Learning Uruguay

Every day brings ????

Bills, banks and credit cards

Posted by urufish on May 4, 2007

ABM

It’s just past the first of the month and it’s a good time to write about paying bills.  We’ve been here for over a year and we thought we had this down pat, but this is Uruguay… Nothing is ever ‘down pat’.  Someone said this place was boring..   Certainly true about crime and the ugly side of life.. but on a day to day basis, there are always challenges.. like paying bills… 

When you buy property, you become a bill payer.  When we bought our first house in Piriapolis, we had electricity, telephone, water and taxes to pay for.  The real estate agent offered to pay our bills on a monthly basis for a small fee.  Real estate agents here do this kind of work for many people.  It’s part of their business.  We did that for a few years and then my wife’s family offered to look after this and we switched to them.  They live in Maldonado, not too far from the house, so they would drive over a couple of times a month, cut the grass, clean the place up (off season of course), pick up the mail and pay the bills.  Major items, like taxes, were looked after by another family friend and attorney. 

When we moved here and purchased more properties, we took over the process ourselves.  Living here also meant more services… which now include… electricity, telephone, gas, school taxes, property taxes, various and sundry other taxes on the properties including patrimony tax (I call it a wealth tax), internet, cell phone, cable/satellite, alarm monitoring, car insurance, car license, health insurance for people, health insurance for pets, funeral insurance (if you plan to die here.. cheaper than flying the body back–oops–black humour), gastos comunes (if you live in an apartment), water (if you dont live in an apartment), and sanitation tax (you pay on the way in and the way out if you have a house).   

These services vary depending on whether you rent or own, you’re in a house or an apartment, you’re urban or rural and lastly, on your lifestyle.   However, which you look at it, they have to be paid.  How do you do that? 

Dont know about the rest of the world, but several years ago Canada/US got serious about electronic bill paying.  By the time I left Canada, I was down to 3 cheques a year.  My gardner refused to take VISA….. With everyone else, our deal was take payments electronically through the bank or credit card or we dont do business.  Here, we had to start over again, from scratch. 

The banks in Uruguay never thought much of being a bill paymet receiving service.  Uruguayans, some time ago, got tired of walking to the phone, electrical, gas and water companies to pay their bills in cash.  So private enterprise stepped in.  Companies with locations all over the place, (some franchised), which will accept payment for many kinds of bills and remit payment on your behalf.  The biggest is Abitab.  We chose to use them because their competitors, at the time, weren’t taking payments for one or more bills we had to pay.  I like a one stop shop, so Abitab it was.  Plus, my wife is a ‘gift’ freak, and they give points.  You pay like a million dollars in bills and you get a coaster, but what the wife wants, the wife gets and like I said, it was my choice too. 

2 or 3 times a week, I would take the bills we’d received since the last trip and go to the local Abitab.  My regular store was the one on 21st just north of Roque Graseras.  I got used to them and they got used to me.  For almost a year, we did everything in sign language.  Except for the one time I screwed up a cheque and they tried to explain to me what was wrong.  In frustration, they did it for me.. which I assume wasn’t legal, but what the heck, it worked. 

Abitab, and I assume their competitors, are fascinating to northerners like ourselves.  We have nothing like it in Canada or the US.   Little storefronts dedicated to bill paying, transferring money between people and on the side Western Union and lottery ticket purchases.  I believe most of these are franchieses.  I know I’ve seen a few in the paper for sale, so I assume they’re all (or most) like that.   They are open late, but dont go too late on  Saturday and I dont believe any are open on Sundays.  You take your bills there and they will tape all of them and give you a total price.  You pay them in cash.  They accept cheques for certain bills, like DGI and a few others but DGI is the main one.  If you have a small business (or a big business) you must pay monthly payments for pension, etc. and soon to start, witholding tax on income to DGI.   When we came here, we opened a unipersonal business (equivalent to our sole proprietorship designation), so we pay DGI around $2000 per month for my pension.  Gee.. I hope I live long enough to collect on it 🙂  The other bills, mostly utilities, you pay in cash–efectivo.  From the list above, that inclues phone, cable, electricity, gas, water and all taxes. 

After several months of this, I decided it was time to move to the next level… on line bill payment.  I spoke with friends and most of them use auto-debit.   At home, I hated this.  I always paid bills on line.  That way, I decided on the amount to pay and when to pay it.  As an early adopter of auto-debit, I went through the growing pains and the mistakes and when web-banking came along, I jumped at the chance to control everything myself.  Anyway, we work with ABN-AMRO and they tell me there’s no such thing.  You can only choose one of auto-debit to your bank accounts or auto-debit to your credit card, which is provided to you (in our case) through the bank.   With ABN, not all of our recurring invoices are signed on with the bank.  Those we have put on our credit card.  The good part, is I dont have to trudge on down to the Abitab a dozen times a month.  The bad part is my wife’s not happy because the points we’ve accumulated aren’t enough to get anything decent.  And of course, the ‘learning curve’ with auto-debit was (I’m hoping it’s over) wasn’t so good either. 

