I've never traveled out of the US before and will be making 2 international trips this year, 1 to Canada and the other to Europe. I'm a little confused with the conversion rate information that i've read online so far. Here's where my confusion is: If I were to use my credit card in europe, will I be charged a conversion rate. I've been reading different posts that talk about a 2-3% conversion rate when using credit cards, is this in the case of cash withdrawls only? Thank you.

The fees charged vary from bank to bank, and there's no easy way of us predicting your situation.

In Canada, one bank is promoting US-dollar credit cards for Canadians to use when they visit the USA, in order to reduce conversion fees.

American ATM cards work in Canada just fine, but again, the charges vary depending on your US bank, plus the ownership of the Canadian ATM.


the "best" bank machines in Canada re owned by the big banks, and they generally cost less to use than what are called "white label" machines.

The biggest real banks are RBC/Royal, Soctiabank, BMP/Bank of Montreal, TD-Canada Trust, and CIBC.

Look for a Cirrus or Plus symbol on your card, and on the bank machine.

Machines with other names, inside bars, resturants, stores, generally cost more.

Hi Jenny,
it is really confusing. Let me try to help out. Hopefully I have this about right. The problem is, everybody wants a cut of your currency transaction.

When you see a published rate in a newspaper, like $1 Can = .82 USD, this is usually (but not always!) the interbank exchange rate. No one will give YOU this rate, its what the banks get when they sell currency to each other.

Visa and Mastercard generally charge you about 1% more than this. Recently, the issuing banks...you know Citibank or MBNA or Capitol One, started adding on 2-3% more. This will apply on all transactions that use foreign currency. SO you will end up getting an exchange rate anywhere from 1-5% higher than what you see in the newspaper.

Still, this isn't too bad. If you try to sell US Dollars or travelers checks at a currency exchange or bank at your destination, you will probably get a worse rate. Or a similar rate, PLUS a fee.

To find out if your issuing bank has the 2% fee, you'll have to contact them. And even then, the person you talk to may not know for sure. I think you are less likely to find this additional fee if your credit card comes from a savings bank or credit union (rather than a large commercial bank). And Citibank and MBNA underwrite most of the specialty cards ...miles cards, sports team cards, and what have you. So if that's what you use, that will most likely have the extra 2%.

Most credit cards hit you with a hefty additional fee if you get a cash advance, regardless of whether this is in the US or overseas. This is usually the worst way to get cash. You are much better off with an ATM or debit card to get cash.

Here's a really easy way to find out what your bank is charging on conversion rates. First assume that the official rate is $123.50CAD for $100USD. Then go to your bank and ask them what it will cost to buy $100US and lets say they say that it will be $127CAD. Now ask them how much they will buy $100US for and they will say its $120.00. Now you know that they are charging you $3.50 for every $100CAD. Simple, isn't it?

Here's a great article that helped me.
http://www.usatoday.com/travel/news/...OE=click-refer

I am Canadian and just returned from a trip that included the UK, Italy and Poland. I made cash withdrawals using my ATM card in the UK and Italy and used my credit card in all three. I purchased Polish currency in Toronto prior to departure (I had leftover pounds and euros already). Now that I have my bank and credit card statements I know the relative costs of everything. When the $3 (Cdn) ATM charge that my bank charges is figured in, the credit card and ATM rates were within 1% either way of each other. The peace of mind of having Polish currency in my pocket cost me from 0% to 3% compared to the credit card rates depending on the day of the transaction.

Bottom line is that my experience is there is little to choose between getting cash locally at an ATM and using your credit card. It might be a bit different with other banks. Buying foreign cash at home costs more (sometimes much more) but feels good in your pocket when the plane is landing and you don't have to think about getting local cash immediately.

This is a tough question to answer. It depends on the bank and where you use your ATM card.

For credit card purchases, some banks in the US are socking us with an extra 2% in addition to the 1% normally charged by Visa and MasterCard.

Here is a synopsis of ATM usage in Canada. I have two of them; one is primary, the other backup.

My primary one is issued through Bank of America. I am allowed 2 off net transactions at an aTM per month.

IF I do business with Scotia Bank, I am considered "on net" because Scotia Bank is an affilitate of Bank of America.

If I use my credit card, I have, to date, used my AAA card issued through MBNA. I do that because so far I am charged only the 1% add on.

My Canadian purchases are converted to US dollars. This is a very routine conversion because it happens every day at known rates of exchange. The whole thing is electronic and I do not see how in the world an extra 2% is justifiable.

My experiences in Europe are the same those in Canada. If I am in the UK, I use ATM's at Barclay's Bank as much as
possible because it is an affiliate of the Bank of America.

This year, because of some double talk involving the AAA card, I got a Capital One Master Card to go along with my AAA card. I hope AAA sticks to the 1% charge. I am growing bored with dumping credit cards because they start tacking on the extra 2%.

