When you’re looking to buy U.S. dollars, there are a few tricks of the trade that can help save you money and make the transaction process as painless as possible. Here are some of the most valuable tips to follow when looking to convert Canadian dollars into U.S. dollars:
When you’re exchanging currency, location matters. As a general rule, the more “convenient” the location is, the more expensive the rates charged are. For example, if you forgot to plan your currency transaction in advance, then you may be tempted to use the currency exchange provider found at the airport. However, airports, train stations, and malls rarely offer good exchange rates.
It’s easy to understand why the airports, train stations, and malls charge high exchange rates. They are located in prime locations, and can easily take advantage of unprepared travelers in desperate need of a local currency. Additionally, all the aforesaid locations have high overhead costs. Holding a multitude of different currencies physically in inventory, combined with having high rent in these prime locations, leads to these firms passing on these costs to their consumers through higher exchange rates.
Your local bank will be able to offer you a better exchange rate than the exchange providers you will find at these types of locations. The bank still charges a pretty large mark-up, but it is less prodigious than that of your local airport. Your bank is also located very close to your place of residence, so it could be convenient for you.
When looking to do a large currency transaction, location (or provider), matters even more. Consider using an online exchange provider like Knightsbridge Foreign Exchange in order to get the most competitive rates.
Remember that commissions and mark-ups add to the cost of converting currency for you. Be sure to ask the exchanger what the mark-up over the mid-market rate is, and ask if there are any commissions involved. Don’t be afraid to walk away from an exchange provider if you determine their commissions and mark-ups to be unreasonable.
When exchanging currency, you can often be charged with service fees, especially if you are travelling internationally and have been using foreign ATMs. When using online foreign exchange providers, you will get a better rate for doing one larger transaction. As is common with many things in life, in the long run it is cheaper to buy in bulk. The same is true for currency, so try to make the entire conversion of funds in one transaction if you are able to do so. This will get you better rates and help you avoid service charges.
Make sure you keep your priorities in mind as well. Oftentimes, it makes more sense for you to accept a worse exchange rate if it saves you a substantial amount of time or worry. Sometimes it simply isn’t worth it to go 30 minutes out of your way to save 1% on your exchange rate, so prioritize accordingly.
If you follow these tips, you’ll be sure to find a great rate and a smooth transaction process when you next look to convert your Canadian dollars into U.S. dollars.
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