Sending Money Home: Compare Costs and Know Your Rights

Many families in the DC area send money to relatives in El Salvador, Guatemala, Honduras, Ethiopia, Nigeria, and many other countries. Companies compete for this business, and some advertise “no fees.” But the fee is only one part of the cost.

Money sent to another country is called a remittance transfer. Its cost has three parts:

• The transfer fee that the company charges you.
• The exchange-rate markup. Many companies give you a lower exchange rate than the market rate and keep the difference. You do not see it as a fee, but your family gets less.
• Taxes and other fees, such as the 1% federal tax on transfers paid with cash, or fees charged by a bank in the other country.

The best way to compare is simple. For the same number of dollars, which company delivers the most money to your family after all costs?

If the other country uses the U.S. dollar, as El Salvador and Ecuador do, there is no exchange rate. Then you only need to compare the fees.

A federal rule, the Remittance Transfer Rule, protects people who send money from the United States to other countries. It covers most transfers of more than $15. Companies that make 500 or fewer transfers a year do not have to follow it, so use a well-known provider.

Before you pay, the company must give you a disclosure, on paper or on a screen. It must show:

• The amount you are sending
• The fees and taxes the company collects from you
• The exchange rate
• The amount your family will receive
• A note if other fees or taxes in the other country could lower that amount

If the company advertises its transfers in your language at that location, ask for the disclosure in your language. It must give it to you in that language.

After you pay, you get a receipt. It shows the date the money will be available, your rights, and how to complain. Keep it until your family has the money. Keep it longer if there is a problem.

1. Cancel within 30 minutes. After you pay, you usually have up to 30 minutes to cancel for free, as long as the money has not been picked up or deposited. You get your money back, including the fees.
2. Report errors within 180 days. Contact the company if your family got less than the receipt promised, the money never arrived, or it arrived late. You have 180 days from the date the receipt said the money would be available.
3. The company must investigate. It has 90 days to look into the problem, and it must tell you what it found. If it made an error, it may have to refund your money or send the transfer again at no cost to you.
4. Complain if needed. If the company does not fix the problem, file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov/complaint or by phone at (855) 411-2372.

What to say when you report an error

Hello. My name is [your name]. I sent a transfer on [date]. The confirmation number is [number]. The receipt says [amount] would be available to [name of the person receiving it] in [country] by [date]. [The money has not arrived.] or [My family received less than the receipt says.] I want to report an error. Please investigate and send me the result in writing. What is my case number?

A federal law passed in 2025 created a new 1% tax on some transfers to other countries. It applies to transfers made on or after January 1, 2026. You pay the tax when you give the transfer company cash, a money order, a cashier's check, or a similar paper form of payment. The company collects the tax from you when you send the money.

$300 paid in cash × 1% = $3 tax

$3 × 12 months = $36 a year, if you send $300 in cash every month

The tax does not apply when the money comes from an account at a U.S. bank or credit union, or when you pay with a debit card or credit card issued in the United States. If you have an account, sending from it avoids the tax.

Be careful with credit cards. Some card companies treat a money transfer as a cash advance. Cash advances often have an extra fee, and interest often starts on the first day.

There are three common ways to send money to another country:

• Banks and credit unions. Useful if you and your family both have accounts. Prices vary a lot, so ask for the fee and the exchange rate.
• Money transfer companies with stores. Your family can often pick up cash. There are many locations in DC-area neighborhoods. If you pay in cash, the 1% tax applies.
• Apps and websites. These often cost less. You usually pay from a bank account or debit card, which avoids the 1% tax.

Before you send, go through this checklist:

• I compared at least two companies on the same day, for the same amount.
• I compared the amount my family will receive, not only the fee.
• I know whether the 1% tax applies to the way I am paying.
• I know how fast the money will arrive and how my family will get it.
• I checked the name, phone number, and account number of the person receiving the money.
• I kept the receipt and the confirmation number.