would if you were to use your card more often.

Steve Cotton said...

Leah -- After a year in Melaque, it was very odd to return to Oregon where the credit card is king. Cash seems to merely annoy some merchants.

Calypso said...

I recommend Bank of America. I do not recommend opening an account in Mexico - too many people I know have had money disappear.

B of A does not charge for the ATM card use and they have a free 3000 a month transfer policy as well. Of course all this is subject to change at a moments notice.

You need a minimum of two sources (cards from different banks for those times like you having lost your card twice. Also you can bring down 10K cash - good idea to have some of that as well - like the Space Shuttle - backup or contingency methods are mandatory to keep flying.

Anonymous said...

So, with Bank of America you can use any ATM in Mexico with no fee? How would one transfer funds to Mexico via B of A?


Paty said...

I have BofA and I use Scotia bank to withdraw with no fee. I also have a Santander acct which is supposed to be linked to my BofA acct., but "essss Mexico" and you know how that goes . . .

Steve Cotton said...

Calypso -- Other than the 1994 devaluation of the peso, I have not heard of depositors losing money in Mexican banks. It makes sense to me not to keep your full investment package south of the border. Though, due to the fiscal illness in The States, I am not certin Mexico is any more risky.

But I strongly agree with your advice on two cards. I am keeping my current ATM crd -- and opening a second account with another bank.

Miguel -- My question, as well.

Paty -- At best, we reduce possibilities.

Babs said...

Steve - A Canadian friend of mine used an ATM which was compromised last January by Columbians! Many, many people had bank accounts emptied. With a US account they redeposit that money in your account....not so in Mexico. My friend has yet to get one peso back here.....and IT WAS her primary account.....
I keep everything in the states except for a Mexican account that allows me to cash US checks in case of emergency - which I've never done.
I DO have a Bank of America acct as well as another and ATM cards for both......the simplest and safest way.

Steve Cotton said...

Babs -- People the world over tend to get careless with their ATM cards. The weakest link in any bank security is the customer. I feel sorry for your Canadian friend. But, as for American banks setting accounts straight, I have my own anecdote. Several months ago, an American friend used an ATM in Melaque. The transaction showed up on the machine, but no cash was dispensed. He called his bank in The States. The bank faxed a form to him. He sent it back. He is still waiting for his money.

We could anecdote our way through the banking system, but the fact is that the Mexican banking system is as secure as the American banking system. As long as I maintain some contacts witin The States, my primary banking will be in Los Angeles with a small transfer amount in my Mexican account. That is, if I ever get one.

Brenda said...

Why can't you get several debit/ATM cards for the same account? Why do you have to open another account?
We had a pile of cards for our account that we got before we left Canada and luckily are still using the first ones; but if we need them the backups are here.

Steve Cotton said...

Brenda -- I tried getting extra cards when I opened my account in The States. The bank would give me only one card. When I explained I was worried about wearing one out, the account representative said I could order another when the first one wears out. The fact that it would take three weeks to get to me in Mexico did not bother her in the least. Her response: "Rules are rules."

Brenda said...

I see, well I think that is nuts; but I guess they have their "rules" lol. Banks love "rules".

Anonymous said...

Seriously, if you were running a U.S. bank would you send an ATM card to Mexico?

I think all those bank executives have seen too many Al Qaeda beheading videos to believe what they might hear over the phone.

They have no idea whether some narco terrorist has a gun to your head or not.


Kim G
Boston, MA
Where, fortunately, we've never lost an ATM card. Hope the first time isn't in Mexico.

Abby Lee Macias said...

I have never had an issue with the Mexican banks but I use bank of america also. Gil has 2 Mexican accounts and in fact one time he though someone robbed his account and stole money and they were going to file an official form to get the money back but that robber turned out to be his wife me! HA LOL if he would have only asked me where I used the card, I would have told him! I have 2 ATM cards from my bank of american account you could send away for 5 if you needed them, good thing to do while living in Mexico! I think in the US there is more security on the money, however who knows things are changing so fast!! Also we want to buy land and I asked on how to transfer the money and Santander said you bring in the paperwork from BOFA and your FM3 and then we transfer it and then you can go buy a home/land with it. But yes I am sure a Mexican account can be cleaned out, which is why everyone uses cash! When we buy land I think we will buy in cash, by taking out money everyday from my account and paying in cash, easy enough...

Steve Cotton said...

Brenda -- And the rules simply seem silly at times.

Kim -- I understand the problems of mailing a card to Mexico, but the USPS has its own problems. I ordered a duplicate credit card. Never showed up. I asked about it. Bank cancels the good card I have, throwing all of my automatic payments into chaos. This time, they didn't even give me the opportunity to lose it.

Abby Lee -- Nice to hear from you. I suspect most Mexican banks are every bit as safe as an American bank. The only difference is that Mexico is still a cash society. I suspect that will change