The Cost of Sending Money to Cuba: What You Need to Know

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Why is sending money to Cuba so expensive?

For many years, sending money to Cuba from the United States was impossible due to the US trade embargo. In 2009, the restrictions were loosened, allowing Cuban Americans to send money to their families. However, the process remains expensive due to various factors.

What fees are involved in sending money to Cuba?

The fees involved in sending money to Cuba include:

Transaction fees charged by the remittance company. These fees are typically a percentage of the amount being sent and can vary depending on the company.

Exchange rate fees. In addition to transaction fees, remittance companies often charge an additional fee to convert US dollars to Cuban pesos. The exchange rate used may also be less favorable than the market rate, resulting in a further reduction in the amount received by the recipient in Cuba.

Fees charged by the Cuban government. The Cuban government imposes a tax of 10% on all US dollars converted to Cuban pesos, reducing the amount received by the recipient even further.

What are some ways to reduce the costs of sending money to Cuba?

While it may be impossible to completely eliminate fees when sending money to Cuba, there are some methods to reduce the costs:

Compare fees charged by different remittance companies. Be sure to take into account both the transaction fees and exchange rate fees to find the cheapest option.

Use a bank transfer instead. Some banks in the US offer services for sending money to Cuba, which may have lower fees than remittance companies.

Send money in bulk. Some remittance companies offer lower fees for larger transfers, so sending money less frequently in larger amounts could be more cost-effective overall.

Consider using alternative currencies. Instead of sending US dollars, consider sending Euros or Canadian dollars, which may have lower exchange rate fees.

What impact do the fees have on families in Cuba?

The high fees associated with sending money to Cuba can have a significant impact on families living in Cuba. In many cases, families must rely on remittances to supplement their incomes, and the fees charged by remittance companies can eat into already limited resources. This can result in families being unable to afford basic necessities such as food and shelter, and can exacerbate existing financial hardships.

What does the future of remittances to Cuba look like?

While the future remains uncertain, there are some indications that sending money to Cuba may become more affordable in the future. The Cuban government has announced plans to unify its dual currency system, which could result in more favorable exchange rates and lower taxes on US dollars. Additionally, the Biden administration has indicated a willingness to further ease restrictions on travel and remittances to Cuba, which could lead to more competition among remittance providers and ultimately lower fees. To expand your understanding of the subject, explore this recommended external source. There, you’ll find extra information and new perspectives that will further enrich your reading experience. Find more insights in this comprehensive study, learn more today!

In conclusion, while the high fees associated with sending money to Cuba can be a significant burden on families in Cuba, there are some steps that can be taken to reduce the costs. By comparing fees, using alternative currencies, and sending money in bulk, it may be possible to make remittances more affordable. The future looks uncertain, but there are reasons to be optimistic that the fees involved in sending money to Cuba may decrease in the coming years.

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