cash, travelers cheques or bank card?

[Maddysdaddy]

We pay $30/year to have our US dollar Visa as our secondary card thru RBC. The 2.5% conversion rate on the $1000 you are taking is $25, so it's a wash there, but for those who spend more (hard not to, by the time you pay for hotels, food and rental cars), it's worth it (plus we earn Avion points on our purchases, so that's a 1-2% rebate there.

Personally, I only carry minimal cash to pay for things like valets and porters - not comfortable carrying around more than that for fear of misplacing my wallet.

By the way, for the poster who commented on gas purchases, you can go in to the teller and pre-pay a set amount on your Visa, since you can't pay at the pump. If you go under, you just walk back in and they refund the difference back to your card. I prefer to underestimate and then just top up the balance in cash.

 

[bankr63]

By the way, for the poster who commented on gas purchases, you can go in to the teller and pre-pay a set amount on your Visa, since you can't pay at the pump. If you go under, you just walk back in and they refund the difference back to your card. I prefer to underestimate and then just top up the balance in cash.

That's a good idea too, if they won't let you wait with the card like we do. The only real disadvantage to using C$ CC's in the US is if you do the overpay and refund thing with a card like many do at the gas stations is that you get dinged with the second half of the conversion rate when they refund the difference back onto your card.

 

[Maddysdaddy]

That's a good idea too, if they won't let you wait with the card like we do. The only real disadvantage to using C$ CC's in the US is if you do the overpay and refund thing with a card like many do at the gas stations is that you get dinged with the second half of the conversion rate when they refund the difference back onto your card.

Agreed that this only makes sense if you have a US dollar card - if all you have is a Cdn dollar card, I would go with the underpay and top up with cash procedure.

 

[minnie mum]

Agreed that this only makes sense if you have a US dollar card - if all you have is a Cdn dollar card, I would go with the underpay and top up with cash procedure.

Or do what DH does. Slap down $40 cash on the counter, tell them to hold it and also tell them that when you come back inside you'll be paying with your CC. Most are happy to do this.

 

[Maddysdaddy]

Or do what DH does. Slap down $40 cash on the counter, tell them to hold it and also tell them that when you come back inside you'll be paying with your CC. Most are happy to do this.

As long as you trust that they won't say "$40? What $40? You never gave me $40!!!!" (wow - being a lawyer has made me way too cynical...)

 

[minnie mum]

I know, right? But we've so far (3 trips to WDW by car) never had a problem with this. DH says since most places have cc camera security monitoring 24/7 that they wouldn't dare try it. So far they haven't.

 

[Northstar]

Check with your bank. They do exactly the same thing when you exchange at the counter. You do not get the current Bank of Canada exchange rate. You get that rate plus 2.5%. Easiest way to tell; ask them what you would get if you exchanged C$100, and then what you would get if you converted the US$ back. There will be about a 5% spread (you'll end up with C$95.00). I did a quick scan of the major banks on the web. For those who post their current exchange rate, they were all doing it!

(Ex: TD exchange calculator 7/26/12 C$100.00 = US$96.53 then US$96.53 = C$95.00 that's 2.5% fee on each exchange for a total of 5%)
(BMO is a bit better, their posted exchange rates yield a total of $4% spread, although they charge more for sell than buy, so TD is a better deal today if you are buying US) (RBC Spread is at 5.25% today on cash).

You're right, of course... we can't get the bank rate because we're not a bank, right?

I said it wrong. The 2.5% is not added to the bank rate, but to a different rate that is more like what you'd get if you converted money.

Here's what my RBC credit card agreement says about how they convert foreign currency purchases to Canadian dollars:

"...at our exchange rate which is 2.5% over a benchmark rate set by the payment card network..."

In other words, we'll charge you 2.5% more than what Visa says the rate for the day is!

 

[bankr63]

In other words, we'll charge you 2.5% more than what Visa says the rate for the day is!

