best way to pay

[josmo]

I have already put down my deposit with disney by putting it on my Bmo mastercard. I am sure I read somewhere that to charge american funds the credit card company charge will be over and above the exchange rate. Is this true? Does this still happen if i pay my credit card in full? and if so what is the best way to pay my remaining balance so I will not pay anymore than I really have to? thanks

 

[jtdl]

There is no way to get away from the conversion fee on a Canadian credit card - it is a fee the bank charges to convert the funds to Canadian funds. My bank has a no fee US Visa card and therefore no conversion is done or charged when I use it to purchase things in US$. I also have a no fee US bank acc't and so I keep funds in it to pay off my credit card. Before I had this US card I purchased US money orders - no conversion fee, just the straight exchange rate.

 

[Sue M]

I pay by my Visa, because it has travel insur. on it, incl trip cancellation/interuption. Yes they do charge a small conversion fee, the same I think as you would pay at a bank to exchange CAD to USD. Whenever you buy another currency, the bank charges a conversion fee.

 

[Alderbrook]

My BMO mastercard charges 2.5% for conversion. There really is no way around it unless you have a US credit card & a US bank account. We always just put it on our mastercard & pay the fee.

 

[grantclaire]

I believe there is extra fee when using a credit card, maybe 2% more then exchanging at the bank. The banks have taken some heat over this fee including a class action suit that is still before the courts. I use my TD travel card to book trips for the travel insurance,medical and points that I can earn.

 

[Brandilovesdisney]

There is no way to get away from the conversion fee on a Canadian credit card - it is a fee the bank charges to convert the funds to Canadian funds. My bank has a no fee US Visa card and therefore no conversion is done or charged when I use it to purchase things in US$. I also have a no fee US bank acc't and so I keep funds in it to pay off my credit card. Before I had this US card I purchased US money orders - no conversion fee, just the straight exchange rate.

If I may ask, which bank are you with? Every bank I have looked at has an annual fee plus transacation fees, which basically equals out to the 1.8% - 2.5% exchange fee I would pay with a Canadian credit card.

 

[josmo]

so if I am understanding this correctly there is no difference between using my creditcard and going to the bank and exchanging canadian cash to american cash. Both are going to cost me a conversion charge of 2-2.5 percent so may as well use the creditcard and earn air miles? thanks for the replies

 

[grantclaire]

I think the credit cards cost an extra 2% on top of the exchange rate? At least from my calculations. It is very confusing.

 

[GrtWtNorth]

I found that using a credit card cost the same exchange rate as what it would cost to purchase US travelers cheques. The only way we can get around it is to get a preferred exchange rate -- my wife is employed by a major bank, and we sometimes do this. However, we're terrible at estimating how much we need and it seems like a waste to return with a few hundred extra $US. By going the credit card route, we pay a bit more in fees, but spend only what we need.

FYI, check your credit card agreements for the fee structure. Mine is 2.5%, but this rate can vary significantly between different companies.

 

[Alderbrook]

I think the credit cards cost an extra 2% on top of the exchange rate? At least from my calculations. It is very confusing.

My BMO Mastercard charges 2.5% so if the exchange rate is 95 cents on the day I make a US purchase for example, it would say on my statement I was charged 92.5 cents (I think they use about 5 decimal points though so ie 0.92564).

I'm not sure how much banks change but I think it's similar.

 

[Brandilovesdisney]

