# Buying Cash for a trip to the US



## fifi (Apr 3, 2009)

Does anyone have any thoughts or tips as to the best way to exchange CAD for USD, so I have some cash for a trip to the US? The trip is about a month away, so I don't need it overnight, if that's an issue.
As I call my credit card companies to tell them I'll be out of town, and ask about their forex charges, they seem to charge incredibly high % for exchanges (2.25% for all non-CAD charges on MBNA SmartCash, for example)...

Any leads or experiences would be of help!

fifi


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## FrugalTrader (Oct 13, 2008)

I wrote about currency exchange options in the past. Personally, I think using a credit card is a decent deal for infrequent travellers.


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## brad (May 22, 2009)

Another thing to consider is that most ATMs in the US will work with your Canadian bank debit card, so you can withdraw US cash from an ATM while you're in the US. You may not get a great exchange rate and there's always a small fee involved (usually around $2 or $3), but it's very convenient.


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## the-royal-mail (Dec 11, 2009)

I simply go to the bank in the months leading up to my trip and purchase the cash that way. I always request small bills, predominatly $1 and $5 notes, nothing more than $10 note. Otherwise if you ask for $100 they give you five twenties.

Smaller value notes are more convenient when buying lunch, paying back your buddy the $2 you owe him, vending machines etc. Too often I've ended up in situations in the past, like group lunches for example, where everyone there is paying with debit cards or $20 bills. Huge lineup at the cash while 15 people enter a PIN number on the one debit terminal or they have to make change for an over abundance of $20s. By carrying small bills you can alleviate these sorts of situations for yourself and those around you.

Buy the cash you need plus more (don't scrimp) at your local bank. Simple.


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## fifi (Apr 3, 2009)

FrugalTrader said:


> I wrote about currency exchange options in the past. Personally, I think using a credit card is a decent deal for infrequent travellers.


Thanks for the lead back to your site; read the posts and some very good rationale/info came from it..We'll use the CC for the trip, then, but needing some cash for incidentals (read: wifey happiness investments), get a bit of cash from a bank here...


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## humble_pie (Jun 7, 2009)

usually a large online discounter will have the best rate. As i recall it's around 1.90%.

here's a way to raise US dollars with zero exchange fee, but there are a lot of IFs.

IF you have an online brokerage account and IF you hold an interlisted security, say something like td bank, or royal, or bmo, or barrick, and IF you think these have flipped up to recent highs that they are not going to sustain, and IF your taxation circumstances permit you to take a capital gain now ... wow that's a lot of IFs ... you could transfer your canadian shares to the US side of your account and sell them there, in the US account.

and just like that, US dollars. No exchange fees. Rabbit out of the magician's hat.


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## Dr_V (Oct 27, 2009)

Aside: I'm writing this from my hotel in California, so it seemed like an apt post to respond to. I tend to travel reasonably often for work, but I don't really have much more magical insight which hasn't already been imparted in this thread.

*For business travel*:

When I travel to the US on business, I usually take very little cash -- as in, typically about $100 USD per week of stay. For this amount, the differences in exchange rates that you'll get from one company to another have a pretty small impact on the final outcome.

Because most of my expenses are covered, I typically charge everything possible to my credit card -- this way, if I lose a receipt, I can still provide my employer with my credit card statement to get reimbursed. My credit card takes a commission on the USD$ => CAD$ conversion which tends to be larger than what I could get for a cash conversion at a bank. Thus, if I'm buying something that I can't expense, I'll usually pay for it in cash.


*For personal travel*:

I carry a bit more cash (usually $200 per week if I'm alone, or a bit more for two people). This still isn't a lot; but, I don't like to carry too much cash because if I happen to get mugged or I lose my wallet, it's generally gone forever. 

That said, I still don't like the conversion rates on my credit card, but I usually suck it up. I tend to be pretty thrifty, however, so I generally watch what I spend money on and don't really pay for stuff that's any more fancy than what I would have done if I were at home.


K.


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## scomac (Aug 22, 2009)

humble_pie said:


> here's a way to raise US dollars with zero exchange fee, but there are a lot of IFs.
> 
> <snip>
> 
> and just like that, US dollars. No exchange fees. Rabbit out of the magician's hat.


This is how I have done my conversions to USD for the past number of years. It's really only worthwhile if you plan on converting $10K minimum. What I have done is incorporated a cash conversion along with an intended USD stock purchase and then moved the balance of USD into a savings account. I also sweep my USD dividends into that same savings account for an on-going supply of US cash for travel purposes.


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## Jon202 (Apr 14, 2009)

I opened a free checking account with Harris Bank online which is open to Canadians. Initially had to deposit $100 which came off my Canadian credit card. I was called next day.
That took a week. Got free checks and a Visa Bank card. That covers all possible transactions, debit or credit.

Then open a free XE.com account to transfer from any Canadian bank account to your Harris account. XE conversion rates are the unbeateable for small amounts. I transfer over $50-60 every so often to spread the exchange rate.