Some argue that the 2% is only a little bit to pay. Perhaps. But there is really no value added, so it hits me that the bank is just grubbing money -- my money.

Be aware, however, that the scene is shifting on this question. Banks are tacking on charges and making life in general more difficult for international travelers. I may find this year that what I experienced last year is no longer how things are done.

I guess I will know when I get my first statements after my return from Europe.

By the way, just in case of a real tight, I carry a few traveler's checks with me. Some of them are now veteran travelers. I keep the same ones.
But, if interest rates go higher, I may have to reconsider. I am afterall making an interest free loan to
AE with my money.

Providian has a VISA card that only charges 1%. I called them a few weeks ago so I would know which card to take to Canada.
Not sure about AAA VISA. I believe they now charge 3%.
I think it is worth a call to find out what you will be charged. Maybe they keep track of requests for this information and will keep those fees low!

This issue is a constant source of irritation, mainly because things have been getting even worse recently. But To Gary A in particular: It's not that simple.

You explain how to determine what a particular bank is providing for "over-the-counter" exchange rates. Those are typically in the area of "exorbitant." To wit: when I left for Italy and purchased Euros at my bank before I left, I lost 10% in exchange mark-up.

However- when using my ATM card, I was charged about 1% over the going exchange rate- and that was it. In addition, no fees were charged for using an ATM other than my bank- either at the ATM in Italy or from my bank. Of course, you must check with your bank for their policies. The point is, though, doing an exchange between currencies over the counter in person at your bank is not an accurate reflection of the exchange rate you'd get using the ATM, which is often if not always much lower.

To BAK:

In direct response to your comment that the "best" ATMS are the ones provided by the big banks, I disagree. Look for ATMs that are affiliated with or part of caisse populaire, the Canada national credit union association. They do not charge fees for using debit cards from outside their system and they provide the most reasonable exchange rates possible. They may, however, initially deny access because they do not accept your bank debit card. Yet, if they do, you'll benefit from the savings.

If you choose not to use a bank debit card, the caisse populaire over-the-counter exchanges (purchase of Canadian money), while more expensive than those from the ATMs, are less than you'd find at the "big banks" as well. It's in the cost of maintaining the respective institutions.

Zola is right that there are ATMS from institutions other than the big five banks which charge the same fees. The Desjardins ATMS and various credit unions are a case in point. My bank (Alterna) is also one of these. The trouble is that these are often hard to find (except for Desjardins in Québec), while the big five have ATMS everywhere.

What BAK was warning against is something quite different, i.e. the so-called "white label" ATMs which one finds in convenience stores and similar places (including airports). These charge extr fees above and beyond the normal bank fees, and shold be avoided unless absolutely necessary.

Therefore, from a tourist's point of view, a big five ATM is probably the most convenient way to get cash.

Has anyone used www.xe.com to purchase foreign currency? I looked into it briefly, but haven't exactly figured out how to make it work to my benefit. I'm traveling to Canada, so I'm looking to exchange US Dollars for Canadian Dollars without losing more than necessary in the transaction. From what I understand, xe.com will exchange the currency without adding any extra fees, but you need to have some way for them to deposit the funds into an account of the foreign currency. So I would need a Canadian account?? From my research I don't see how I can open a Canadian account...Is there some way to do this? Or some way to open an account in America that holds Canadian funds without a charge?

MrK, why do you think you need to convert currency before you arrive in Canada? For tourists, the obvious answer is to use your ATM card in Canada for cash as you need it, taking out several hundred dollars at a time so your $3 (approx) fee amounts to only a very small percentage of the transaction.
The convenience of ATMs can't be beat, and any menthod of exchange will cost something, so realx and enjoy your holiday knowing you've obtained the best deal (or very very close to it) hassle-free.
Don't worry about arriving in Canada with only US dollars -- businesses in border towns and airports will accept them if you find all ATMs out of service, and give you change in Canadian.
If you will be in Canada for an extended period and need an account in a local bank, open it after you get there with Canadian cash you get from an
ATM and then make the international exchange arrangements for transferring more funds.

Most US ATM cards have a limit on the amount of cash that you are allowed to withdraw each day. Most tend to be in the $300-$500 range.

Of course, there are the normal options of ATMs, credit cards, change bureaus, traveler's checks, etc., but I think that there is probably some more creative way to handle the money conversion issue (while saving money) and I'm just wondering if anyone has made any attempts -- and if so, had any success.

MBNA told me they were charging 3%...so...we converted money (not free, either)...and the one transaction we DID put on a CC ended up costing us 1%. Bottomline...even if it is 3%, its less than sales tax in US and prob less than coverting and re-converting leftover cash. When I go again, I will use CC for all but incidentals.