Best way to reduce exchange rate fees?

[rance]

I am wondering what is the best option to reduce exchange fees? Credit card seems to add 2.5 to 3% to exchange rate...is cash from the bank the best way or atm in the usa?

What do you usually do.

 

[sjsjbrook]

I just use my credit card. No matter where you exchange money you are looking at an exchange rate, You could get cash at a great rate, but them you have to make sure you are there on the right day and you have to carry it. I find the few $ I would save that a credit card just works better.

 

[Ted in Halifax]

All year long, whenever the exchange goes over .95 I buy a little US money and put it in my US dollar account. Some Pay weeks, it might be $40, others $200 ... all depends on how much money I have and the exchange rate. If it goes to .99 then I tend to buy more (i.e the $200 example).

I bring about $1,000 US to cover food and misc on a typical trip. All other costs are prepaid with Charge Card ... I also time my payments to Disney when the exchange in high.

Ted

 

[bankr63]

If you are buying Disney tickets in advance, don't forget to add the exchange fee and $ exchange to ticket prices coming from US vendors. Depending on our Dollar's value, it may be worth getting your tickets at the Disney Store in Canada. They sell tickets for face value so you pay C$100 for each US$100. That can be a substantial saving; only 2% today, but it was a big saving back when we were down by 25%. Don't remember if you pay P/G/HST on the tickets or not, it's been almost 2 years since I last bought tickets here...

I don't like travelling with lots of cash, but use both MC/Visa and Debit/ATM in the US. As I recall from my last trip, the ATM fees made it slightly more costly (by about 0.5%) to use the bank machines and debit cards taking withdrawals of $100-$200. Larger withdrawals would better the rate, but you are then stuck with a wad of cash. Some people suggest getting a cash advance on a purchase at WalMart; that will get around the ATM fees.

My one other cash tip - I keep a few $$ tucked into my passport so that I have money for tolls until I can get to a bank there. Of course with the FL moving over to all electronic tolling, that will no longer be a necessity (but I travel to other US states where I still need it).

M Ross

 

[snickerboo]

It depends on your cc or bank account. I am charged that day's rate on my debit card so I just use bank machines at secure locations. Usually, I use the WDW ATMs because I figure WDW is probably careful that no one's putting skimmers on their machines. I usually do at least $100/ $200 at a time to reduce fees, too. After all, I'm going to spend it if I'm at Disney! LOL Only once I brought travellers cheques and that was the year the market crashed with the exchange rate right before out trip. I locked in at 87 cents on the dollar and was darned glad when it went down to 75 cents! I like Ted's idea of keeping a US funds bank account. Never thought of doing that.

 

[Gigi22]

Old-fashioned, but we still use traveller's cheques.

If you are a CAA member, you can get no-fee traveller's cheques from the CAA. This service is no longer available in Ontario, but if you are near the Quebec border, you can get the traveller's cheques from a Quebec CAA.

Once we purchase US traveller's cheques, we don't convert them back to Canadian money. This gives us some enforced savings towards our next trip. With banks giving a pittance in interest rates these days, we feel that saving the bank charges to convert the traveller's cheques back to Canadian currency evens out--we are likely ahead on the deal.

We apply dollar-averaging to purchases of US currency. We usually purchase $50-$100 a month.

 

[RC Fan]

Do you have a US bank account? If so, sign up with ING. I buy my US from ING, and the rate is quite a bit better than the 'preferred' rate my bank offers. I then split my purchases between cash and my no-fee US Mastercard.

 

[Gigi22]

Good to know RC Fan! We used to have a US$ savings account at Desjardins Credit Union, but the fees we were charged simply wiped out any benefit to having an account at all, so we closed it. Can't say I am very impressed with Desjardins, they nickel and dime you to death.

 

[stefanospops]

Going to compare the ING rate to my TD rate. I have their "borderless" plan which gives me no charge annual fee on the US Visa (saves me $29) and I always get the staff rate on exchanges.

 

[squirrel]

I have a RBC US and a savings account. I transfer the Canadian money into the US one when our dollar is doing well.

I will go to the bank and take out some cash as everyone needs some on their trip. The rest will be charged to my Canadian Tire CC. I get $ back on that CC so I figure it's almost a wash with the extra % they charge.

 

[RC Fan]

Going to compare the ING rate to my TD rate. I have their "borderless" plan which gives me no charge annual fee on the US Visa (saves me $29) and I always get the staff rate on exchanges.

Can you let us know how the rates compare please?

 

[disneydreamgirl]

I'm doing the ING US account as well and it's worked out very favourably so far...the Canadian dollars are yielding a good bit of interest while I buy US accordingly. I'm just about to get a US$ credit card but am researching the best options. CIBC offers one for a $35 annual fee which I can pay out of a $0.75 per transaction US$ account. I'm able to transfer CAN$ to ING, buy at ING when favourable and then transfer to CIBC US$ account. It's been worthwhile and while it sounds complicated, it's really quite easy. Love to hear where people have their US$ credit card from and the associated fees.

Glad the dollar has been favourable lately!!

 

[RC Fan]

I use BMO. No fee US account, and no fee US Mastercard.