Which anytime I have checked is the Bank of Canada noon rate for that date. I watched pretty closely on our last trip because our dollar was above parity the whole time, but sometimes my rate was positive, sometimes negative. When I checked it against the BOC site, they were always charging me that day's rate plus 2.5%. It was just that our dollar was hovering around the 2-3 cent positive area.

As a former bank employee myself, I know that the banks will ALWAYS make their profit (and a lot of it); my point here is that many people think that using a credit card is a worse deal because of the 2.5%, but it is EXACTLY the same as getting cash at the bank counter, both of which are better than using a debit card where you get charged both the bank exchange AND (often) a network transaction fee.

FWIW, I have a bank account that offers "free" travellers cheques too. But, oh wait, I pay a really high monthly fee for that account to get those "free" cheques, and they STILL charge me the exchange.

 

[Northstar]

Which anytime I have checked is the Bank of Canada noon rate for that date. I watched pretty closely on our last trip because our dollar was above parity the whole time, but sometimes my rate was positive, sometimes negative. When I checked it against the BOC site, they were always charging me that day's rate plus 2.5%. It was just that our dollar was hovering around the 2-3 cent positive area.

As a former bank employee myself, I know that the banks will ALWAYS make their profit (and a lot of it); my point here is that many people think that using a credit card is a worse deal because of the 2.5%, but it is EXACTLY the same as getting cash at the bank counter, both of which are better than using a debit card where you get charged both the bank exchange AND (often) a network transaction fee.

FWIW, I have a bank account that offers "free" travellers cheques too. But, oh wait, I pay a really high monthly fee for that account to get those "free" cheques, and they STILL charge me the exchange.

Right again, of course. Especially the part about how the banks will always make their profit!

But you reminded me of something I think OP needs to consider...OP, it sounds as if you have a US$ banking account that you plan to withdraw cash from before you go. You need to know that you can't access that account from an ATM in the U.S.

I know, that makes ABSOLUTELY NO SENSE that you can use an ATM to access your Canadian dollar bank account in the U.S., but you can't access your US$ account. But that is the way it works. Bankr63 can probably explain why.

 

[engo]

I usually bring some US cash and put everything else on my BMO USD credit card. I have a USD account and would pay off the credit card balance after we come back. BMO used to have a fee free USD credit card but started charging annual fee of $25(?) several years ago. However, I was told that as long as your annual minimum spend is over $200, BMO would waive their $25 annual fee. So far I've not been charged for any annual fee since I got the card 5 years ago.

 

[Paulakoala]

I have a Canadian chequing account and a US dollar account at RBC. I waffled over how to take our cash for our recent DL trip and what I ended up doing was signing up with RBC Bank (based in Georgia) in the USA. They are an online-only bank associated with PC Bank in FL and associated with RBC in Canada. It took about half an hour on the phone to set it up and about two weeks for the card to get to me. It's a US debit card with the Visa logo on it.

I could log on at any time and transfer cash from either my Canadian RBC chequing account or my USD savings account and had instant access to use the money via the RBC US card. We used it for all gas (we drove from Alberta to Anaheim), some restaurant purchases and one character breakfast.

We were a little hesitant to trust all our cash to it in case there was holds or anything happened so I only transferred money as e needed it but we were pleasantly surprised. We will be keeping the card open and will be using it for our WDW trip in 2014.

 

[madmaxx]

We've always just used our RBC Gold Visa (no fee points card), and received the counter rate for exchange. We also take a bit of cash for tipping and the food carts (is just faster), and usually the kids bring their spending budget in cash (as it's easier for them to plan out).

Generally, consumers only get the counter rate for exchange from their banks around here, except for special accounts and larger transfers (which get a discount, but never market rate). I've heard that some credit cards charge more than this rate, and others charge a premium ... but I've never seen this from any of our banks in Canada. We live 10 minutes from the border, and spend a lot of time in WA as we have friends there (and it's lovely). We stay away from using ATMs (the charges are much more than 2.5%, often closer to $2-3 per transaction ... which can be 20-30%!), but our Visa and Amex cards have never cost us extra.

