When visiting Niagara from US next week, is it better to pay with US$, Credit card, or get Canadian$?
by Author on Thursday, July 22nd, 2010 | 8 Comments
My credit card charges a 3% transaction fee, and I believe several shops in Niagara-on-the-Lake claim they charge a fair currency exchange rate. Is it better to pay with a credit card, use US currency, or get Canadian currency beforehand either in US or from a Canadian bank or exchange? Thanks.
Related Credit Card Sites
- E-currency Exchange | Financial News
- Canadian Currency Strengthens Amid Advances by Crude Oil, Global Equities – Bloomberg |
Forex Make Easy
- Healthy Financial Habits » Blog Archive » Foreign currency exchange rates converter – International worldwide money conversion calculators are available online for free from Google, XE.com, and Oanda.com
If you enjoyed this post, make sure you subscribe to my RSS feed!
It’s hard to generalize on one, there are exceptions to any of the choices.
I suggest getting some Canadian money out at a bank ATM.
I would normally say credit cards as you tend to get good exchange when the switch in currency happens electronically. However, if you are getting charged that much, it is already a significant extra fee. Plus, credit cards defer your purchase. Right now the Canadian dollar is surging. You can’t really control the day to day exchange rate, but the Canadian Dollar is on an upward trend and can go up by quite a bit per day. So using a Credit card can delay the currency exchange by a couple of days, and you could end up with a lower exchange rate. Being the opposite, as a Canadian, I try to use a credit card right now when going to the US.
Merchants are unpredictable too. It usually cost them to take exchange (it’s not the business they are in) and most of the time they pass those costs onto you. Or worse, pass the costs on and make it into a bit of a profit. However, they may actually be having a tough year, because of high gas prices, passport requirements and perceived requirements, and the high Canadian dollar. Some might offer good deals in exchange to try get some extra Tourism business. I would carry some US dollars with you just in case there are some good merchant exchange rates out there. But I wouldn’t carry just that, you could save a little with one, then pay it all back and then some to the next.
U.S$
Of course they say it’s fair! You expected to say that they charge and unfair rate?
Remember, normal FX quotes are for bank to bank deals in the millions. 3% premium is decent for small transactions. I’ve seen merchants charging 5-15%. Remember: they have a time risk. The rates might change by the time they get to the bank. With the credit card, YOU have the time risk. The rate you get is the rate when the charge is presented, not when you make the purchase. If you exchange cash, you are locked in, which could be good or bad.
I get some cash for tips and newspapers and use the card for everyhing else.
Do not use an exchange service or travel agent. Wait until you get there and then get your C$ from an ATM.
You should look into a debit card
The local Canadian stores will rip you off more than 3% on cash conversion, just like the American side stores do on Canadian money.
The best conversion is to buy Canadian dollar travelers’ cheques.
By the way, if you have an AAA credit card it charges only 2%.
Since you will be shopping in Canada, it’s better to use Canadian dollars. There isn’t a lot of difference between American and Canadian currency right now, and predictions are that the Canadian dollar will continue to rise, so get your money exchanged at home, bring Canadian dollars to shop at Niagara, and stash any left-over money away for your next trip. Or use your credit card. But using US dollars in Canada isn’t a great idea, because stores who do accept the US dollars set their own exchange rate and it isn’t as good as the bank.
Enjoy Niagara — it’s a fun place.
All of these answer have some interesting and sometime incorrect information, I am a Canadian, and travel to Niagara Falls and Buffalo areas frequently, you can use US$ or credits cards, if you were going to be in Canada longer and further away from the border, you might choose to have some CAN$.
But a weekend trip to the Niagara region an area were tourisum and the American $ flows freely, do not bother with the exchange, pay for what you want with paper money and the hotels with your CC, you will save on the exchange.
When your bill arrives it will be less than the amount you paid in the first place, on longer trips and there can be a difference in rates of exchange depending on the daily rate, fast food places and malls generally give the closest, smaller stores outside the tourist areas can be less generous.
In a border town like Niagara Falls, and N.O.T.L. they are quite familiar and astute at accepting and exchanging US funds. I usually make sure I have some Canadian for parking meters, coffee, valet & such. But use both $CAN and $US whichever I have at hand at the moment.
Credit vs. ATM — If your card charges 3% per transaction, thats $3.00 per hundred – so you will pay more than $10-15 on a 3 night hotel stay alone. If you get cash from an ATM – you can usually get up to $500 at one time for an atm charge of $2.00 or so. So that would be the choice over the credit card.
Here is one bit of advice for making purchases. You can get a refund of your GST taxes at a duty free shop on your return across the border. BUT — and remember this — the refund is only available on receipts of $50 or more at any one merchant. SO if you are in a store and racking up $40 or so — find something else to add to your purchase to make $50. You will get back nearly that amount in taxes. Like extra mdse for free!