Dollars for Dollars

Dear Dr. Per Cap: 

I’m traveling to Canada for a pow wow in a few weeks.  What’s the best way to convert American currency to Canadian currency?

Signed, 

Hoping to Place

Dear Hoping to Place,

I traveled to Canada earlier this year for the first time in more than two decades.  I was pleasantly surprised to discover that converting American Dollars (USD) to Canadian Dollars (CAD) and vice versa was easy.

I flew into Toronto where flashy currency conversion kiosks awaited foreign travelers in the baggage area.  But I made a hard pass because the conversion rates were significantly higher than the American to Canadian exchange rate of 1.37.  Meaning Canadian money is worth less than American money, 73 cents on the dollar at the time of my trip.  But the kiosks’ charge an even higher rate to make a profit.

Instead, I opted to use a credit card to pay for hotels, food, Uber rides, and incidentals.  I had no problems with vendors accepting my credit card from a U.S. bank and my transactions were all approved quickly just like when making purchases in the states.

Later my credit card statement listed the amount of each purchase in American dollars along with a 3% Foreign Currency Conversion Fee.  For example, I took an Uber from the airport to the hotel and was charged $48 in Canadian dollars.  This transaction was billed as $35.29 USD on my credit card plus a conversion fee of $1.06 USD.

If you’ve spent any time north of the border, you know how much our Canadian neighbors love their ketchup flavored potato chips.  I couldn’t resist and bought a bag for $4.28 CAD.  It was billed to my card as $3.14 USD along with the 3% conversion fee of $0.09 USD.  Easy-peasy, although I can’t say I was a fan of the flavor.

Because a greenback is currently worth more than its Canadian counterpart, I also enjoyed some extra spending power which helped offset the conversion fees. Although remember that currency values fluctuate so there’s no guarantee the American dollar will maintain its muscle.

Now in the event you don’t have a credit card or choose not to use one, I recommend visiting your local bank or credit union before your trip.  They typically have better exchange rates and lower fees than a currency kiosk.  Just make sure to be extra diligent and careful if you travel with cash.

Also be prepared if you need to convert Canadian currency to U.S. currency returning home.  Say if you win big money at a Canadian pow wow.  In that case check if the pow wow organizer can save you the hassle of converting by paying your winnings in American dollars.  If not, you might be able to exchange Canadian dollar winnings at your bank or credit union when you get home, but be mindful that not all banks convert foreign currencies.  In that case you’ll probably have to rely on a currency kiosk or another exchange business that charges higher fees.

Safe travels and enjoy the P-Dub!