It seems Mastercard adds 1% to the whole sale or government mandated rate while my bank adds another 2%. So roughly a 3% fee. Is this about the standard rate?
Is the 3% fee still better than most currency exchange centers?
Thanks.
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It seems Mastercard adds 1% to the whole sale or government mandated rate while my bank adds another 2%. So roughly a 3% fee. Is this about the standard rate?
Is the 3% fee still better than most currency exchange centers?
Thanks.
When you charge an item on your credit card and later pay for it in US dollars the conversion between currencies is typically done at the wholesale rate. That way you get to take advantage of the bulk processing power of Visa, Mastercard, etc. When you convert currency at a bank or stand alone company, you will be paying the retail rate, which is higher. Neither of these rates will be as good as the commercial rate often quoted in your local paper or on web sites - that is only available between banks when they are transferring millions of dollars worth of foreign money. But the wholesale rate is generally in the range of the commercial rate plus a few percent - what you seem to be getting. The worst place to exchange money is at the airport when you land or just across the border in a stand alone Currency Exchange Store. The next time you go by one, check the difference between what you would get if you converted Canadian dollars to US dollars and vice versa. The difference will be big and amounts to a huge percentage fee. If you need cash, get it at you local bank before you go (many need several days lead time to accommodate you, they don't carry a lot of foreign currencies), or through an ATM that accesses your account - not one that gives you an advance or loan and starts charging you interest. You can't avoid paying something for converting your American dollars into Canadian dollars, but if you pay just the minimum of attention to how you're doing it, you can keep that cost down in the 'noise' of your overall expenses.
AZBuck
It sounds like it's different over there but, in the UK, we are usually charged the wholesale rate PLUS 2 or 3 percent when spending in foreigh currency (even the Euro). This adds up to a pretty poor deal for the consumer and a very good deal for the banks. Thankfully I have a credit card issued by a bank that offers the wholesale rate. This is pretty unusual (ie a loss leader for the bank) but it is always a pleasure when I receive the statement to see I get the very best exchange rate (on a recent trip I got $2.01 to the Pound!) The reason I'm saying this is to point out there's not a 'one size fits all' answer - check with your bank.
It's even worse when you pay for currency at a bureau de change using a credit card as the credit card company will charge is as a cash advance and you end up paying their ludicrous rate of interest from day one. To counter this always pay by debit card or get cash from an ATM. Also, as has been suggested, carefully check how much you're gonna get for your Buck. If you shop around you can get some far better deals than if you're lazy and pick up your currency at the airport - thank god for the internet!
[rant]
Last week I brought my car in to get the wheel bolt and nut replaced because the thread on both stripped.
Two days later the check engine light comes on. Took the car to the dealer and they said it's because of faulty ECM but it is under extended warranty so they'll fix it for free once the part arrives.
Well the ECM arrived this past Monday and they replaced it the very same day.
I happened to got my GPS that same day so I fiddled with it all night and decided to go out on a drive to test it out.
Just as I thought, hey this things pretty cool, the check engine light comes on AGAIN.
I planned on leaving for my road trip this Thursday morning. I really hope my car gets fixed in time, and stay fixed... :(
[/rant]
:D
Nightmare! I hope you get it all sorted out in time for the off - fingers crossed!