Then I just bring my Harris Bank card with me to the U.S. and use it like a debit/credit card. Bigger retailers like Sears, grocery stores, etc... offer free cash bank and take out cash that way.

Before all that, I went to an independent currency exchange house which had the best rates in the city (Ottawa). Using a canadian credit card is acceptable for small amounts, but they really offer terrible rates.


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## yupislyr (Nov 16, 2009)

You can also make withdrawals fee free from BMO machines as a Harris Bank customer since Harris Bank is owned by BMO.


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## Jon202 (Apr 14, 2009)

yupislyr said:


> You can also make withdrawals fee free from BMO machines as a Harris Bank customer since Harris Bank is owned by BMO.


Yes.. And same for TD and TD Bank north I believe, and Royal and RBC bank US.

Scotiabank you can withdraw from any BoA ATM, or others internationally:
http://scotiabank.com/cda/content/0,1608,CID8040_LIDen,00.html

The only question with the above is what exchange rate is used.


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## dizzylizzy (Jan 11, 2010)

A couple of months ago I bouoght some US travellers' checks (Amex) for $2000 because i thought in case our money goes south again, i will also be able to follow .
The amazing perk was that for buying that amount as a minimum I got another traveller's check for $25Cdn for free! this was at CAA. Now, that's what I call getting a good return on my money. True, it is sitting somewhere, not getting interest, but, what the hey...1% is not interest. It's not even keeping up with inflation.


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## uluwatu (Dec 9, 2009)

humble_pie said:


> you could transfer your canadian shares to the US side of your account and sell them there, in the US account.
> 
> and just like that, US dollars. No exchange fees. Rabbit out of the magician's hat.


HP, what exchange ratio is used for the Canadian-to-US share transfer? Is it 1:1? Or is it USD share price : CAD share price? Or some other ratio?


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## humble_pie (Jun 7, 2009)

ulu i'm not sure i quite understand your question, so sorry.

if you compare interlisted prices of heavily-traded securities like rim/rimm, or pot/pot, you'll see that the prices follow each other closely after allowing for an almost-invisible tiny deviation from the wholesale or spot price for CAD/USD.

as small retail investors we cannot get anywhere near that spot price when we request our brokers or our banks to exchange currency for us. In fact, paying close to 2% or more for a one-way trip is extremely expensive, imho.

now to put the story another way, one could say that the arbs keep picking the interlisted market so clean, and they are trading so close to the currency spot price, that we as small retails can benefit by riding briefly on their coattails. Essentially, by buying in one currency & selling in the other.

one can use existing shares & conduct the sell side in the alternate market if one is happy with the tax consequences (this will be a taxable disposition.) Or one can start out cold turkey by buying a new position in one currency & immediately selling same number of shares in the other currency. This will, to best of my knowledge, present limited or no tax consequences, because if one does this right, one is not holding the stock long enough to have much of a gain or a loss.

there's another CMF thread going on right now with much more information, including a link to another website where others have boldly gone where no man ever went before etc. This thread is under Investing as Buying/Selling US$.


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## fifi (Apr 3, 2009)

When credit cards say they charge a 2.5% premium on foreign transactions (USD in my upcoming case), does that mean that they charge a 2.5% premium on the actual MARKET exchange rate on the day the transaction is made, OR does that mean that they set some arbitrary exchange rate, THEN charge 2.5% premium on top of that? 

I guess I'm looking to find out what the base exchange rate for CC's is, and if it is still somewhat arbitrary...Banks, for example, seem to use the current international/market exchange rate, then the 2.5% premium (or whatever that bank's premium is)--is it the same system for credit cards?
Thanks!


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## uluwatu (Dec 9, 2009)

humble_pie said:


> ulu i'm not sure i quite understand your question, so sorry.


I found the other thread, thanks for the heads up. The answer to my question is that the ratio is 1:1 (but really there is no ratio at all since you can only sell the shares on one exchange, they are not "converted" from Cdn shares to US shares as was my misguided assumption).

Thanks HP.


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## mogul777 (Jun 2, 2009)

fifi said:


> When credit cards say they charge a 2.5% premium on foreign transactions (USD in my upcoming case), does that mean that they charge a 2.5% premium on the actual MARKET exchange rate on the day the transaction is made, OR does that mean that they set some arbitrary exchange rate, THEN charge 2.5% premium on top of that?
> 
> I guess I'm looking to find out what the base exchange rate for CC's is, and if it is still somewhat arbitrary...Banks, for example, seem to use the current international/market exchange rate, then the 2.5% premium (or whatever that bank's premium is)--is it the same system for credit cards?
> Thanks!


Yes...


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## Andy Change (Sep 23, 2014)

*have you heard about this company?*

I found out one interesting company - Kantor Currency Exchange - http://www.kantor.ca/in_32, maybe somebody can tell me more about it? Have you changed there money? Don't know if it's ok to put here links.:biggrin::biggrin:


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