From what I have read - a credit card company charges anywhere from 1.8-3% on top of the daily exchange rate.
A bank will charge anywhere from 2-4% over the daily exchange rate as a fee (as is stated on the Bank of Canada website).
For example - today the market exchange rate is around .09628 (so far) but my bank is around .94 - the 2% discrepency covers all fees and any changes in the exchange rate throughout the day.
If you are buying traveller's cheques, you may get them for free if it is part of your bankcard/creditcard agreement. Otherwise you will pay a fee. My bank charges 1% (so $1000 would cost me $10) - if I had a platinum Visa card the travellers cheques would be free.
I checked out the BMO and their US accounts, and found that unless I have a minimum of $1000 US in my account at all times then I would have to pay a monthly fee ($4-$14/month for so many transacations) and $25 per year for the US Mastercard with BMO. Many BMO, TD, RBC customers stated that when the exchange rate was good they would transfer money from their Canadian accounts to their US accounts and then pay their US Mastercard or Visa, but that "good rate" is still a bank rate (market plus 1-2% for fees) - maybe they get a better rate than me but it's still not market rate (banks do nothing for free!). For occasional border travellers like myself, the math just doesn't work.
Personally, I will probably buy the travellers cheques for the following reasons....
1. They can be used throughout the parks or cashed in at a Disney resort
2. I will always know exactly how much money I have to spend (you can easily lose track when everything is being charged to a card)
3. I won't have to worry about the fluctuating market (when you use your ATM or Credit card everyday the exchange rate changes in accordance with the market) and every time you use your cards there are the fees to consider
4. If I am going somewhere on or off property that I am uncertain will take my Canadian debit or credit card (like some gas stations), I will just cash in a couple of traveller's cheques at the front desk before I leave.
Just my 2 cents Please correct me if I have gotten anything wrong

 

[Brandilovesdisney]

Also, if you are someone like me who doesn't feel comfortable carrying around alot of cash (you always need some for tips and small kiosks) or taking up time in a store line up to sign traveller's cheques, you can always cash in a few and put them on your room key (if you are staying at a Disney resort).

 

[livvylivvie]

Great info! thanks everyone!

 

[Alderbrook]

I have a US account with CIBC which is no fee & no minimum. Mine has never had cash in it since I opened it 7 months ago.

 

[Brandilovesdisney]

I went to CIBC website and the CIBC US$ Personal Account has the following transaction fees:
"$0.75 U.S. for in-branch withdrawals, pre-authorized payments, cheques* or withdrawals at CIBC U.S.$ bank machines."
Can you think of any reason that you wouldn't have to pay transaction fees?
(I'm always looking for a cheaper way of exchanging money

 

[Alderbrook]

I went to CIBC website and the CIBC US$ Personal Account has the following transaction fees:
"$0.75 U.S. for in-branch withdrawals, pre-authorized payments, cheques* or withdrawals at CIBC U.S.$ bank machines."
Can you think of any reason that you wouldn't have to pay transaction fees?
(I'm always looking for a cheaper way of exchanging money

It's still going to cost you the exchange rate to put the $$$ in the account, but 75 cents isn't that much to make a withdrawal, especially if you don't make a lot of withdrawals. A lot of people exchange $$$ when the dollar is good & then if the dollar drops you have US money sitting there. A lot of US accounts (like BMO) charge you monthly fees just to have the account where CIBC doesn't.

There really isn't a way to beat the exchange rate or transaction fees, unless you work at a bank or know someone who does. My DH's aunt works for a bank & has exchanged $$$ for us before, but she still pays for it, just less than the public does.

 

[RC Fan]

I checked out the BMO and their US accounts, and found that unless I have a minimum of $1000 US in my account at all times then I would have to pay a monthly fee ($4-$14/month for so many transacations) and $25 per year for the US Mastercard with BMO. )

I believe the BMO US account is 'no fee' as long as you have the minimum balance in the primary account. The annual fee for the credit card is waived as long as you have purchased over $1000 US a year.

 

[Sue M]

I found that using a credit card cost the same exchange rate as what it would cost to purchase US travelers cheques. The only way we can get around it is to get a preferred exchange rate -- my wife is employed by a major bank, and we sometimes do this. However, we're terrible at estimating how much we need and it seems like a waste to return with a few hundred extra $US. By going the credit card route, we pay a bit more in fees, but spend only what we need.

FYI, check your credit card agreements for the fee structure. Mine is 2.5%, but this rate can vary significantly between different companies.

That's why I have a USD acct. Any left over USD goes back into it.

 

[Sue M]

My thought is when buying air fares, packages ,etc. I pay with Visa (and eat the exchange charges), because it offers protection if things go wrong- remember the collapse of some airlines, with people stranded? Or tour companies? The people who paid by cash/money order/checks were out of luck.
With Visa you have protection. That alone is worth any extra service charges.

 

[Ted in Halifax]

.... because it offers protection if things go wrong- remember the collapse of some airlines, with people stranded? Or tour companies? .... With Visa you have protection. That alone is worth any extra service charges.

Very good point