Expert: Marc A. Schindler - 3/3/2002

Question
What's the best way to exchange US $ for CAD?  At home before leaving?  In Canada at a bank?  In Canada at an ATM?  By using only credit cards?  Some other way?
Thanks.

Answer
Judy, thanks for the question. In times past, when one dealt primarily in cash I would have said that converting to and from US funds into C$ would have been better in Canada, as a general rule. Most US banks are not international enough to have up-to-date exchange rates, and often you can't make your transaction on the spot anyway.

But times have changed and practically everything here is payable by plastic. It's been my experience that the cards like Visa, Master Charge and Amex (Discovery isn't widely known in Canada) are taken practically without question, and the exchange rate you see reflected on your monthly statement is not only fair, but it takes advantage of the bank's own inter-bank relations to get the narrowest "spread" (between buying and selling rates) possible. So I'd recommend plastic above all else by a long shot.  It's nice to have a little cash, and you'll find that many merchants accept US cash (although your change will be in C$) but not at the same rate a bank would give you.

In the case of a bit of folding money, I'd just wait until you get here and go into a main (downtown) branch and convert it on the spot. You'll get a better rate than in the U.S., almost without exception. You can even do this at suburban neighbourhood Canadian banks, but when going the other way (converting your US cash to Canadian, neighbourhood banks often have less of a selection - say, only $50 bills).  

Some other good places, which I've found fair, are agencies like Thomas Cook Travel. We have one within a few blocks of where I work, and I use them to obtain US cash. There are also kiosks set up at most airports, but I've found the exchange rate to be slightly worse than the downtown offices - but not by very much. And again, it depends. At major airports, like Vancouver, Calgary, Toronto and Montreal, the Thomas Cook (and their competitors) kiosks give you as good a rate as you'll get anywhere.

If you withdraw C$ from an ATM you'll be subject to the same exchange rate as with credit cards, so I've found them to be very fair, too. ATMs often charge non-customer users a fee, from C$1.00 to C$5.00, depending on the type of ATM. Finding one that displays the same network signs (ie. Cirrus) on the back of your own card will help keep these charges down.

In other words, there are a number of options open to you, and with the exception of paying merchants directly in US$, you'll find that most of these options give pretty fair rates.

Incidentally, this is somewhat different than the advice I'd give regarding going from Canada to Europe. There I've found it definitely better to get the foreign cash at Thomas Cooks before I leave, and selling the C$ at airport kiosks (Frankfurt, Amsterdam, Heathrow) before coming home. But even there we're only talking about a 2% spread or so.

Also, be aware that kiosks will charge a service rate, usually around $5.00, but they also give narrower spreads than the banks. The banks get their profit on the transaction from a slightly larger spread. One way or the other it will cost you a few bucks for the transaction. Moral of that story: convert as much as possible at a time, but in any case, try to stick to plastic.

Best regards,
Marc A. Schindler
Spruce Grove, Alberta , Canada - Gateway to the Boreal parkland