Ultimate All-Inclusive Deal Finder
'How To Get The Best Deal' Guides
Ultimate Package Deal Finder

Sunday, July 21st 2019

"I'm a travel junkie who's hooked on deals from YUL." - Chris Myden


Tagged Pages Archive | Articles

2019
18
April
What is the best way to exchange money or pay for things in a different currency?

What is the best way to exchange money or pay for things in a different currency?

When you travel, you have many different options when it comes to exchanging money or paying for things in a different currency.

While there are many options, I can guarantee you one thing, any time you exchange money or pay for things in a different currency, *someone* is taking a minimum of 2.5% of every transaction from you as a foreign exchange fee.

They are taking this fee in at least one of two ways:

* an obvious fee that they tell you about upfront

and / or

* a hidden fee, by using an inflated exchange rate that is worse than today's 'real' exchange rate

Inflated exchange rates - the hidden fee

A lot of people aren't aware of the hidden fee. For example, if today's 'real' exchange rate between Canadian and U.S. dollars is 1.30, they are definitely charging you an inflated rate of 1.33 - and pocketing the 2.5% difference as a fee for themselves.

Unless you actually look at your receipt or credit card statement, and compare the exchange rate they used, against the 'real' exchange rate from a currency exchange site (like XE.com) - you will have no idea about this hidden fee.

And by *they* I mean every bank, currency exchange center, ATM machine, and credit card in the world. They all want their 2.5% fee from you.

It's potentially going to get even more expensive for Canadians. As of May 1st - TD became the first bank to increase this hidden fee from 2.5% to 3.5% for ATM withdrawals in other countries.

Increasing the foreign exchange fee for credit cards may be next. The other Canadian banks are watching TD to see if they should do the same.

Ways you can exchange money - from worst to best


Method Obvious Fee Inflated Exchange Rate
Airport exchange kiosk        
Your bank at home    
Good independent currency exchange place at home
ATM in a different country
Prepaid reloadable cards
Credit cards (99% of them)
'No foreign exchange fee'
credit cards (rare)
  NONE   NOPE


Yes, there is one way to avoid both the obvious fee *and* the inflated exchange rate - with a 'No Foreign Exchange Fee' credit card

'No foreign exchange fee' credit cards are cards that charge you today's real, uninflated exchange rate - and with no other fees, they are the only way to truly buy something in a different currency without paying one cent in fees (hidden or obvious), provided you pay your credit card bill on time.

Personally, my money strategy when going on a trip usually looks like this:

- exchange *some* currency at a good, independent currency exchange place at home. In Montreal, three places that I often see recommended as having the best rates are: Sharif Exchange in Saint-Laurent, Globex2000 on Greene Ave and Calforex on Rue Peel.

Note however, that if the country you're going to visit uses an exotic currency (anything beyond dollars or euros) - it may be better to wait until you get there. Exotic currencies can often be a rip-off to buy in Canada.

- while traveling, I pay for everything I possibly can with a 'no foreign exchange fee' credit card

- for everything else that absolutely requires cash as payment, I use the currency I exchanged at home. When that runs out, I withdraw some more from the ATM in the foreign country.

The key with ATM withdrawals is to find that balance, where you're making as few ATM withdrawals as possible, but without walking around with a ton of cash. I also need to time that final ATM withdrawal so I don't end up with too much foreign currency at the end of the trip.

So what are the best 'no foreign exchange fee' credit cards?

This type of credit card is very rare. Out of the hundreds of credit card options available to Canadians, only a handful use the true, uninflated exchange rate at the time of purchase.

And to top it off, a few of the more popular cards, such as the Home Trust Preferred Visa, are not available to residents of Quebec.

So it basically comes down to these 3 options...

The 3 best 'no foreign exchange fee' credit cards

Card My Thoughts
Rogers Platinum Mastercard

Rogers Platinum Mastercard

No annual fee, and 3% cashback on all purchases in a foreign currency, which effectively means it charges you the real exchange rate.

You also earn 1.25% cashback on all purchases in Canadian dollars.

There's also the Fido Mastercard, which is the exact same card, but the cash back applies to your Fido bill.

Apply now            Apply now

                (Français)                                       (English)

Rogers World
Elite Mastercard


Rogers World Elite Mastercard

This card is somewhat similar to the Rogers Platinum above, but it's actually even better.

It also has no annual fee, but offers 4% cash back on purchases made in a foreign currency, and 1.75% cash back on purchases made in Canadian dollars.

It also has a little bit of travel insurance (but not nearly as comprehensive as the Scotiabank Passport below).

But, to qualify for this card, you need to make $80k/year (or have $150k total household income). Although I have heard of people qualifying with less.

If you do meet the income requirements, it's a no-brainer to choose this card over the Rogers Platinum.

Apply now            Apply now

                (Français)                                       (English)

Scotiabank Passport Visa Infinite

Scotiabank Passport Visa Infinite

Charges the real exchange rate, and comes with perks such as 6 airport lounge passes per year, and all kinds of insurance coverage: travel medical, trip cancellation / interruption, delayed / lost baggage, and flight delay.

