Canadian and U.S. Dollar Foreign Exchange Tips
Currency conversion can exist a large expense for Canadian snowbirds who spend a significant corporeality of time in the United states of america, depending on the current charge per unit of commutation.

Unless you have a big reserve of U.S. currency or an income stream in U.Due south. dollars, at some betoken y'all will inevitably have to convert your Canadian dollars to U.Due south. dollars to meet your living expenses, buy a vehicle or purchase a U.S. property.

While yous can't avert foreign commutation fees entirely, you can minimize foreign exchange costs significantly past agreement how they piece of work and following these tips, which can save you hundreds or even thousands of dollars every year.

Understand Foreign Commutation Fees and Costs

Essentially, at that place are two types of costs associated with exchanging currency -- the "Spread" and Fees:

The Foreign Commutation "Spread"

The deviation between what a bank or strange exchange service pays for a currency and what they charge you to buy information technology is often referred to as the "spread". You've probably noticed that the substitution rate y'all run into quoted in the news is always better than the rate you really receive when exchanging currency, usually past a few cents or more. This is because the commutation rates you see in the news are the Bank of Canada rates and the exchange rates you really receive are retail rates. The difference between these two amounts is the "spread", and is profit for the bank or strange commutation company.

While the strange exchange spread may vary from currency trader to currency trader and yous tin can get ameliorate rates by shopping around, there is no mode to entirely escape it, regardless of how or where you lot exchange currency.

Foreign Exchange "Fees"

Some strange commutation methods charge an additional fee on height of the spread that can significantly increasing your currency conversion cost. These fees can either accept the class of a flat transaction fee (i.due east. $5 per transaction) or a percent fee (i.e. ii.5% of the amount yous are converting). Using currency conversion methods that accuse a fee should exist avoided whenever possible, unless the additional fee is reasonable and provides you with extra convenience.

Who Does and Doesn't Charge Strange Exchange Fees

  • Banks and Currency Exchange Services usually practice not charge a foreign exchange fee, but brand sure to enquire first.
  • Foreign Exchange Kiosks sometimes charge a foreign commutation fee, but fifty-fifty if they don't, y'all should still avoid them, as they're usually located in remote locations or tourist areas and offer worse substitution rates.
  • Credit Cards commonly practice charge a per centum foreign exchange fee (ii% – iii%), only in that location are some notable exceptions. More on this later…
  • Canadian Debit Cards commonly don't charge a foreign commutation fee when you employ them in the U.S., but may sometimes, then exist certain to check first.
  • ATM Machines almost always charge a strange exchange fee if you use your Canadian debit card, usually a high one, and should exist avoided whenever possible unless you have a cross border banking service with a U.Southward. debit card.

Our Meridian Snowbird Foreign Exchange Tips

  1. Consider Cross Border Banking Solutions

    Some Canadian banks have started offering cross border banking solutions specifically tailored for Canadian snowbirds and travellers who spend a significant corporeality of time in the United States. While the price and type of services offered varies from banking concern to banking concern, they normally include a diverseness of banking, payment, credit card and strange substitution solutions.

    Cross border banking services can be affordable and convenient, just make certain you lot compare your options showtime to sympathise exactly what you're getting and the fees involved. Sometimes mixing and matching services from different financial institutions can save you more money than using an all-in-one solution.

    Learn More about Cantankerous Edge Banking Solutions

  2. Choose your Credit Cards Advisedly

    For Canadian snowbirds, using your regular Canadian credit carte du jour in the U.South. and other countries can be very expensive, and we recommend fugitive it whenever possible. Most Canadian credit cards have a foreign transaction "fee" in addition to the currency exchange spread, which could cease up costing you an extra 2.five% or more on every purchase you lot brand in any currency other than Canadian dollars!

    Fortunately, there are a few Canadian credit card options available that are platonic for snowbirds:

    Canadian Dollar No Foreign Transaction Fee Credit Cards

    No foreign transaction fee credit cards are a swell option for Canadian snowbirds, combining cost savings and convenience. They work just similar other Canadian credit cards, allowing you to make purchases in Canadian dollars (purchases are converted from U.S. dollars to Canadian dollars based on the strange exchange rate at the fourth dimension of buy). The only difference is that these cards don't accuse the additional foreign transaction fee of 2.5% or more than that about Canadian credit cards accuse.

    Another benefit of no foreign transaction fee credit cards is that they permit you lot to conveniently pay your credit card bill in Canadian dollars, just like you would pay any other credit card bill. This differs from U.S. dollar credit cards offered by Canadian banks, which require y'all to open a U.S. dollar bank account and transfer money into that account to pay your credit card bills.

    U.Due south. Dollar Credit Cards Issued by Canadian Banks

    U.S. dollar credit cards are another good payment selection for Canadian snowbirds. They allow you lot to avoid the ii.v% foreign transaction fee, just like credit cards with no foreign transaction fees. However, purchases made with these credit cards are in U.S. dollars, as are your credit card bills, so yous'll need a U.S. dollar depository financial institution account to pay your bills.

    U.S. dollar credit cards are great if you lot already have a large amount of U.S. currency, as you lot won't have to catechumen funds to pay your credit card nib. If you lot do need to commutation Canadian dollars to pay your bill, you'll accept the flexibility of choosing when to convert, which may let you to take advantage of more favourable exchange rates if yous time things correct.

  3. For Large Transactions, Wait for Alternatives to Banks

    If you're making a large transaction, such as purchasing U.S. real manor or a vehicle in the Us, or are exchanging significant sums of currency every few weeks to alive on while wintering outside Canada, you lot should explore using a bazaar currency exchange service that specialize in larger foreign exchange transactions.

    Because these boutique foreign exchange companies focus exclusively on larger transaction and take low overhead, they are frequently able to provide exchange rates that are significantly better than the banks, which can mean savings of hundreds or fifty-fifty thousands of dollars annually. Just make certain you practise your homework kickoff to ensure any visitor you lot are considering using is reputable and legitimate.

  4. Avoid ATMs

    Merely put, ATMs are normally the worst for way to for Canadians to convert their money to U.S. dollars. While there are some exceptions, ATM substitution rates are often worse than what you can observe elsewhere and there is almost e'er a large additional fee involved. Using ATMs to exchange your currency should be avoided whenever possible, unless y'all have a U.Due south. dollar debit carte.

  5. Convenience Still Counts

    While finding the best currency substitution rate is important, convenience is likewise a big factor for Canadian snowbirds who spend a large corporeality of time outside Canada and need to exchanging currency on a regular basis.

    It'south important to balance price and convenience when deciding which currency exchange services to utilise, Sometimes, a more convenient solution that saves you time and makes your life easier but has a slightly higher fee may exist more desirable that merely choosing the lowest cost foreign exchange option.