US Dollars to Canadian-Help, please

Old Jul 31st, 2002, 08:32 AM
  #1  
Mel
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US Dollars to Canadian-Help, please

Daughter's heading to Canada Sunday. For best exchange, should she go to a bank here in the US and exchange to Canadian dollars or do so when she arrives in Canada?

Thanks SO much!
 
Old Jul 31st, 2002, 09:02 AM
  #2  
Cathy
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She should charge as much as possible. The credit card companies give good exchange rates and she won't have to worry about it. Then exchange some pocket money at the bank or at the border if she crosses by car.
 
Old Jul 31st, 2002, 09:04 AM
  #3  
Mel
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Thanks for the quick reply. Exchange for incidentals on the US side or Canadian side of the border?
 
Old Jul 31st, 2002, 09:09 AM
  #4  
Louis
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If you want to change money, you will always get a much better rate in Canada, especially at banks and places like Thomas Cook and American Express offices.
 
Old Jul 31st, 2002, 09:15 AM
  #5  
Sue
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She should use her ATM card to get C$.
 
Old Jul 31st, 2002, 09:55 AM
  #6  
s
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She should charge everything she can. The credit card companies usually give the best exchange rate. Only change to CAnadian money what you will use for small purchases
 
Old Jul 31st, 2002, 10:19 AM
  #7  
Mel
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Thanks SO much for the helpful replies. Based on your feedback, I've advised her to change about $100 US into Canadian AFTER crossing the border at an ATM and charging everything she can.

Many thanks!
 
Old Jul 31st, 2002, 10:35 AM
  #8  
klam
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Just a note...you might want to suggest withdrawing $150 once she crosses the border. Of course, the money that comes out of the ATM is Canadian $. $150CAD is approx. $100US. When she gets her bank statement she will see exactly how much US that $150CAD cost her.

If you tell her to take out $100US, she may just enter in $100 at the ATM, and of course, she will get $100CAD (much less than $100US). I just mention this so that she doesn't have to do 2 ATM transactions if she runs out of money for incidentals, as many banks (home banks) charge fees for accessing other banks' ATM's. My bank, Fleet, charges a whopping $5/trans!
 
Old Jul 31st, 2002, 10:37 AM
  #9  
Bob Brown
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Hi Mel. I have written up several detailed sets of figures which I posted on the Canadian forum. At one time in graduate school international trade was my area, so I follow exchange rates as a hobby.

As near as I can tell, these are the cheapest ways to do convert American dollars to Canadian.
1. Use an ATM card for currency; it will cost you about 1%.
2. Use an charge card where possible, subject to this warning:
Visa and MC charge 1% for a conversion fee, BUTTT, some banks tack on an extra 2%.
(Credit cards issued by MNBA do not carry an extra 2%. Cards issued by Bank of America do.)

Now there are some caveats and conditions.

(I fully appreciate local circumstances may influence my statements.)

Check with your bank and find out what its off net withdrawal fees are.
(My bank lets me have 2 freebies per month; then I have to pay $1.50 US per use.)

Avoid non bank ATM machines. These often carry a surcharge. They can be found in retail stores.

Let me give you a concete example; I will put my money where my mouth is so to speak.

One day in Canada I drew out $200 Canadian. It cost me $132.33 on my bank statement. At that rate, I paid
a little over 66 cents for each Canadian dollar, 66.16 cents to be more exact.

The lowest, close and highest rates for that date were, respectively:
.6549 .6565 .6581

I do not know which rate was used for my transaction. (Not on my statement.) At the highest rate, $200 cost the bank 131.62; at the lowest rate, its cost was $130.98
Assuming I was converted at the highest rate, the transaction cost me
132.33 - 131.62 = 71 cents US.
That is about half of a percent.
Taking the lowest rate of .6549, my $200 cost me $1.35, which is 1.020% od nt cost.
So my fee was somewhere between .5% and 1%. Being a pessimist, I assumed 1%

 
Old Jul 31st, 2002, 10:47 AM
  #10  
Bob Brown
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Hi Mel. I have written up several detailed sets of figures which I posted on the Canadian forum. At one time in graduate school, international trade was my area, so I follow exchange rates as a hobby.

As near as I can tell, these are the cheapest ways to do convert American dollars to Canadian.
1. Use an ATM card at banks for currency; it will cost you about 1%.
2. Use a charge card where possible, subject to this warning:
Visa and MC charge 1% for a conversion fee, BUTTT, some banks tack on an extra 2%.
(Credit cards issued by MNBA do not carry an extra 2%. Cards issued by Bank of America do.)

Now there are some caveats and conditions.

(I fully appreciate local circumstances may influence my statements.)

Check with your bank and find out what its off net withdrawal fees are.
(My bank lets me have 2 freebies per month; then I have to pay $1.50 US per use.)

Avoid non bank ATM machines. These often carry a surcharge. They can be found in retail stores.

Don't convert at retail stores UNLESS you know what you are doing for a variety of reasons.