 

[stefanospops]

Can you let us know how the rates compare please?

They work out to be about the same. When I checked yesterday TD was better by 0.001. Today ING is better: 1.038 ING to 1.039 TD. So $100 US will cost you $103.80 CAN at ING and $103.90 at TD.

However, the rate I am quoting from TD is definitely real time and will fluctuate throughout the day. I am not certain how often ING's rate changes throughout the day. At the time of writing the rate shown at www.xe.com was $102.636. Based on that I figure TD is charging an extra 1.25% or so. Hopefully I didn't get my math wrong.

 

[RC Fan]

They work out to be about the same. When I checked yesterday TD was better by 0.001. Today ING is better: 1.038 ING to 1.039 TD. So $100 US will cost you $103.80 CAN at ING and $103.90 at TD.

However, the rate I am quoting from TD is definitely real time and will fluctuate throughout the day. I am not certain how often ING's rate changes throughout the day. At the time of writing the rate shown at www.xe.com was $102.636. Based on that I figure TD is charging an extra 1.25% or so. Hopefully I didn't get my math wrong.

Excellent! Thanks for the info!

 

[bankr63]

It depends on your cc or bank account. I am charged that day's rate on my debit card so I just use bank machines at secure locations.

Check carefully however. Your Bank's daily rate is likely a few points over Bank of Canada rates (i.e. they are taking a small fee). You can check your bank's rate against the noon rate posted on www.bankofcanada.ca

If your bank really does not charge an exchange fee (i.e. they match the noon rate), please let us know so we can switch! Last time I checked (my last trip), my TD was charging about 1% higher than the noon rates. With a couple of bucks in ATM fees per withdrawal, rates get pretty close to the Credit Card rates.

Taking a US dollar account doesn't generally save you anything on exchange; they still charge slightly inflated exchange rates on deposit, and unless you have a no fee ATM in the US, you will be charged to take it out down there while on vacation. A US dollar account does allow for dollar cost averaging (smoothes out the highs and lows over time). There is a sticky at the top of this forum for US accounts and credit cards that help with the strategies.

Happy Saving!

 

[RC Fan]

Taking a US dollar account doesn't generally save you anything on exchange; they still charge slightly inflated exchange rates on deposit, and unless you have a no fee ATM in the US, you will be charged to take it out down there while on vacation. A US dollar account does allow for dollar cost averaging (smoothes out the highs and lows over time).
Happy Saving!

I only use my US account as a means to access the money I have bought at ING. I have never used it at an ATM. I haven't been charged any fees thus far that I am aware of.

 

[stefanospops]

I disagree with a PP about "lack of" savings you on the exchange with a US acct versus just using your Canadian credit card.

It can cost 2.5% to 3.5% extra to use a Canadian credit card on the exchange of US Dollars. I used my CIBC Canadian dollar card on a transaction that I thought was in Canadian dollars (for my Magic Jack) on August 24 only to discover it was US funds. I paid 1.090648 CAN$ for every 1US$. The exchange rate for that day had a high of $1 US = $1.0557 CAN and a low of $1 US = $1.0665 CAN. So at 1.090648 I paid 3.2% on the high and 2.2% on the low, depending on what rate they used for the day. So on a Disney vacation that totals $3,000US that's $30 more I pay just using my Canadian cards. If you go to the US occasionally then it is not worth it, but we go four or five times a year.

So a US dollar account coupled with a US Dollar VISA gives me a better exchange rate for transferring my Canadian into US dollars and a credit card where I don't have to pay the higher credit card company exchange rates. The only place where I end up on a level playing field is if I need more cash while I am in the US. But since I don't care if I return with US dollars since they just go back into the bank account, then I am less concerned about how much I take with me, other than worrying if it gets stolen. But we don't take much cash anyways since we primarily use the US Dollar credit card.

 

[melbrujack]

Last year I was shopping in the states a couple of times. I did a lot of shopping on my CC. I did somereturns at Target and noticed that gave me a lower exchange rate back on the return, even though it was the same day.

This also happened when we cancelled our hotel before our trip. That one really hurt.

I'm not sure if this is normal or it just happened those few times.
mw

 

[rewok]

Last year I was shopping in the states a couple of times. I did a lot of shopping on my CC. I did somereturns at Target and noticed that gave me a lower exchange rate back on the return, even though it was the same day.

This also happened when we cancelled our hotel before our trip. That one really hurt.

I'm not sure if this is normal or it just happened those few times.
mw

I think you just had some bad luck. I've had it the other way once. i.e. got a bigger refund than what I originally paid for! Pretty nice... The rate fluctuates all the time, so even on the same day you can get 2 different rates.

Personally, I've tried the US bank account without a USD credit card, too much work and not enough gain for me! I charge max 5000$US a year, and the extra 1-1.5% (my card charges 2.5%) fee is less than 100$, which is about my rewards value for that amount. However, I always bring lots of cash, which I try to buy at the "right time".

I still think someone doing lots of US trips, or high expenses might benefit (like I could, just too lazy), but if you're going once a year for a budget trip, the value falls quickly.