Mexican Credit Cards

It's only over the last few years that credit cards in Mexico have spread to the mass market. The banks are operating in an environment where they have very little information on how credit-worthy a customer is. So while they learn what works, and what doesn't, they're suffering with high levels of bad debts. To try to cover this, they're charging high interest rates and also high annual fees.

Credit Card Offer

A while after I opened a peso bank account at Bancomer, I received a phone call from them (in English) telling me my credit card was waiting at the branch for me to pick up. Since I hadn't asked for one, I asked them what the credit limit was (a few thousand pesos, not that useful) and whether there was an annual fee.

They didn't know about the annual fee. Clearly they didn't get asked it often! After they consulted a supervisor they told me it was about 250 pesos ($20) per year. I politely declined the card, we didn't even get as far as the interest rate. From the bank's point of view that's a low risk starter card (get the up front fee, keep the credit limit really low) but for anybody who has any card elsewhere it's of no interest.

Another Credit Card Offer

More recently, Bancomer emailed me another offer, in Spanish. This one told me I was pre-approved for a card, and it stated a much higher credit limit, and even gave the interest rate. At an APR of "only" 41.7% it's not a bad deal by Mexican credit card standards. But even on a written pre-approved (personalised) offer there's still no mention of any annual fee.

So I went into the bank to check. It turns out the card has a form of cash-back (effectively 1% of spendings) so "the fee would be covered by that". After some further discussion, it turns out there is still an annual fee, but it's now an incredible 700 pesos ($58). That's more than most Mexicans earn in a week (although workers at that level are not the target market!). I declined it again ...

Check the Terms

Clearly, you can't expect credit cards in Mexico to be like the cards you may have in other countries. Fees are unstated, interest rates are very high, and credit limits can be low. There are few if any cards in Mexico with no annual fee. So in general don't accept any Mexican credit card offer unless you've checked the terms very carefully, and have a special reason to need it.

A special reason could be if you're unable to get a card in your home country. As there is essentially no credit checking in Mexico, opening a peso account and putting money into from time to time should get you a credit card eventually. Giving you a fresh start, at a price.

Debit Cards

Because of the credit card annual fees and extreme interest rates, you're better off using a debit card if you need a form of plastic locally (although using just cash is even better). Bancomer for example supply a peso VISA debit card with the peso account, and a dollar VISA card with the dollar account. Both can be used worldwide (in theory - they don't have any chips on yet). Depending on the type of account you have there should be no fee, or it can maybe be waived at the Bancomer Preferred Customer Unit.