Let me give you a concete example; I will put my money where my mouth is so to speak.

One day in Canada I drew out $200 at an ATM, which cost me $132.33 on my bank statement. I paid
a little over 66 cents for each Canadian dollar, 66.16 cents to be more exact.

The lowest, close and highest exchange rates for the date were, respectively were:
.6549 .6565 .6581 (US cents for $1.00 C)

I do not know which rate was used for my transaction. (Not on my statement.) At the highest rate, $200 cost the bank 131.62; at the lowest rate, its cost was $130.98
Assuming I was converted at the highest rate, the transaction cost me
132.33 - 131.62 = 71 cents US.
That is about half of a percent.
Taking the lowest rate of .6549, my $200 cost the bank $130.98. The difference is $1.35, which is 1.020%

So my fee was somewhere between .5% and 1%. Being a pessimist, I assumed 1%

 
Old Jul 31st, 2002, 11:18 AM
  #11  
Mel
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I LOVE this place...

Okay, so I'll make sure she
1. checks with her bank to find out how many "free" withdrawels she can make per day.
2. Make sure she withdraws from a BANK ATM as opposed to in stores, etc.
3. Presses the "Canadian" button when making a withdrawel

I'll print out your replies for her. By the way, this might seem a bit knit-picky, but she's now a single mom traveling on a budget with the kids so everything helps

Bob--nice running into you over here

Thanks again, everyone!
 
Old Jul 31st, 2002, 01:10 PM
  #12  
x
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tell her to change it back b4 she leaves Canada....you can also change money at an airport....don`t know if she is flying...
 
Old Jul 31st, 2002, 02:59 PM
  #13  
r-travels
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Watch your purchases! If you spend > $200 before taxes, you can get back the Canadian tax for each invoice of $50 or more (before taxes) ... we had a few receipts of high $40 that were excluded, and had we known would have spent just a little more!
 
Old Jul 31st, 2002, 03:39 PM
  #14  
Bob Brown
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If you print my comments, they need editorial work. I type poorly and I know it; unfortunately my proof reading is about as bad.

Please, don't change at an airport. The most exorbitant exchange rates I have ever seen are at these change windows in airports. I checked out the one in Atlanta before we went to Canada.
I will be needing euros soon, so I took a look to see if the change office was a possibility. NO!! And I was astounded by what I saw. At the time, the euro and the dollar were within a cent or two of even value.
This exchange office wanted to pay 90 US for 1 euro, or charge $1.10 for 1 euro. That is a 10% fee.

One other practice I learned about one year by accident was the use of exchange rate manipulation to promote merchandise. We were in Banff in early September. Labor day was coming up and the Banff merchants were expecting quite a few US visitors.
There were signs posted in windows advertising a very good rate of exchange for people with dollars to spend.
The merchants' association had set sales dates, but the period did not start until after Labor Day (USA).
Some of the merchants said "No problem."
They simply adjusted the exchange rate for purchases in US dollars to attract buyers.

That was not the case two weeks ago, however. I saw offers to pay $1.44 C per US dollar.
The wholesale bank rate that day was more like $1.55 C for $1.00 US.
So it pays to know the rate of exchange.

You can track rates on the web easily.
Yahoo has a financial subdivision, and one for currency under that. I just checked and the rate was .631 US for 1 Canadian dollar, or conversely, taking the reciprocal, it is $1.585 C for $1.00 US.

But watch out for those drug store machines!!

And just because you do not see a separate line item saying "fee" or
"transaction charge" does not mean that someone has not manipulated the exchange rate to build a charge into the transaction.

One final comment, then I will let go of a subject I like to exchange information about, I always carry a little in traveler's checks just in case.
Some of them have flown the Atlantic twice with me. But every once in a while they come in handy.

One night in a little French cafe, La Petit Lapin, the waiter was all excited because he said my credit card did not work. My wife rose from the table to go get money at the bank ATM which was not far away. (We passed it going to the restaurant.) The waiter must have thought she was skipping out, and he became even more agitated. I pulled out a $100 check and laid it on the table so he could see it. That calmed him. At least he knew I had money.
Then I suddenly remembered I had brought my Master Card with me. I gave that to him, and it worked. (My wife never left the table. She was a little concerned over the state of agitation reached by our waiter.)
Why did the first card fail and the second one work? The only thing I can figure is that in some places the cards on the Cirrus net are the only ones that work. Visa is not Cirrus while Master Card is.

I ran into that problem once in the Canadian Rockies at Lake Louise Village and again at a motel complex called The Crossing.
The only ATM machine at both places was a franchise type of thing -- a drug store machine if you will. It was Cirrus only; I am Plus.

There is, however, NO such difficulty at regular bank ATMs. I drew out currency at banks in two small, fairly remote towns -- Fernie and Cardston -- with no difficulty whatsover.

 
Old Jul 31st, 2002, 06:55 PM
  #15  
L
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The exchange should be much better in a bank in Canada. You must shop around though since the rate changes quiete a bit from one bank to another.

