A money transfer or sending money overseas is the same thing as wiring money; the terms are used interchangeably. These terms are most commonly used to refer to sending money to friends and relatives outside the U.S.
Who Can Facilitate this Type of Transaction?
Banks and Credit Unions do bank wires or bank transfers and it’s affordable to go through them, but most financial institutions require you to be an account holder. For a cost ranging between $10 -$20 per transaction, the U. S. Postal Service (USPS) offers a wire transfer service called Sure Money or Dinero Seguro. The sender can transfer up to $2,000 per day to Argentina, Colombia, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Peru. Western Union and MoneyGram are the oldest and most established companies doing business in this lane and they offer the most options for transferring funds, but newer and more streamlined versions (phone and digital) are cropping up every day. As is the case with opportunities, good guys AND bad guys seize them.
Convenience Comes at a Cost
Understand that there is a high cost associated with taking out a cash advance on a credit card. You will be billed a cash advance fee and interest, plus the money transfer merchant could charge you a card fee for using a credit card. Some service providers offer to send funds via a prepaid debit card that can be reloaded from the states but this too comes at a high cost.
Sleuth Your Way through It
Just like any other service an educated consumer shops for, you will want to compare apples to apples. The cost of a money transfer depends on who you select to do the transfer, the destination country, the exchange rate, and the amount you send. Typically, the fee for money transfers increases with the amount you send. When parting with your money (for ANY transaction) it’s always okay to ask questions. In fact, ask away because these are your hard-earned dollars that you are transferring to someone you care about and your intention should be to maximize your money transfer. The answers to these four questions will help you to make the most sound and educated decision.
1.) How much will this transaction cost? Exactly what dollar amount will my family or friend actually receive? In other words, what is your cost for this transaction?
2.) Will the recipient receive the money in U.S. dollars or local money? What is the exchange rate or how much will U.S. dollars be worth in the currency of the recipient’s country?
3.) Will the recipient also have to pay a fee?
4.) How will the recipient receive the money?
When you learn the answer to these four questions, make sure you have it in writing AND always keep your receipt just in case everything does not go exactly as it was represented to you.
What If Something Goes Wrong?
Of course it’s your expectation that everything will go as planned, but to set your mind at ease, don’t waste any time. Contact your family or friend to find out if they received the money and exactly how much they received. If an error has been made, immediately report it to the money wiring business. Hopefully they will be able to sort it out and correct the mistake. If not, report it to the Federal Trade Commission by calling 1-877-382-4357 or go to www.ftc.gov/complaint. You can also submit a complaint to the Consumer Financial Protection Bureau (CFPB) or by phone (855-411-2372) in more than 180 languages.
It stands to reason you want the recipient to receive their money as quickly as possible, but remember: haste makes waste. Know that exchange rates change daily and waiting an extra day or so can mean the difference of extra money actually ending up in the recipients’ hands. Take the time to do your research; at the very least, ask the service provider these four questions. Ask around too. You can learn from friends and family and coworkers, but be aware they may not fully understand the true cost of doing business. The key is to maximize your transaction. You want the recipient to receive the most money possible.