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Sending money to pay a bill from within Canada

Sending money to pay a bill from within Canada

May 11th, 2004, 06:33 PM
  #21  
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Join Date: Jan 2003
Posts: 6,019
I know that I was raised in the era when there were no ATMs. One either carried cash, and accepted its risks of loss or theft, or used American Express.
Then other checks came into the competition and some banks reduced the fee to zero as a marketing ploy. I have used travelers' checks extensively in the past, but ATMs have changed how we get money for travel.

I know that some people don't adjust.
And here is a true story on me. A casual friend of mine went to Europe 3 years ago. Knowing I went to Europe, he asked me about the money issue. I gave him the same outline I just gave above.

When he got back he chewed me out for costing him $xx in bank fees for using his ATM card. I told him there was no way he should have paid that much. After some harangue, it turned out that he did not know the difference between a credit card and an ATM card. In fact he did NOT HAVE an ATM card or a debit card at all!! He used his credit card to get cash at the machines. Each withdrawal was a cash advance for which there was a substantial charge. There are fees and a very high interest rate. So don't be like that fellow! Know your plastic!!

If I acquire foreign currency before I leave to take along, it is because I don't want to arrive with zero local money. But in some cases, I have done that because I knew ATMs were in the train station or airport where I was arriving.

The last place you want to exchange is at a "change booth" at an airport. I always check the rates at the one in the Atlanta airport. Usually anyone unfortunate enough to go there gets socked at an exchange rate that is in the vicinity of 10%. That to me is getting close to highway robbery.
That means, in simple terms, you would receive $90 worth of what ever you were exchanging into.

To continue the demonstration, check Yahoo's foreign exchange table. It is easy to find. On the main page find Finance. It is on the same line as Sport and Weather.
Click there. Then go to International and find Currency. Click on Currency, and a table will appear. You will need to scroll down to find all of it, but the major currencies are there.

For example today, the exchange rate between the US $ and the Canadian $ was
.7216 if you are buying Canadian, or
1.3859 if you were buying American.
It also means that if you handed over $100.00 US you should receive $138.59 Canadian in return. This of course is the bank wholesale rate. Transactions, particularly small ones, rarely happen at this exact rate. There is always a discount, or an add-on depending on how you look at it.

In my experience, when I put in my ATM card at a Canadian bank, I get the wholesale rate plus an add on of 1%.
The exchange rates fluctuate constantly all day long, and just how a rate is plucked out of the daily stream and applied to each conversion is something Visa will not disclose. But in some testing, I have always received a rate of exchange, plus 1%, that was more in my favor than the lowest rate, but less in my favor than the highest rate for the day. The effective rate i received was somewhere around the average of high and low, plus the customary Visa or Master Card add-on of 1%.

I cannot really object to that because there is some expense involved in the equipment, the accounting, etc. It certainly beats the 5% you would pay for converting currency inside at the cashiers window.

Some people argue that the amount is trivial, etc. Well given my trip to Canada when I can get there each year and a trip to Europe, I will be swapping several thousand dollars.
Using $7,000 as an example, 4% of that amount is $280.
I can buy a very nice dinner for my wife at least twice! (More like 4 times!)And if you saw $280 lying on the sidewalk, I think you might break a drawstring in your haste to pick it up!

At least if you do get "took" you will know who is doing it to you and how much you are being clipped. And, one last confession, I took a lot of economics courses as a student, and wrote research papers involving international trade. I like to think I still know something about it. I don't always, but we can always pretend.

I know one of the rookie mistakes I made in 1998 was to acquire foreign currency before leaving. I paid about 6% for it. I have not done that again.
I was unfamiliar with the prevalence of ATMs and, being risk averse, I acquired the currency through US sources. Expensive mistake. I know better now.

Thanks for the encouragement. In late March, my arthritis finally got to the point I could not walk without crutches, and I knew the time had come, particularly when the pain forced me to my knees a few times.

I hiked for years in some discomfort and on pain pills and anti inflammatories and took care of the joint by ascending and descending carefully. But things finally just wore down too much.

The strength will return. I just need to keep on my program of recovery.
Encouragement is important and I thank all who have passed it along.
bob_brown is offline  
May 11th, 2004, 11:34 PM
  #22  
 
Join Date: Jan 2003
Posts: 2,121
I wish I would find $280 on the sidewalk. You have provided some valuable information not only to me but to my relative who is planning his first trip (and wedding) overseas. Thanks. Blasted arthritis - but that's another story.
April is offline  
May 12th, 2004, 02:42 PM
  #23  
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Posts: 6,019
My pleasure. I hope what I said was good for something!!
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