When we first moved our invoices to auto-debit, they all got paid on time.  I could check on the web each day and see which ones had gone through.  That’s true for the bank auto-debits.  The credit card is not real-time.  You get to see last month’s statement on line around the 2nd or 3rd of the month and it’s static until a month later.  It’s not like web viewing of credit cards in the north.  Maybe it will change.  Dont know.  Or perhaps my logon is through the bank’s website, which is static for Mastercard.  Perhaps if I could log into Mcard’s site, I could see dynamic.  It hasn’t been such a problem yet that compels me to chase everyone possible to find out if there’s a way around this.  Something for the future to keep us busy. 

Everything ran perfectly for a few months and then we made a mistake.. for which we should have known better.  There’s a rule in Uruguay that says once you’ve set something up, dont change it.  This is the golden rule of the immigration process… NEVER, EVER change anything UNTIL AFTER the process has completed.. and even then, wait a few months…   The consequences of breaking this rule are not as severe with banks (compared to immigration), but it’s still a big headache. 

In our case, like we did back home, we had all our autodebits coming out of our chequing account.  Because of some limitations and other annoying things about web management of your account here, we decided to switch them to come out of savings.  I emailed the bank and they said to come in and sign the forms.   They made the change and I signed the forms.  We thought everything was going well and then one day, my wife gets a recorded message on her cell phone saying if you dont pay the bill, it gets cut off tomorrow.  That wasn’t a good time, as we were both leaving the country the next day… So I checked the accounts on line and sure enough, no phone bills or cell bills, or for that matter, any utilities had been debited.  So I gathered up all the filed bills from the month and ran over to the Abitab to pay them cash.  Oops.. that was another time we actually had to talk.  They said they couldn’t take the payments because the invoices are marked, ‘debit Bank Hollandes’…   Utilities mark this on their invoices so Abitabs dont accept payment for accounts that are already being autodebited from the bank.  I had to explain, in my extremely poor Spanish, that I didn’t care.  That I wanted to pay them anway.  No point in telling them it was a mistake with the utility.  That would have caused more problems.  After a few minutes in which the clerk had to be satisfied I was of sound mind, he accepted the money and I figured everthing was OK.  Well, it was for a while.  About a week ago, my cleaning lady comes running into the house, with a look of absolute horror on her face.  She was animated and I have trouble understanding her at the best of times but when I heard her say OSE, I figured it was something to do with the water company.  So I went out to the side door to investigate and there was the OSE guy, pliers in one hand, seal in another, opening up our water supply to cut it off.  Now you have to understand that the reason she was so panicky is that no one in Pocitos has their water cut off.  I mean, who cant pay a 500 peso bill here?  (OK, so mine was 800 pesos- so what).  Me, the gringo, just stood there dumbfounded with what was probably a smile on my face.  You see, this house was a restaurant before we remodelled it and we have 2 x 2000L tanks on the roof… 4000 litres.  Enough to last a nuclear winter probably.  So I took it in stride.  I told her not to worry.  She wasn’t about to be unemployed.  That I had the money to pay her when she went home.  And that seemed to settle her down.  Turns out that they had sent us two bills, which I promptly filed in paid..because each bill said ‘payable by autodebito’…   After you ignore 2 invoices, they cut you off. 

I called the bank and told them this was nuts and what’s going on.  They actually called the water company, (no bank in Canada would do that for you… best you get there is a letter of apology).  They talked to them, and then they talked to electricity, phone, etc.  Turns out that when an autodebit is changed here, it’s a cancellation and then an add.  The cancellation department is very fast it seems.  But the add guys are on siesta most of the time, (that’s a joke.. no uruguayans I know take siestas in Montevideo… not even government employees.. except the guys who work in the parks.. and that’s only in the summer).   So what happens is that they stop hitting your account because of the cancellation but the add doesn’t get done until after the invoices go out…  and in the case of OSE, the water guys, it got lost in the add department.  Of course, when they do the cancellation, they dont take the phrase ‘autodebit Bank Hollandese’ off the invoice.  So stupid me figures everything’s just fine (of course, the month end balance was a little askew in my favour but I dont detail that more than a few times a year.. so I honestly hadnt noticed).   The bank apologized to me profusely and promised we’d be OK next month.  Well, next month was last month and they were right.  This time I checked every day and it was all there. 

