tabbieallie

We are planning a trip from the US to the Canadia Rockies in May. Following the advice of many of the messages on this forum, I have checked into getting an ATM card to use once we are in Canada. However, I recently read that as of May 1st Canadian banks are going to start charging 2.5% (instead of the current 1%) currency exchange rate plus $5/transaction at Canadian ATMs. (We can't take advantage of the Bank of America - Scotiabank no-fee agreement that I have read about.) We would not have an "out-of-area" ATM fee from our local bank for less than 5 transactions.

With the new ATM fees, is it still more cost effective to get Canadian currency from an ATM machine rather than make an exchange at a bank?

If making an exchange at a bank is better, is it better to get it changed in the US or wait and get it exchanged at a bank in Canada? I have been told that the Custom House Currency Exchange in Banff has lower fees and better rates than banks or credit unions. Does anyone know about that?

Our (credit union) VISA provider says that the total fees to use our VISA card for purchases will be 1%, so I'm assuming it's best to use the VISA card whenever possible, but there are times we will need cash (for instance, to pay for our bed and breakfast, which requires cash).

Any updated recommendations based on the current situation would be greatly appreciated.

Thanks.

laverendrye

You need to talk to your own bank about the fees that they will charge for a foreign currency ATM transaction, as those will make up most of the charges.

If you have a card for either the PLUS or CIRRUS networks, you can access your account from most ATMs in Canada. The Canadian financial institution will charge a "convenience fee" of C$1.50 for access to the network. The exchange rate, including the surcharge, and the fee for using another financial institution's ATM will be imposed by your own bank, not the Canadian one.

I have not read of the plan to increase the currency exchange fee to 2.5% and the transaction fee to $5.00, but if correct, these would be charges paid by customers of Canadian banks for their own foreign transactions, and not by foreign customers. You must be careful to use an ATM of one of the major banks, as private or no-name ATMs charge much higher convenience fees.

Here's a breakdown of current ATM fees (ABM in Canada) from the Financial Consumer Agency of Canada:

http://tinyurl.com/2mv5k8

All in all, I think that you will still be ahead by using an ATM, rather than a currency trader, but this will depend on what your own bank will charge for the service.

ShadowM

First off I hope you enjoy your trip. For all the traveling I have done in my life (most overseas) I find the best way to do this is with travelers cheques. You only pay for the exchange difference once. There is no charge for cashing them and just about anywhere takes them. They are as good as cash but better. If you loose one you can have it replaced but if you loose cash it's gone. As for your bank card and Visa I personally feel they charge to much to begin with and now there is an extra charge to use it in another country. Not only are you being charged by them but also extra for where you use it. Beware that if you use your bank card some places charge you to use it. The fees are around c$1.50 (average) per transaction plus what ever your bank charges you and the extra for the use outside your home country. No matter what we do our money is never ours is it?! I would look into the charges more form both sides. You can always call a bank in the area where you will be staying and they can help you with what the Canadaian charges will be from them. Hope this helps some and again enjoy.

tabbieallie

Thanks to both for your suggestions. I'm finding it's hard to compare "apples to apples" when I speak to various financial institutions about this!

Judy_in_Calgary

My mother and mother-in-law, both of whom live overseas, have been charged fees for cashing their travellers cheques at banks in Calgary. They were TCs that were denominated in Canadian dollars, and they were issued by what I think of as mainstream companies (American Express and Thomas Cook). I can't remember what amounts they were charged. But I mention this as a caution that TCs are not necesarily "free" either. By the way, the most recent occasion on which this hypothesis was tested was September 2006.

Judy_in_Calgary

I've just remembered another thing about my mother-in-law's travellers cheques. During her 2005 trip she brought TCs worth C$100 each. We had to search for a bank that would cash them. Eventually we found one that would do it. The others said that they would have cashed her TCs if they had been worth C$20 each.

tabbieallie

I wanted to update this in case anyone else has these questions. I conducted a little experiment, and this is what I found:

Before we left for Canada, I bought $300 Canadian for $276 American at our local bank. When we got to Banff, I went to the Currency Exchange place that had been recommended to us and found out that it would cost $288 American to buy $300 Canadian - $11 more.

We made most of our purchases with our Visa card (issued by our local Credit Union). I added up $300 (American) worth of purchases on the bill when we got it and compared it to the receipts in Canadian dollars that we got at the time of purchase. Even with the 1% fee that Visa charged for each purchase (our credit union didn't charge anything extra), it turned out to be a few dollars cheaper using the Visa card than it was exchanging the money at our local bank before we left - and several dollars cheaper than exchanging money once we got to Canada.

We didn't use our ATM cards, but I'm sure it would have been more expensive than using the Visa card or exchanging the money before we left the US because of the $1.50/transaction fee that the Canadian ATM machine would have charged. (We could have made 4 transactions at the "out of network" machines before our home bank would have charged us a fee, and our home bank would have set the exchange rate - which I'm assuming would have been the same as what they gave us when we exchanged the money at the bank before we left.)

I realize this experiment wasn't an accurate comparison to the penny because all of the transactions took place on different days and the rates vary from day to day. However, from our experience it seems like using a Visa card for purchases and exchanging money in the US for the cash that you want to carry is the cheapest way to go.

brotchaq

Can anyone post up-to-date rates they got for converting US dollars (cash) into Canadian dollars (cash) at LAX, YYC airports or in Banff?
We can buy 2.02 US for every £1 and 2.08 CAD for every £1 in Uk at the moment so it may be more worthwhile me buying US Dollars and then converting them in the US/Canada.