Whether you’re headed to Panama on a scouting mission or have recently relocated, you may wonder how you can pay for things in Panama and if you can use your foreign credit card in Panama.
While Visa and Mastercard are accepted in some places throughout Panama, American
Express is less commonly accepted. If you use your credit within the country, consider foreign transaction fees. And, since the economy is mainly cash-based, you should always carry cash.
Keep reading, and we’ll dig into the specifics of using credit cards, debit cards, and cash throughout the country. And I’ll share my best tips for managing your money when you move to Panama.
Visa and Mastercard Are Accepted in Some Places
Visa and Mastercard are accepted in many places within Panama, but not nearly as widely as you may be used to in other countries. Generally, credit cards are accepted in hotels, large restaurants, box stores like Pricesmart or Novey, or clothing retailers.
In major cities like Panama City, you will find far more businesses that accept credit cards than in smaller towns.
If you have an American Express card, it may be accepted at some hotels, but otherwise, it’s not commonly accepted within Panama.
Credit cards are a great way to pay for larger purchases, such as your hotel, Airbnb, or
groceries, but make sure you’re clear on your credit card company’s policies around foreign transactions. You may need to notify your bank that you will be using the card in Panama to avoid it being shut off because they suspect fraud.
Always keep your credit card in your sight. Ask the vendor to bring a credit card machine to you or go to the cash register to pay your bill.
Be aware of foreign transaction fees
Even though the currency in Panama is the US dollar, you will still be subject to foreign
transaction fees when you use your credit card abroad (unless you have a card that doesn’t charge these fees).
Foreign transaction fees may amount to as much as 3% of your purchase, which adds up quickly! Check the terms of your credit card agreement before using your card abroad, so you don’t see any surprises on your statement.
Some travel credit cards don’t charge foreign transaction fees, so it’s worth opening one of these accounts if you don’t already have one. These cards often have additional perks, such as built-in trip insurance, the option to accumulate points toward travel rewards, and more.
Make sure you have access to cash too!
While credit cards are accepted in some places, the economy in Panama is ultimately very cash-based. Street vendors, small restaurants, and independent shops will almost always be cash only, so you should always have some cash on hand to cover daily expenses.
Smaller bills like $1, 5, and $10’s are best because many vendors cannot make change for larger bills.
WARNING! Taxi drivers are notorious for saying they do not have change!
You will probably find that many places you want to frequent, such as vegetable stands and fondas (small restaurants), only accept cash.
Often you’ll be able to spot cash-only businesses because they’ll have a sign posted by the register that says “solamente efectivo” or “solo efectivo,” which is Spanish for “cash only.”
If you’re unsure, ask whether they accept credit cards before you order anything!
Unless you rent from AirBnb, you will not be able to use a credit card to pay for rent. You will need to pay cash for rent or transfer money into your landlord’s bank account. Landlords in Panama will not accept a check from another country. In Panama, it’s common for the landlord to give you their bank account number so you can pay rent.
How to Get Cash While In Panama
You can withdraw cash from local ATMs using your foreign debit card. The best ATMs to use are those affiliated with banks. ATM withdrawal fees are about $5.25 per transaction, plus whatever your foreign bank charges for using an international ATM.
There is a $250 withdrawal limit on ATMs, too, and you can only make two daily withdrawals per card. This can be really frustrating if you need to make a large payment (such as your rent), but there are ways around this for Panama residents, which we’ll discuss more below.
Since the ATM withdrawal fees are so high, it usually makes sense to max out the withdrawal limit each time you get cash. Because the country is heavily cash-based, you never want to have a shortage.
ATMs may be harder to find when visiting small, rural towns within Panama. So, make a habit of carrying enough cash to cover your daily expenses, and have a spare stash just in case ATM access is limited. During major holidays, ATMs may be out of cash.
Save on cash withdrawal fees with Charles Schwab
If you’re from the US, opening a Charles Schwab or Fidelity account is the best way to save on ATM fees and make it easy to access your cash anytime.
Charles Schwab’s High Yield Investor Checking account has no account fees and no minimum balance requirement. This account has no foreign transaction fees, and it offers unlimited ATM fee rebates worldwide. That means each of those $5.25 ATM withdrawal fees you pay in Panama will be refunded at the end of each month.
A Charles Schwab account is a must if you don’t have one already.
Open a Panama bank account
Once you’ve completed the residency process in Panama, it’s best to open a local bank account and get a Panama credit card and debit card.
Be aware that once you open a Panama bank account, you must have activity every six months, or your account will be frozen until you go into the bank to make a deposit and sign documents to reactivate your account. You will NOT lose your money. It’s better not to open a Panama bank account until you move to Panama.
With a local bank account, you won’t be restricted by the $250 withdrawal limit, which can be a problem when paying rent. You also won’t be subject to foreign transaction fees and heft ATM fees. If you use our Panama debit card at a branch at the same bank, there is no transaction fee. If you use your Panama debit card at a different bank in Panama, the fees are usually $1.
Plus, with a local bank account, you can set up online bill payments to cover your
recurring expenses, such as rent, internet, and your cell phone, so you never miss a payment, even if you’re out of town!
When looking for a bank account in Panama, your primary considerations should be:
● Does it offer online banking in English?
● What is the minimum deposit?
● What documentation do I need to provide to open an account?
Banismo and Global are the banks that I typically recommend to new and future expats in Panama. This is because it offers online banking in English, which is convenient if you don’t speak Spanish. They have branches throughout Panama. Most banks either require that you already have legal residency in Panama or at least a letter from your immigration attorney that you are in the process of getting a visa.
Once you have a Panama bank account, you can transfer money each month to cover your living expenses.
Because Panama uses the US dollar as currency, you can deposit checks from your US bank to your Panamanian account and pay zero fees. Keep in mind that it may take several weeks for the deposit to go through, so you need to plan ahead to ensure your funds will be available when you need them.
Another popular way to move money from your foreign bank account into your Panama bank is via wire transfer.
You can wire money to Panama directly through your bank, but this is usually more costly than using a third-party service. It typical fee to do a bank-to-bank wire transfer is $50. If you are from Canada, OFX offers a very competitive wire transfer rate.
Wise and Remitely are other popular ways to move money into your Panama bank from accounts almost anywhere in the world.
If you have a Panama Paypal account, you can connect it to your Banismo account and move funds that way. We have details about how to do this in the Complete Panama Relocation Guide. Banismo is the only Panama bank that enables you to connect to your Paypal account.
Come See How You Can LIVE BETTER for LESS in Panama!
Get all the information you need about how to have a smooth, hassle-free move to Panama with the Online Complete Panama Relocation Guide. You’ll learn about how to pick the right visa, finding a rental, how to save 40% when buying health insurance, buying a car and much more. You’ll also get our rolodex of reliable, trusted contacts for immigration lawyers, insurance brokers, real estate agents, international movers, car brokers, etc.
For more info on managing your money while in Panama, check out this video