Foreign credit cards purchases at MEP rate

[Ronnie Hotdogs]

Is there any limit on why you can spend?

Wife is nipping my head about a new TV and Fridge.
Will I get MEP rate using foreign card still?

 

[earlyretirement]

Is there any limit on why you can spend?

Wife is nipping my head about a new TV and Fridge.
Will I get MEP rate using foreign card still?

As others mentioned, it's not really the "MEP rate" but the rebated rate you will get whatever that website is showing after commissions. I bought several new items (stove, washing machine, fridge) for my mother in law a few weeks ago and I got the rebate on the entire purchase. I've never been limited using a USA credit card.

I think as far as the government is concerned, the more you spend on your credit card, the better it is for them.

 

[Ronnie Hotdogs]

As others mentioned, it's not really the "MEP rate" but the rebated rate you will get whatever that website is showing after commissions. I bought several new items (stove, washing machine, fridge) for my mother in law a few weeks ago and I got the rebate on the entire purchase. I've never been limited using a USA credit card.

I think as far as the government is concerned, the more you spend on your credit card, the better it is for them.

What a good son-in-law

 

[hdanh00]

As others mentioned, it's not really the "MEP rate" but the rebated rate you will get whatever that website is showing after commissions. I bought several new items (stove, washing machine, fridge) for my mother in law a few weeks ago and I got the rebate on the entire purchase. I've never been limited using a USA credit card.

I think as far as the government is concerned, the more you spend on your credit card, the better it is for them.

Where is the money from this "rebate" coming from?

 

[sts7049]

Is there any limit on why you can spend?

Wife is nipping my head about a new TV and Fridge.
Will I get MEP rate using foreign card still?

i rented a car for a few weeks paying with my foreign card. worked just fine, and quite expensive.

 

[earlyretirement]

Where is the money from this "rebate" coming from?

I maybe mistaken and someone can correct me if I'm wrong (which I may be). But let's use an example of 100,000 pesos being charged to a foreign credit card. Previously before this new rebate policy using today's exchange rates:

MEP: 435 pesos to $1 US
Official: 220 pesos to $1 US

Charge to consumer at the MEP rate would be $229 US dollars for a 100,000 peso purchase.
Charge to consumer at the official rate would have been $454 US dollars for a 100,000 peso purchase.

The consumer was just paying more before as they were only using the official rate. The charge was made abroad and then funds were remitted to Argentina and the merchants were getting reimbursed in pesos (this hasn't changed).

But the scenario now is the consumer is paying less for that same charge as they are getting the better exchange rate. The Argentina Central Bank seems like they are getting remitted funds in US dollars and getting paid in US dollars from Visa/Mastercard/Amex and then reimbursing the merchants the same amount in pesos as they were getting before.

So net to merchant is the same amount of PESOS as they were getting before. Consumer is a big winner as they are paying far less and the Central Bank is winning as they are getting valuable US dollars for their reserves. Visa/Mastercard/AMEX seems to be a net loser and things don't cost as much so the % fee as it relates to total transaction is lower as things are cheaper.

Am I mistaken or is this not how it works? I really consider this ingenious and a big coup for the government to have pulled this off. It's a HUGE win for tourists as no one wants to carry large amounts of cash around or wait in lines at Western Union. It will obviously improve tourism over the long haul.

The government is trying to normalize things for tourists and foreigners at the same time, get things away from all the cuevas as well as get more transactions digitized so they can get a piece of it and especially use this as a way to get valuable US dollars into their coffers. That's my rational way of thinking any way.....

Before this, everyone was either using Western Union or just using the hundreds of cuevas and when it goes to cuevas, the Central Bank doesn't see any of those US dollars. So this way the more people use foreign credit cards, the better it is for them.

 

[Jteee]

I maybe mistaken and someone can correct me if I'm wrong (which I may be). But let's use an example of 100,000 pesos being charged to a foreign credit card. Previously before this new rebate policy using today's exchange rates:

MEP: 435 pesos to $1 US
Official: 220 pesos to $1 US

Charge to consumer at the MEP rate would be $229 US dollars for a 100,000 peso purchase.
Charge to consumer at the official rate would have been $454 US dollars for a 100,000 peso purchase.

The consumer was just paying more before as they were only using the official rate. The charge was made abroad and then funds were remitted to Argentina and the merchants were getting reimbursed in pesos (this hasn't changed).