For my business, we use a specialized trading company to get a better rate (often a point or two over the market rate), but this requires large trades, and someone to manage it. With our volume, it pays for itself (especially when our dollar is happy).

I don't think it's worth using a US bank account unless you plan to convert enough funds to get a better rate ($5,000 might be enough to make it worth it), as the savings is really not worth the time, depending how you value your time. Just my CAD$.02 though ...

 

[Maddysdaddy]

We've always just used our RBC Gold Visa (no fee points card), and received the counter rate for exchange. We also take a bit of cash for tipping and the food carts (is just faster), and usually the kids bring their spending budget in cash (as it's easier for them to plan out).

Generally, consumers only get the counter rate for exchange from their banks around here, except for special accounts and larger transfers (which get a discount, but never market rate). I've heard that some credit cards charge more than this rate, and others charge a premium ... but I've never seen this from any of our banks in Canada. We live 10 minutes from the border, and spend a lot of time in WA as we have friends there (and it's lovely). We stay away from using ATMs (the charges are much more than 2.5%, often closer to $2-3 per transaction ... which can be 20-30%!), but our Visa and Amex cards have never cost us extra.

For my business, we use a specialized trading company to get a better rate (often a point or two over the market rate), but this requires large trades, and someone to manage it. With our volume, it pays for itself (especially when our dollar is happy).

I don't think it's worth using a US bank account unless you plan to convert enough funds to get a better rate ($5,000 might be enough to make it worth it), as the savings is really not worth the time, depending how you value your time. Just my CAD$.02 though ...

The advantage for us of having a USD account (included as part of our RBC banking package) is that I have a place to park the USD I purchase every paycheque - it's safer than under my mattress and helps me hedge against crazy drops in the CDN dollar.

I guess a safe deposit box could do the same thing, but that means I'd actually have to set foot in a branch, which I probably only do once or twice a year.

 

[bankr63]

But you reminded me of something I think OP needs to consider...OP, it sounds as if you have a US$ banking account that you plan to withdraw cash from before you go. You need to know that you can't access that account from an ATM in the U.S.

I know, that makes ABSOLUTELY NO SENSE that you can use an ATM to access your Canadian dollar bank account in the U.S., but you can't access your US$ account. But that is the way it works. Bankr63 can probably explain why.

I kind of know why, but I didn't work for interac so this could be off a bit. The Canadian system has alot of information that can be accessed and shared between institutions for interchange, including a richness of account types. Now as soon as you pass over to a partner system in another country, the information shared between the two systems is much more limited. The two systems only share information on your main two accounts (checking and savings), and no other accounts can be seen. It used to be that they wouldn't even show the account balance in a foreign land, but that has changed (trying looking at your balance in Mexican Pesos for a quick thrill ). Back then the US payment terminal would ask if they could transfer $x amount and would get a simple yes or no back from Canada. I did once try to promote a different account to my main chequing (or checking) account, but the bank said it couldn't do it. The main intent of all this is to preserve the privacy of your banking information. You don't want it to be too easy for some hacker in some Liberian bank to find out all about your banking accounts!

Just my CAD$.02 though ...

We don't make those anymore, you'll need to convert at 2.5%...

And if the Americans drop the penny too, what is Disney going to do with all those penny rolling machines?

 

[Gina-Gina-Bo-Bina]

I thought that every canadian credit card put a 2 to 2.5 percent transaction fee on US purchases. I think they just hide it in the bank rate/ conversion to canadian dollars. The financial papers made a big deal 3 months ago that the new visa Amazon was the only one in Canada that did not do this and they were hoping more cards would follow soon. I am going to Europe next year and would love more cards not to charge this hidden fee.

We just got a notice in today's mail that our Sears Mastercard (by Chase Canada Financial) has discontinued the 2.5% fee on international purchases as of July 23, 2012.

Woohoo!