A common mistake that occurs when foreigners use their ATM or credit cards in Mexico is when the charge is in your home currency as opposed to the Mexican peso. I’m going to try to save you from losing money when making purchases with your credit card.

If need pesos, use a bank ATM. It will give you the best conversion rate. And when the ATM pops up the question asking if you want the pesos converted to dollars for you, you must press “no.” This is an unnecessary upcharge of 6 or 7%. You still get your 5,000 pesos or whatever, but the bank will charge you $30 to $40USD more due to this silly conversion. Otherwise you can trust bank ATM’s, and the only expense should be a “service fee” of 17 to 32 pesos.

Credit card overcharge fees is a little more difficult to catch, as you have less control when the sales person is holding the handheld credit card terminal and swiping your card for you.

I know for a fact that we’ve been charged in dollars and not realized it until it was too late, and I’m sure that we’ve been charged in dollars and never realized it.

A few weeks ago we bought a replacement air conditioner remote control. It was 500 pesos. I didn’t realize it until more than a week later when I looked at the receipt and saw we were charged $29.20USD instead of 500 pesos, which was about $3USD more than Chase Bank would’ve charged if they did the conversion instead of Banorte.

So, that’s like $3, not a huge deal. But if my bank gets a charge for 500 pesos they are going to send the Mexican Bank 500 pesos, and then charge me at the conversion, which in this case was about $26.50. The Mexican bank will keep 25 pesos as a convenience fee the store is required to pay, and the bank will send the remaining 475 pesos to the store where I bought the remote. However, with this remote the store still received their 475 pesos, but the Mexican bank didn’t make 25 pesos, they made 75 pesos. There is no benefit to me to pay in dollars. The Mexican bank can’t accept dollars, so it’s just a little trick to make the consumer think that it is better to pay in their home country’s currency.

This comes straight from the American Express website: “Say you’re paying $1,000 for a four-night hotel stay and you decide to pay in your home currency. You could easily wind up forking over $60 in unnecessary fees (about 6%). Add that to airline, rental car, restaurant, and shopping expenses over the course of a trip, and you could unknowingly spend hundreds or even thousands of additional dollars without even realizing it.”

A few months ago we bought a couch. We were charged in dollars and not pesos, an additional $40USD, and it was a huge pain in the ass that took several hours and trips to the store over two days to sort out.

Then last week we bought an air conditioner. I told the sales person before she charged us to please make sure that they charge us in pesos, and then the receipt prints out and you can probably guess how we were charged. And now the fun begins. The sales people in the store are giving me every possible excuse. Now I know that the extra money isn’t going to them. The extra pesos are going to their bank. It was 9,860 pesos. They charged me $595US dollars. In the end I paid $522USD, which buys you 9,860 pesos. So the extra $73USD would’ve netted Banorte Bank a nice little bonus of 1,400 pesos. And of course Banorte is already charging the store a fee to use the credit card terminal.

But first I have to convince the store employees that the cost should be in pesos and not dollars, that it’s NOT the conversion my bank did, that it’s NOT because my bank will only allow charges in us dollars, and that the dollar amount being printed on the receipt is NOT just a helpful conversion for the customer, and that I am being charged way more than I should for the air conditioner.
It’s a 14% markup, and $73 is a lot of money on top of the $522 I’ve committed, which doesn’t matter because it’s supposed to be 9,860 pesos, and whatever my bank charges me in euros or dollars or yen has nothing to do with this store or their bank.

So this conversation with the store employees takes 20 or 25 minutes. After the employees tried to cancel the charge and run the charge two more times but couldn’t figure out how to do it, then my credit card got shut down. So calling my credit card company to explain what was going on was another 20 or 25 minutes. And I hadn’t made that call since we bought the couch a few months ago and my credit card company shut my card down.

And then I took the credit card terminal from the store employee and said I would run the charge.

And it is a little confusing. The terminal, realizing my credit card is not a Mexican credit card, brings up a screen that says, in English, “Press the green button for USD and the red button for pesos.”
Well, the green button looks like the “A-OK button” and the red button is a big red “X.”
So the store employee just hit the green button every time to move on to the processing of the credit card.
But if YOU aren’t in front of the screen you can’t see this.
Anyway, fortunately after an hour or so it all worked out, and hopefully if you find yourself buying a couch or an air conditioner in Mexico you will now be a little more aware.

And one more thing, I mentioned before that I know that we’ve been overcharged and not realized it until it was too late.
We also know for a fact that we have gotten a bill and realized that we were undercharged.
So, it is easy to feel like that we’re being taken advantage of as foreigners when something is more than we expect, or more than it should be, but in these overcharge cases the store isn’t benefiting at all. It’s the bank overcharging you.

And when a store undercharges us, they are definitely losing out. So, we don’t want to get overcharged, but we also don’t want anyone to accidentally give us something we didn’t pay for.