Fun with credit!

YES, I’M HAVING a grand time with my new Mexican credit card. Why, just this morning I renewed my account* with the Mexican credit bureau using that very card. Did you know Mexico has a credit bureau?

Alas, you can have squeaky clean credit in the United States, and it will do squat for you here in Mexico where you have to start all over again establishing credit. One would think that in today’s interconnected world, especially in the area of finance, that your credit history would follow you around, good or bad.

But it does not follow you to Mexico.

With my briefly held credit card via Banamex and a second via Banamex USA, also briefly held (I unwisely canceled both before FATCA stormed onto the scene), I established a bit of good credit here. Strangely, my report on the Mexican credit bureau is good but not spectacular. I am accustomed to spectacular.

sidewaysSince I never paid late on the two previous Mexican cards, my less-than-spectacular rating puzzles me, but I imagine it’s due to the relatively short time and scant usage involved.

Moving on to other financial issues, did you know that Mexico insures bank deposits much like the United States does with the Federal Deposit Insurance Corp.? Down here we have the Institute for the Protection of Bank Savings, but it’s not just for savings accounts. It covers most things.

The amount varies, but nowadays it’s somewhere in the neighborhood of $150,000 U.S. bucks. If you have more than that in one bank, I suppose it would be wiser to put part in another bank. Many Gringos living down here incorrectly think Mexico does not insure bank deposits.

I have more faith in Mexico’s financial future than I have in America’s.

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* To have easy access to your credit report, you need an account which costs about 18 bucks a year.

9 thoughts on “Fun with credit!”

  1. I figure that the reason there is no connection to your former spectacular credit rating is they think you must be running from something. That plus Mexico doesn’t want to be known for riding the coattails of Hew Hess Hay.

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  2. My sense is that credit in general is both harder to get SOB and more expensive.

    At work, we once met with the management of Elektra, or another one of those “sell-on-credit” store chains in Mexico. Not only do they charge an arm and a leg in interest (sometimes close to a 100% APR), but they they employ literally an army of collectors to make sure they get repaid. I realize that’s the bottom of the credit ladder in Mexico, but it seems like a very expensive introduction to the concept.

    As you know, here the Republicans are trying to repeal FATCA; let’s hope they succeed.

    Saludos,

    Kim G
    Boston, MA
    Where credit cards are a mixed blessing.

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    1. Kim: Yes, there seems to be far less legal control on credit cards down here. Interest can go through the roof. I always pay credit cards in full every month, and will continue that with my new credit card which has an annual fee of 600 pesos, about 38 bucks these days, which ain’t too bad. Places like Electra take those customers who choose to pay on time to the proverbial cleaners, but that is common in Mexico.

      Something I find amusing is that my deceased brother-in-law, the Eggman, never paid a debt in his life that he could dodge, a complete deadbeat. Yet he had a wallet full of credit cards, no problem getting one. I think the companies involved are still phoning his widow over his debts. Luckily, it appears, she is not liable. But that’s the phone number they have.

      If FATCA is reversed, it will be too late for me, I think. The damage has been done.

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    2. PS: Actually, I’m not sure that damage was done, in retrospect. FATCA caused me a good bit of grief last July and August, but it also pushed me further from the U.S. and closer to Mexico. I still have financial ties above the border, but they are fewer, and my financial connections to Mexico are greater. I prefer living here to the fullest extent possible. Unlike so many Gringos who “live” in Mexico but actually are just permanent vacationers who flee north at every opportunity to buy stuff and other activities, I’m here for real, and I like it.

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      1. How do you receive your pension now? Hopefully you aren’t reduced to depositing a US check into a Mexican bank and then waiting forever and paying through the nose to have it finally converted to pesos in your account.

        At one point, I had to make a deposit with a Mexican government agency in connection with a legal issue, and when they returned the money, it was in the form of a cheque. My bank couldn’t process it, but Schwab could, but they charged me 10% of the value of the check and it took about three weeks to clear. Struck me as highway robbery at the time.

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        1. Both SS and my Hearst pension are direct deposited to my account at HSBC-Mexico. Works well. As for depositing a U.S. check into a Mexican bank, that is now impossible, also thanks to the U.S. government. You can neither cash a U.S. check here nor deposit it into a bank account.

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  3. My ideal would be to find a way to completely cuts my ties with The States. Unfortunately, my retirement money comes in monthly installments from government agencies that do not have a cash out option. Years ago, you gave me the idea of the BanamexUSA account. It worked beautifully — until FATCA. I may now follow your lead and have the checks directly deposited in my Banamex account. The trick will be to either watch the maximum deposits — or to surrender to the reporting requirements of FBAR. I will probably keep my American bank credit card. If only for the mileage benefits it buys.

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    1. Señor Cotton: I too would love nothing more than to cut the U.S. totally free from myself, but that ain’t possible, so …

      I also was quite pleased with the Banamex/Banamex-USA situation until FATCA. Some banks reacted to FATCA more strenuously than others. HSBC is a pain too in that regard. Bancomer far less. I’m working on getting my SS sent to Bancomer instead of HSBC and then my Hearst money too. After doing that, I’ll let HSBC just dangle out there as my bank option No. 2.

      Interestingly, FATCA also killed my U.S. PayPal account. I had two PayPal accounts, a U.S. one and a Mexican one. You can only link U.S. banks and cards to a U.S. PayPal, and the same goes with a Mexican PayPal and Mexican financial institutions. After FATCA, my U.S. PayPal started hounding me for all manner of information. I just canceled the dang thing. My Mexican PayPal leaves me in peace, and it handles international transactions beautifully and works with either pesos or dollars.

      PayPal is the best thing since sliced white bread.

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