Check the rates on the bank's website such as the Royal Bank's site www.royalbank.ca

ATM is not a good idea since they charge a fee to use it it adds up to the exchange rate.

Credit cards are usually your best bet (American Express seem to have the best rate).

But overall, the bank is the most generous. Border exchange bureau is the most expensive option (especially at airports)
 
Old Jul 31st, 2002, 07:14 PM
  #16  
Leslie
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I've got a question about those "drug store machines". I thought that if you used your debit card for a point of sale purchase (POS) that you automatically avoid any of those horrendous bank charges. For example, if I don't use my bank's own ATM, I am charged a $1 transaction fee by my bank, and a $1-2 transaction fee from the foreign bank's ATM -- its almost like double-dipping but the charge is from each bank.

When I buy something and use my debit card as a POS transaction and either just pay for the transaction or also get cash back, I am not charged any bank fees, as the transaction is considered a sale.

Bob, under your scenario, I would be charged for using my debit card in a store. Please explain, as I am so confused.

By the way, Capital One Visa cards do not incur that 1-2% surcharge that the other banks are charging for transactions outside of the US. Capital One, like MBNA only pass on the 1% fee that Visa charges, it doesn't pad the transaction.
 
Old Jul 31st, 2002, 07:20 PM
  #17  
Leslie
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One more question. If you use US $ in Canada, aren't the merchants offering a premium for you to spend your US $ versus spending Canadian dollars or even making credit card transactions (the merchant has to cough up 1-5% of the transaction to Visa, MasterCard, et al just to have the luxury of taking credit cards). I thought the Canadians liked US $.

Conversely, today I was in my bank and a young lady from Montreal came into exchange her CDN $ to US $. The bank manager said the bank does not make foreign currency transactions, but that she could use the ATM -- but she didn't have a debit card. I directed the young lady to the American Express Office about a block away, but its the only place I know that does exchanges, seems that only Fleet Bank will make foreign currency exchanges, with a huge service charge. Also, I ended up bumping into this young lady once more in a store, trying to buy something with her CDN $ -- the store keeper would not take her currency.
 
Old Jul 31st, 2002, 08:18 PM
  #18  
xxx
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Some confusion but here goes:

1. The rules of the shared teller networks supposedly prohibit foreign banks from surcharging use of an ATM to out of country ATM/debit cards. thus if you have a US issued ATM/debit card, your bank may charge you aything from $0 to $5 but the Canadian bank is not allowed to charge you.

2. POS sales are a new breed. There doesn't seem to be any consistancy. Sometimes you get nicked for a charge by your bank or by the merchant, sometimes you don't. Sometimes you can get cash back, sometimes you can't.

3. Credit cards are still the best way to go provided you are not stupid enough to use a credit card issued by a bank imposing the ridiculous quasi illegal 2% charge for "converting" foreign currencies when they have nothing to do with converting the currency. Ask any of the banks why they impose the 2% charge and you never get a truthful answer.
 
Old Jul 31st, 2002, 08:50 PM
  #19  
Bob Brown
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I was charged no additional fee in Canada to use my bank ATM card (not a check card, but a plain, ordinary ATM card). I looked at my bank statement very carefully and there was a separate line item listing for the transaction, but a 0 appeared beside each one.
I had fully expected to see $1.50 next to the 3rd one, but it was not there --at least not yet.

The point I keep trying to make is that if you don't know the official bank wholesale rate of exchange you don't know if you are being offered a good rate or a bad one. All of the merchant signs I saw in shop windows on my recent trip were offering to exchange for $1.44 C for $1 US. Not a good rate because the bank rate at the time was around $1.55 C for $1.00 US, depending on which day we are discussing.
Today, July 31, the C dollar is worth about 1.58 for $1.00 US.

Leslie may have a tremendous point about using debit cards. I honestly don't know if they avoid the 1% fee Visa charges or not, or the 1% I seemed to be paying for currency withdrawals.
It is a Visa debit card, so I figured I get socked 1% by Visa regardless. By charging, I do retain the option of disputing charges should they turn out to be in error.

I have been a little slow to use my debit card for that reason, and because my credit card earns frequent flier miles. I also prefer to have the right of review before I pay the bill. With a check card, the money goes out of my account very soon after I make the payment.

I do not know the situation in Europe when it comes to using check cards.

One other tip I have is to keep an eye on the pile of Canadian "metal" that can quickly accumulate in your pocket or coin purse. The Canadian loonies and twonies can add up a lot faster than quarters and dimes, US. (Anybody know the official spelling of loonie, or is it looney??) At any rate, I like having the two dollar coin. It comes in handy.
Now will someone please tell me why that view to the west of Moraine Lake disappeared off of the $20 bill?? I always thought that was a artistic defeat because on a scale of 1 to 10, Moraine lake looking west from the end of the lake is an 11. It and Lake Louise and Lake McArthur are three incredible views. And you can throw O'Hara from the Yukness Ledge in there, too.
 
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