cartess3

We're planning to make several trips to Panama to see if it'll be a place we'd like to move too. A question I have is how does the credit system work there?

Here in the U.S., we have to provide our social security numbers for credit checks in order to purchase stuff like cars, houses, credit cards, etc...

How does this work in Panama? How does one establish credit there, or do they use a similar system to what is being done here in the U.S. Do we start over?

My primary reason for asking is to understand the process I'd need to take to purchase a house or car should we decide to stay. Also, if we decide to rent an apartment/house, how does that process work.

On another note, do most people who come over from the US send their kids to a private school, or just to the local schools? I have children in age ranging from 1 to 10 years old.

Like I mentioned earlier, we're planning several trips there this year in an effort to get all my questions answered while physically been there.

Thanks for any advice!
Carl

ralph

I too am interested in learning how to obtain credit for home and car in panama

soltero

Houses: Google "mortgage panama" and you'll find several options/vendors. Rates and terms are not as good here as with US banks (but I have also heard there are some US institutions that will lend on Panama properties). Bank loans can be onerous, e.g. often with the condition that they can raise the rate to whatever they want.

Cars: For new cars, most all dealerships offer financing, but I cannot tell you what their terms look like. You might try going to the Richard Perez website (biggest dealer in Panama) and query them. For used cars I believe you'd need a bank loan, and for that you're going to need a job and history here.

Credit cards: You can get them from any Panama bank, but if you're new the terms will be awful, compared to the US. E.g., most first-timers are required to put money on deposit to cover all charges -- i.e., they call it a credit card, but it actually works like a debit card. Don't know how long it takes to get a true credit card.

Bottom line: For all the hype, Panama banks are several years (or decades) behind the US and Europe. They charge you for everything (even monthly statements and incoming wires), they hold deposited US funds for one to four weeks (depends on the bank), and internet banking, while available, is pretty primitive by US standards.

So, the real issue is: Why bother? Most ex-pats set up checking and savings accounts for the occasional large purchase (like a car), but continue to use their ex-home accounts for everything else. E.g., I use an ATM card from a US brokerage and never pay a fee, anywhere in the world. (The first time you use your Panamanian ATM card in the US, you'll be in for a shock.) I use a US credit card that never charges foreign transaction fees and earns mileage points that work on any airline, anytime (there's nothing similar offered in Panama). I simply don't see the need for anything else, and my money in the US is insured; in Panama, no. As much as I love Panama -- it is my home -- I'm never going to move a large amount of money here, beyond the investment in the place I live in and the car I drive.

soltero

Carl, just curious: If you move to Panama, what kind of visa are you planning to get? ...because virtually all the (legal) options require either a chunk of cash or a lifetime pension (and they're cracking down on all non-government pensions for anyone under the age of 65).