You can also earn Scotia Rewards points.

But, it has a $139 annual fee. To justify the annual fee, this card is the best option if you think you might have a decent level of transactions in foreign currencies, or value the included lounge passes, or the insurance.

3 lounge passes alone would typically cost more than the annual fee.

Currently, you can earn a bonus of 40,000 Scotia Rewards points after making $1000 worth of purchases in your first 3 months.
Apply now            Apply now

                (Français)                                       (English)



There are a few other 'no foreign exchange fee' credit cards available to Canadians, but I don't consider them as attractive as the 3 cards listed above. They are...

  • HSBC World Elite Mastercard
  • Brim Financial

  • Other tips for exchanging money or paying for things while traveling


    Is there any way to avoid paying high fees when making ATM withdrawals?

    All banks will charge the hidden fee (inflated exchange rate) but Tangerine / Scotiabank is the one bank that won't charge the additional obvious fee, if you withdraw from an ATM in the Global Alliance.

    ATMs in the Global Alliance include: Bank of America in the U.S., Scotiabank in Mexico, Caribbean, Central America or South America, and Deutsche Bank in Europe.

    You can find a complete list of ATMs in the Global Alliance here.

    What about withdrawing cash using my credit card?

    This is generally a bad idea. Most credit cards consider this a cash advance, and start charging you interest immediately.

    Yes, there are sometimes ways around the interest charge, by overpaying your credit card first, but this can still be a bad idea for other reasons, and you'll still be charged a cash advance fee.

    If the machine asks, choose to be charged in the currency of the country you're in

    When you're in another country, and the debit or credit machine asks if you would like to be charged in your home currency (Canadian dollars) - do *not* select this option.

    It may seem like a good idea, but what's really happening when you select that option is that the machine's provider is determining the exchange rate when calculating the amount you will be charged in $CAD.

    I guarantee that this will be an even more inflated exchange rate than the one that Visa or Mastercard uses.

    What you want to do is select the option to be charged in the currency of the country you're in, and let Visa or Mastercard use their typical 2.5% inflated exchange rate.

    Beware: I have heard that with some machines, if you use the tap method to pay, you may not even be asked, and it will automatically charge you in $CAD, with the terrible exchange rate.

    Is there a way to avoid foreign exchange fees when sending an international money transfer?

    You may want to look into TransferWise.

    They use the real exchange rate, without the hidden 2.5% markup. There is still an obvious fee (small percentage and fixed fee) but they are transparent about it.

    What currency should I bring to Cuba to convert to Cuban pesos ?

    Definitely Canadian. Definitely not $USD. The exchange rates are set by the government and should be the same everywhere.

    You can't buy Cuban Pesos outside of Cuba.

    What currency should I use in Mexico?

    Pesos are the best currency to use in Mexico. Not $USD. Convert some Canadian dollars to Pesos before you go, or when you get there.

    When using the ATMs in Mexico, choose the legitimate bank ATMs. Not the street ATMs.

    Jump to: The 3 best 'no foreign exchange fee' credit cards

    Jump to: Ways you can exchange money - from worst to best

    Jump to: Top of this article





    2017
    30
    October
    Why Icelandair's prices suddenly look cheaper, when they are actually more expensive

    Airline prices look cheaper, but are more expensive

    Read more



    2017
    9
    January
    Third Party Airfare Booking Sites: The Power Rankings - who to trust, who to avoid



    Third party airfare booking sites, the power rankings



    Read more



    2015
    28
    May
    Travel Booking Myths That Just Won't Die

    Travel booking myths that just wont die

    Read more



    2014
    19
    June
    How To Use AirBNB - The first site you should visit after booking your flight

    AirBNB

    Read more



    2014
    2
    April
    Free roundtrip flight anywhere in North America | Amex Rewards card offer

    The American Express® AeroplanPlus®* Gold Card

    Read more



    2014
    2
    February
    Where all inclusive prices come from, and why Canadians waste a lot of time searching

    Around this time of year when the temperature drops I often see people asking a similar question, 'What website(s) should I visit to get a good deal on an all inclusive package?'.

    Read more



    2012
    25
    September
    Don't fall for the '$128 for 2 roundtrip flights' OneStopTravel scam

    Over the past little while, I've had a lot of people ask me about a deal they've seen pop up on a variety of those 'daily deal' type sites (you know the ones, the Groupon-esque clones that were all the rage last year, and initially had some legitimately great deals but have now all turned into a wasteland of spa treatments and massages you can never get an appointment for).

    Read more



    2012
    4
    September
    Is it possible to get a good deal on a flight within Canada ?



    Read more



    2011
    21
    April
    'Should I buy my flight now or wait?' - The question I get asked the most

    No matter how many times I tell people that airfare prices can't be predicted, this question always comes up in some form or another, so I've decided to write an article that I can start referencing people to.

    Read more



       











    Join The YUL Deals Facebook Group
        What happens when over 26,000 people from
        Montreal...

        * crowdsource the best travel deals from YUL?

        * offer up their unbiased travel advice?

        Join the group and find out!


    (click the 'Join Group' button, when you arrive)