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Currency Exchange - Exchanging Canadian and U.S. Dollars

Foreign currency exchange is always an issue for Canadians who shop in the United States or make online purchases from U.S. based retailers.

Remember that the Bank of Canada rate you often see quoted on websites, in newspapers and on television is not the rate you will receive when exchanging your Canadian dollars for U.S. dollars (or vice-versa upon your return to Canada). When you exchange currency, it can cost you 2 – 3% of the amount you are exchanging, plus additional fees in some cases. This means that if the Canadian dollar and the U.S. dollar are at par, you will only receive about $.97 U.S. for every Canadian dollar you exchange.

Accordingly, it’s important to review your currency exchange options and find the method that best suits your needs. For your convenience, we have provided an overview of the following currency exchange methods, their pros and cons and who they may be most suitable for.

Canadian Dollar Credit Cards

While using your Canadian dollar credit card to make in-store and online purchases from U.S. retailers is often be the most convenient way to cross border shop, it's important to keep in mind that most Canadian credit cards charge a hefty foreign transaction fee for purchases made in U.S. dollars, and you may be in for a surprise when you receive your monthly bill.

However, there has been an exciting development on this front, with the introduction of Canadian dollar credit cards with no foreign transaction fees that also offer attractive rewards programs.

U.S. Dollar Credit Cards

In the past, some cross border shoppers opted for a U.S. dollar credit card to avoid costly foreign transaction fees associated with Canadian credit cards. While most Canadian banks still offer these U.S. credit cards, they have, for the most part, been rendered obsolete by the introduction of Canadian dollar credit cards with no foreign transaction fees that offer all of the benefits and none of the drawbacks associated with U.S. credit cards for Canadians.


Banks generally charge high fees for exchanging currency, usually in the range of 3% of the amount you are exchanging. On the plus side, banks are fast and easily accessible venues for exchanging currency. If you don’t have time to waste and you are exchanging a relatively small amount of money on a one time basis, banks can be a good option.

Currency Exchange Kiosks

There are a number of boutique businesses that specialize in currency exchange located in and around most cities. These businesses often run out of small storefronts or kiosks, and can have slightly better rates than the banks. However, if you are pressed for time, you may not be able find one that is conveniently located.

Online Currency Exchange Services

Online currency exchange services are becoming increasingly popular. They often offer better exchange rates than both the banks and currency exchange kiosks. If you are exchanging currency online, make sure you are using a reputable website and understand how and when your currency will be delivered. If you exchange currency on a regular basis or are exchanging a significant amount of money, and don’t require your funds immediately, exchanging your money online may be a good option.

ATM Machines

If you’re already in the United States and need to access U.S. dollars quickly, ATM machines are always an option. However, it’s important to keep in mind that ATM machines charge relatively high fees for exchanging currency, in addition to flat fees of $2 to $4 per transaction. ATM machines should be viewed as a last resort for accessing U.S. cash.

U.S. Dollar Bank Accounts

If you cross border shop on a regular basis or are making a large purchase in U.S. dollars, you may want to consider opening a U.S. bank account to have U.S. cash at your disposal whenever you need it. Some Canadian banks allow you to open U.S. dollar accounts with no monthly fee and no minimum balance requirements. When the exchange rate is favourable, simply transfer money from your Canadian dollar account to your U.S. dollar account. Keep in mind that you will still have to pay relatively high bank currency exchange fees. vs.

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