I went to the ATM yesterday and asked for $200, and got it all in $5 bills! Usually the ATM gives $20 bills but sometimes you run into someone who doesn’t have that much change, so I’m not unhappy about the $5 bills or the wallet that is too fat to close.
But, this got me to thinking about how to manage money if you live here. There are many ways and you will certainly get different opinions from different people, but this is what has worked well for us.
We have found it very helpful to maintain a US address for banking and other business (We live in California with my daughter and travel a lot 😉 ). If there is something important she can click a photo of it and email it to me. It is very rare that she has to physically send something down here. Keep in mind that if you have stock market investments, it is possible that your bank or investment company won’t even allow you to continue to do business if you have a foreign address. We like Schwab because they refund our ATM fees, and I have been happy with their service overall for many years.
Supermarkets and large stores take credit cards (If you are not a resident, your passport serves as your ID when needed). Roadside markets and smaller shops need cash. Our social security payments are deposited in our US Schwab account. We pay credit cards and other bills on line and get cash as needed from an ATM. You can operate this way indefinitely without a Panamanian bank account.
Joel and I have separate accounts and three active credit cards each. I have known people who come here with only one or two credit cards and then if there is a problem, it can be a huge problem! We have things set up so we can move money between accounts and between banks, so hopefully we will never be left without access to our money. There is Western Union here though in case someone is really stuck and needs money sent to them.
We were considering buying a bit of property in the past and wanted to establish a relationship with a Panamanian bank. We were introduced to someone at Scotia bank by a Panamanian friend, and went through the process of collecting all the necessary documents (letter from our US bank, proof if income and/or tax returns, letters of recommendation both professional and personal, filling out lengthy forms… it was a while ago so I probably forgot something but you get the idea). It was a process but we were successful in getting Panamanian bank accounts, so we each now have a savings and checking account at Scotia Bank. We were not residents at the time, and I have heard the process is easier after you get residency.
Having a Panamanian account has been convenient at times. I can refill my phone time on line, rather than going to the office or buying a card somewhere. I have had to pay a few people and I can transfer money from my Panamanian account to theirs. Some bills are even paid this way, by transferring money from your account to the company account. One thing was different though. I discovered my debit/credit card was using the money in my savings account, not the checking account. This isn’t a problem as long as I know, but I was a bit confused at first when my card said I was about out of money.
We have not financed a car, property, or other large purchase in Panama so I can’t say anything about how that would work. But, for our daily lives this arrangement has worked well for us.