It’s a slow day at work some I spent part (most) of my morning (day) researching foreign exchange costs. There have been plenty of posts on the topic over the years but as I go through them, most are from an American perspective, and while Canadians and Americans can agree on a lot of travel topics, our bank systems can be very different. So, here’s what I’ve learned this morning from a Canadian perspective;
Financially, the best deal is to convert your money at home and bring cash. My bank; RBC does not charge me fees. Most branches can provide $US on the spot, Euros and Pounds take 3-5 days with some exceptions in major centres like my hometown of Calgary where the downtown branch has the cash on hand.
Using an ATM on the ‘Plus’ network in the US can cost a Canadian $5 per transaction plus whatever foreign exchange rate the bank owning the ATM charges. My account comes with 5 free transactions and then $5/per. BUT....
I cannot use an RBC debit card to make a point of sale transaction anywhere in the world outside of Canada and the US. I called the bank to speak to a 2nd person and asked that my call be routed up the chain of command just to make sure, and it was confirmed. No point of sales transactions, ATM use only.
Credit cards. Mastercard charges 2.5% plus the current exchange rate. Visa is the same but Visa and MC calculate the foreign exchange rates differently and so MC was about ¼% cheaper.
I already knew this, but if your credit or debit card is 5 digits or more, you need to change it to 4. Easy to do right at your home ATM. If you change the pin on one, all your cards related to your bank will automatically change. For added security I typically change mine back to 5 digits when I get home.
Be careful of using Tap on your credit card. It may not give you the option to pay in Euros and will happily convert it to Canadian funds for you.
Finding a no foreign transaction fee card in Canada is tough. Very few have no annual fee. I was looking at one that charges $136/year but based on the cost I’d need to spend $5500/year outside of Canada to break even on the 2.5% cost. If it does offer no foreign exchange fees, read the fine print to see if they make it up in different ways like charging you higher exchange rates.
Don’t assume the insurance coverage on your credit card. This is likely a shared trait in both countries. I had always assumed my card covered all possible car rental coverages. Not so, just CDW. No Comprehensive or Liability.
Don’t assume your credit card covers you at all. I have an American Express that used to cover car rentals. But when I called this morning to get an explanation of my coverage, I was told it no longer covers anything. Luckily, it’s only a backup card and I rarely use it. I would highly recommend you call the bank before each trip to make sure coverage has not changed.
My conclusion, except for paying closer attention to car rental coverage, I’m not going to change my habits much. I usually bring about $1000 cash from home that’s split between me and my wife and kept in a money belts and a hotel room safe. I’ve never used overseas ATM’s before but will try it next year on our next European adventure. Credit Card use may increase a bit-it’s hard to say, but I’m not going to sweat the 2.5% fee. If I charge $2000 on a trip to hotels and car then I’m out an extra $50, I guess I’ll just work an extra day before I retire to make make my lost fees back.
Would love to hear Canadian/American and European feedback on the differences to what I’ve learned today.