But the scenario now is the consumer is paying less for that same charge as they are getting the better exchange rate. The Argentina Central Bank seems like they are getting remitted funds in US dollars and getting paid in US dollars from Visa/Mastercard/Amex and then reimbursing the merchants the same amount in pesos as they were getting before.

So net to merchant is the same amount of PESOS as they were getting before. Consumer is a big winner as they are paying far less and the Central Bank is winning as they are getting valuable US dollars for their reserves. Visa/Mastercard/AMEX seems to be a net loser and things don't cost as much so the % fee as it relates to total transaction is lower as things are cheaper.

Am I mistaken or is this not how it works? I really consider this ingenious and a big coup for the government to have pulled this off. It's a HUGE win for tourists as no one wants to carry large amounts of cash around or wait in lines at Western Union. It will obviously improve tourism over the long haul.

The government is trying to normalize things for tourists and foreigners at the same time, get things away from all the cuevas as well as get more transactions digitized so they can get a piece of it and especially use this as a way to get valuable US dollars into their coffers. That's my rational way of thinking any way.....

Before this, everyone was either using Western Union or just using the hundreds of cuevas and when it goes to cuevas, the Central Bank doesn't see any of those US dollars. So this way the more people use foreign credit cards, the better it is for them.

Definitely agree it’s a fantastic idea but it astonishes me that the prior situation occurred for so long

 

[RinoG]

So net to merchant is the same amount of PESOS as they were getting before. Consumer is a big winner as they are paying far less and the Central Bank is winning as they are getting valuable US dollars for their reserves. Visa/Mastercard/AMEX seems to be a net loser and things don't cost as much so the % fee as it relates to total transaction is lower as things are cheaper.

So, should we worry that VISA/Mastercard/AMEX will get tired to get the short end of the stick, sooner or later?

I am about to embark in the same kind of shopping spree and I was considering paying with my foreign credit cards.

Pro:
- I don't get tracked locally for my purchase (I would provide my foreign DL for ID/warranty purposes)
- I can make purchases whenever I feel like instead of shopping around, go to a cueva and go back to pay hoping the price hasn't increased. Very first world and will save me time.
best case scenario, i.e. no bank fee on the transaction. Otherwise, 2% less (404).
- Bringing in dollar bills has a cost, which we often don't factor. Not everyone travels abroad often - some people will need to pay a cueva to transfer their balance abroad here - the current cueva fee for this service range from 5 to 8% (depending on the cueva, the source of the funds, i.e. bank, crypto, paypal, etc.).
- Cueva rates are also subject to an assessment of your USD bills - like collectionists, they will inspect each bill for any crease in the paper, ink mark, stain, bend. It is becoming ridiculous, really.
- Safety

Cons:
- The VISA rate, even with rebates, is still 10% lower than my shitty cueva rate (today they paid 455 the dollar, when on ambito it was 463. Upon my disappointed face, I got a laconic "el mayorista se está cuidando" - meh!). I would have gotten 411 from VISA, and this would have been in the


I am still debating.

 

[argentinaorbust]

Cons:
- The VISA rate, even with rebates, is still 10% lower than my shitty cueva rate (today they paid 455 the dollar, when on ambito it was 463. Upon my disappointed face, I got a laconic "el mayorista se está cuidando" - meh!). I would have gotten 411 from VISA, and this would have been in the


I am still debating.

Get a Sapphire Reserve, you get 5x rewards points on travel purchases & 0% commissions (which most purchases in Argentina qualify as). The annual fee of 450 us pays for itself fairly quickly with all the travel perks.

That means with current visa rate, after you pay it off the real rate is 433.59 (412.94+5%). 433.59 is still 4.7% less than the 455 a cueva would pay, but to change money at a cueva, unless you live there, you also need to pay transport (taxi, gas, etc) & unless you go there everyday you're going to loose significant buying power by holding pesos. So 455 isn't the real rate & you save big $$$ only changing what you spend.

If you're buying something that costs 1000's of dollars cash is still probably the way to go, for day to day purchases & a good travel credit card dolar visa is superior. Personally, I don't like dealing with cuevas, even the legit ones & I don't miss going there. In certain regions though a lot of gas stations are only taking cash & stopped taking cards so I do carry cash for that & most smaller property owners want cash for rent, everything else though is dolar visa & it makes life much easier.

 

[TonyTigre]

It's a win-win-win for the government, tourists, and even the credit card companies. Remember that credit card volumes went up significantly and will continue to go up as news spreads and people get comfortable with it. Also, people don't get the true MEP rate since they take a cut as part of the currency exchange, in addition to the fees they charge the vendors.