Besides the aggravation, which I looked at ‘glass half full’ as a good learning experience, so it wasn’t so bad, there is the little issue of ‘multa’ and interest.  I guess I’m a wuss, because I didn’t go after my rep for compensation.  It’s funny, I would have done this in a heartbeat in Toronto but here, everything’s personal.  I know my rep.  I know her husband.  I dont want her to get hassled at the branch, so I’m smiling and letting it go.  And here, that’s no small thing.    I never really experienced multa’s (fines) before in Canada.  With the exception of video stores, (which I understand stopped the practice last year), I cant recall a utility or provider of services that fines you for late payment.  There’s a 1.5 to 2% interest charge, where the credit companies lead the way, but no fine.  The gas company back home sort of created a fine by way of reversing a bonus.  If you pay on time, you get a discount.  If you pay after you pay full price.  That’s a multi in reverse.  But here, it’s huge a a %.  Usually 10%.  So you pay 10% penalty for late payment and you pay interest at (as I recall) 2%.  I had to pay 12% on all my phones, electrical, gas and water bills.  Not enough to cry over, but enough to notice. 

So for those of you who dont know this or know this but want detail and use ABN.. here is a list of who you can pay by the bank and those you can pay by credit card.

Pay through autodebit of chequing or savings account

  • Antel/Ancel/Anteldata
  • UTE (electricity
  • Credit cards (VISA, Mcard)
  • OSE (Montevideo only) 
  • DGI

Credit card

  • Most other cell phone provides (CTI, Movistar, etc)
  • Most auto/home insurance companies
  • Most alarm companies
  • Most health care providers – both for people and pets
  • Most cable companies

Couple of other observations about the banks here.  You want to do everything in your power not to deposit a foreign cheque in our bank (I figure they’re all the same but I’d love to stand corrected).  And you definitely dont want to deposit a Canadian (and by extension an Australian or Kiwi or Englander’s cheque) here.  You’re going to freak out.  The minimum charge at my bank to deposit a foreign cheque is U$S 50.00, or 1% (or is that 2% –cant remember — I freaked out the first time and everything went out of my head), whichever is more.  You’re going to wait a month if it’s a U$S cheque and you could be waiting over 2 months for something else.  I deposited one Canadian cheque here and I’ll never deposit another.  It took over 8 weeks for the funds to be deposited in  my account.  GO TO A CAMBIO if its a US cheque.  If it’s something else, wait for a few months and I’ll have the results of intense research we’re about to start and I’ll post what I know..  or by all means… someone… tell me what you know to get around this… 

I suspect we all know this, but the simplest and least costly method of getting money into your bank here is via transfer.  It’s still costly compared to transacting back home (for Canadians anyway), but it’s not insane like foreign cheques are.   

Couple of notes about credit cards.  There are 2 kinds.  Local and International.  If you’re an immigrant, my advice is keep one or more of your cards and use it for international use.  If that’s not possible, and you plan to use a credit card outside of the Mercosur, then get an International card here.  We kept some of our Canadian cards alive so we signed up for a local card, good in the Mercosur countries only.  In pesos and USD.  Whenever you purchase, you can tell the clerk which you prefer to use.   We usually let them put the price in whatever it was shown as.  With cards issues here, you have the choice of pagos without interest.  It’s very common for Uruguayans to buy things on 6, 12 or even 18 payments without interest.  My contador side of me always wants to say yes, but the side that has to keep these things organized in my head says no.  

The international card costs quite a bit more per month to have.   We’re cheap people so we took the local for that reason too.  The local card also has a cost, actually 2.  Our is $125 per month on the peso side and U$S 5.00 on the US side.  Off the top of my head, I think International is 5x more.   The use of the card has been problem free in Uruguay and Argentina and Brazil.  So it really does work in the Mercosur.  The same is true of the ATM card.  We use them all the time without any problems at all. 

Before we were residents here, on my passport and my wife’s cedula, and the ownership of an apto, we qualified for a credit card with $1K credit limit.  When we showed them my cedula, as a resident tramite, it went up to $3K.  Recently, we asked for an increase, to handle the autodebits (see above), and on the basis of an obscene amount of money they have from us in their investment division, we were blessed with a $5K limit.  We really find this funny… like really hilarious.. because when you ask why, you get the same explanation you’d get back in Toronto.  I remember that same explanation like 35 years when I was just starting out in business… They want to see a track record.  They’ll increase your limit pretty much every year if you’re a good boy, spend lots of money and pay on time…  It doesn’t matter if you’re net worth is like $10Mil… (we wish)..  that’s not the point.  The point is the credit card division looks at track record… period. 

But the good news, just like a bed creditor starting afresh in the US, you can probably get your card for $1K limit and start out from there.  Like they say.. mejor que nada. 

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