Currency Exchange Tips for March Break Travel to the US

Canadians planning U.S. trips for spring break have several ways to pay in U.S. dollars, and choosing the right method can save significant money on currency conversion. That concern is more pressing now as the Canadian dollar sits near a 22-year low against the U.S. dollar, increasing the cost of everyday purchases for travellers.

Credit cards to save on exchange fees

Credit cards are often the most cost-effective choice for spending abroad, says Barry Choi, who runs the Money We Have personal finance and travel site. Many cards do include a foreign transaction fee—commonly about 2.5%—but that still tends to be cheaper than using debit cards or certain cash options.

“A lot of people don’t notice this fee because it’s built into the exchange rate you see on your statement,” Choi notes. “When you review the bill, you only see the converted amount and not the separate fee.”

To avoid those charges, look for credit cards that waive foreign transaction fees. There are dedicated travel cards that do this, including popular options such as the Scotiabank Passport Visa Infinite card and the Home Trust Visa card, which can reduce the cost of purchases made in U.S. dollars.

Another common misconception is that getting a U.S.-dollar credit card from a bank will automatically save money. “Sometimes people think, ‘I’ll just get the U.S. credit card from my bank and it’s a good value.’ But the problem is you have to pay the balance in U.S. dollars,” Choi says, which can complicate payments and budgeting back home.

Should you convert to local currency when abroad?

When you use a credit card abroad, the card issuer performs the currency conversion and typically uses a rate slightly above the interbank rate. Despite that markup, card issuers often provide better overall conversion rates for consumers than ATMs or currency exchange kiosks.

At many points of sale you will be offered the choice to pay in Canadian dollars or U.S. dollars. In almost all cases, opt to be charged in the local currency—the currency of the country where you are making the purchase. The Canadian government’s travel guidance also advises this: having the merchant convert the amount to Canadian dollars usually results in higher conversion rates and extra transaction fees.

To put the impact in perspective, the Canadian dollar has been trading around 70 U.S. cents since late November. That means an item that costs USD$100 can translate into well over C$140 once conversion and any fees are applied, making seemingly modest purchases significantly more expensive.

Rising living costs combined with a weak Canadian dollar make payment choices especially important for families and other U.S.-bound travellers, says Amra Durakovic of Flight Centre Travel Group Canada. She recalls paying USD$50 for a single sushi bento box in New York City—an expense that adds up quickly for a family.

“If you’re travelling with a partner or children, those individual items multiply fast and the overall bill becomes much larger,” Durakovic says, underscoring why travellers should plan how they’ll pay well before departure.

Can debit cards help you save on currency conversion?

Debit cards from major banks generally rank next best after credit cards, but they often carry higher fees—roughly 3.5%—and fewer protections. Withdrawing cash from U.S. ATMs can be the most costly option: you may face that same percentage markup plus a flat ATM fee of around USD$3 to USD$5 per withdrawal, depending on the provider.

Some online-only banks and fintech accounts now offer no-fee debit cards for foreign purchases and even fee-free ATM withdrawals, which can be a useful alternative for travellers who prefer using cash. If you plan to carry U.S. cash, buy it beforehand from a reputable currency exchange with competitive rates rather than waiting until you arrive—airport kiosks and on-site exchanges often add a sizeable premium.

Read more about travel credit cards:

• The best no foreign transaction fee credit cards in Canada
• The best American Express credit cards in Canada
• The best Visa credit cards in Canada
• The best credit cards in Canada