UPDATE: Xoom’s rates vary daily. This post was updated with their rate of $5.0166 on 4/11/12, but since then the rate has gone much higher and the difference between the official rate and the unofficial rate has gone as high as 80%! You can save even more money than what I listed in this post. Some recent rates: $7.3795 (1/31/13), $8.30 (4/24/13). Using your ATM card or credit card in Argentina is like throwing away money.
Most of the U.S. expats in Buenos Aires have Charles Schwab bank accounts. This has consistently proven to be the best way to get money from U.S. accounts while in Argentina. Schwab gives you the standard day’s exchange rate for all withdrawals, charges no international fees and also refunds all ATM service charges (about $17 pesos per withdrawal). I routinely get over U$S 100 per month refunded to me. With all these great benefits, this next statement might sound weird…
I’m going to stop using my Schwab ATM card from now on.
Xoom is an international money transfer service (like Western Union, but with much lower fees). You can send up to U$S 2,000 per transaction and up to U$S 6000 in a 30 day period. Here’s how it works:
- Go to their website, create an account and choose the amount you want to send
- Pay via direct debit from your bank account or choose to pay with debit/credit card (higher fees)
- Pickup the money from a More Money Transfers location or have it deposited into any Argentine bank account. If you choose to pick up the money, it will be ready within 15 minutes at most locations. Deposits to bank accounts take a couple of business days.
So, why is this better than Schwab? Because even with the Xoom fees taken into account, their exchange rate is so good that you’ll actually be getting more pesos on every transaction. For example, Schwab’s rate is $4.381 pesos per dollar. Xoom’s rate is $4.9193 $5.0166. Here’s a quick breakdown of how that works out with a direct bank withdrawal:
Amount (USD) Schwab Rate Pesos Received Xoom Rate Xoom Fee (USD) Effective Rate Pesos Received Difference (Pesos) Difference (USD) % Saved
$25 $4.381 $109.53 $5.0166 $2.99 $3.9948 $110.42 $0.89 $0.20 0.81%
$100 $4.381 $438.10 $5.0166 $3.75 $4.6540 $482.85 $44.75 $10.21 10.21%
$500 $4.381 $2,190.50 $5.0166 $15.75 $4.7102 $2,429.29 $238.79 $54.51 10.90%
$1000 $4.381 $4,381.00 $5.0166 $30.00 $4.7244 $4,886.10 $485.10 $110.73 11.07%
$2000 $4.381 $8,762.00 $5.0166 $30.00 $4.8683 $9,882.70 $1,120.70 $255.81 12.79%
$2999 $4.381 $13,138.62 $5.0166 $30.00 $4.9172 $14,894.29 $1,755.67 $400.75 13.36%
How much you save depends on how much you typically withdraw in a month, but you can see that at U$S 2000 or more, you’re saving over 10% 12%. For an extra couple of hundred dollars a month, I’ll gladly have them send the money to my Argentine bank account and withdraw pesos from there.
You can also choose to use your credit card to transfer money, but this has slightly higher fees and your bank will probably charge a cash advance fee as well as interest. Still, this may be an option for earning miles or meeting minimum spend requirements for airline mile bonuses (more on this in another post). You’ll still most likely be getting a similar rate to Schwab, so this may help in a crunch.
Want to give it a try? If you use any of my links to sign up, we’ll both get a $15 gift card from Xoom. This is pretty much free money too, because all you have to do is transfer $15 in order to get the gift card. So, if you only send $15, you’ll have $15 transferred plus an extra $15 on your bonus gift card for $0.29 more than a Schwab withdrawal would have cost you. Give it a try – there’s nothing to lose!
- The Xoom website lists that you can pick up the money in pesos or dollars, but that is not correct. You can only get pesos.
- I have transferred money to my bank account successfully and picked up money at More Money Transfers’ location.
- There is only one location in Capital Federal (Buenos Aires central). It’s at Libertad 1057 between Santa Fe and Marcelo T. de Alvear.
- If you have an ATM card that charges fees, you can save even more money!
- This works because Xoom is offering an incredibly high rate. Their rate is very close to the official ‘dolar blue‘ rate.
- Xoom only works with US bank accounts or credit cards. Unfortunately I do not know of another option for non-US accounts. Your best bet is to bring USD and exchange for the blue market rate.
Let me know if you were able to take advantage of this!
UPDATE: The maximum amount you may send per transaction has been lowered from $2,999 to $2,000.