I'm a Canadian traveling to the US next month. I haven't traveled internationally before and I'm not sure how money works. Am I able to use my credit card in the US? I have a $2000 limit, will USD transactions apply to that via the exchange rate or something else? Is my card able to be preauthorized by a US merchant? Can I withdraw from US ATMs using my debit card?
4 Answers
Canadian credit cards work almost universally in the US. You will be charged the amount of US currency after it gets converted to Canadian dollars at the bank rate plus a foreign transaction fee. This is now commonly 2.5% for the majority of current credit cards issued by Canadian banks. Whether this amounts to much depends on what you intend spending on.
The majority of US ATMs work with Canadian debit cards, which will give you US funds at the bank rate plus a conversion fee and a foreign withdrawal fee which can be $5 or more, so if you go that route, try to make the least amount of withdrawals.
Canadian debit cards do not work for US debit transactions, so when asked somewhere if you will be using debit, the answer will be no.
Some banks recommend that you call them to inform them of upcoming travel, but this is less necessary than it used to be. Your bank may have an interface to set your travel dates and destination online or you can do it by phone. It is not necessary, but can reduce the chance of having a transaction blocked. If you do not see a policy about this from your bank, give them a call.
A number of Canadian banks offer pre-paid foreign cash cards. You can get one which will work to lock in the rate and avoid fees. You can also get US cash from Canadian banks, and it is a good idea to do so. Tipping is expected in the US even more than in Canada, so it is advisable to ask for small bills when you get US cash. Some tolls still only accept cash, so definitely take some if you are driving, either in Canada, or at a currency exchange, or US banks when you enter the US.
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+1 for the pre-paid cards. You can save a ton on foreign transaction fees if your normal credit card isn't oriented towards international travel. Commented May 28, 2019 at 21:44
It would be good to check with your bank. Their policies vary greatly. Some seem to accept charges for anything, anywhere. Others may block charges which seem suspicious. I doubt that using a Canadian card in the US would be regarded as suspicious but it would not hurt to check.
Your bank will convert the USD charges to CAD and add a transaction charge. The charge varies considerably from bank to bank. Some give a much better deal than others. If you have time to do some research and maybe get a new card, it could save you a lot.
It is always useful to have some local cash. I suggest getting some USD in advance. I would expect that most Canadian banks could help. It is very hard to determine the best rate but your own bank has a good chance of being better than changing small amounts in change offices or at the airport. Some banks offer to change back unused cash at the rate at which you bought it (here in the UK anyway, not sure about Canada but worth looking for). Also, having some local cash can avoid embarrassing situations in which your card is not accepted.
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"It is very hard to determine the best rate but your own bank has a good chance of being better than changing small amounts in change offices" -- I've never been to the US-Canada border, but in the US-Mexico border you always get a better rate with USDMXN currency exchange businesses. I imagine that people are willing to take worse rates with the bank because it's convenient to just use one's card and not worry about exchanging cash. Another reason is probably that there's a more competitive market with the offices because there's far more of them than banks.– JoLCommented May 28, 2019 at 20:33
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@JoL I'm not sure about Mexico, but U.S. banks typically convert (from any currency) at almost exactly the nominal rates. Many U.S. cards also have no foreign transaction fees at all, so they're actually a much better deal than almost any currency conversion business. Some U.S. banks (Charles Schwab, for example) also refund ATM fees worldwide, so you can withdraw local cash from any ATM worldwide that accepts international debit cards at essentially no cost.– reirabCommented May 28, 2019 at 20:53
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@reirab Hmmm... I said better, but I'm realizing that depends on if you're shopping for USD or MXN. So, they're kind of different markets. I found this that shows the difference. "Promedio en bancos" is "Average in banks". "Promedio en Casas de Cambio" is "Average in [USDMXN foreign exchange businesses]".– JoLCommented May 28, 2019 at 21:28
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@JoL Is that average referring to taking cash into a physical bank location and exchanging it or the exchange fees when using a card? I don't have experience with Canadian or Mexican cards, but looking at a couple of transactions I made recently in Canada and Switzerland on my U.S.-issued card, the exchange rates applied by Amex were within 0.1-0.3% of the mid-market rates that XE lists.– reirabCommented May 28, 2019 at 21:54
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Not Canadian nor traveling to US, but I generally tend to call my bank before going abroad just to inform that I'll be abroad, and they note it down on my account so that payments made abroad will not be detected as fraudulent. Your bank may not have such policies, but I doubt that it'd hurt to call and confirm.– aveCommented May 28, 2019 at 21:58
You should check with your bank.
US bank system is old and inefficient. Many US terminals do not use the chip on the credit card and using magnetic strip can cause card to be blocked. Carious card terminals (also in large hotels) do not yet support PIN with more than 4 numbers.
So, sometime you should notify the credit card that you go to US, and so that they would relax the rules. You may get more credit or you may get a way to pre-pay so that you have such payment not counted on the credit.
You will get an extra fee to exchange currency (but usually it is much more convenient that letting the merchant to convert the currency for you).
Debit cards works (beware of longer PINs and transaction fee).
Avoid large notes. You may pay hotels, Uber, etc. online, so no problem with credit card terminals (but they still account on credit limit).
In any case, your bank will tell you better information (also considering your card).
answered May 28, 2019 at 13:09
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3using the strip can cause the card to be blocked? Says who? My Canadian cards have never had that problem, and I've used them throughout the US and in other non-chip places. Commented May 28, 2019 at 15:46
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1Chip readers, while still not universally available in the US, have gotten much more common over the last few years. Commented May 28, 2019 at 21:35
As a fellow Canadian who has traveled to the US a bunch, here are some tips:
1) Try not to use your credit card as much as you can. The problem is, the bank gives you a horrible exchange rate (this is unique to Canada and may not be true for other locales) plus a transaction fee, so you'll end up losing a whole bunch of money that way. Instead, you should find a good currency dealer near you and convert as much money to USD as you think you'll need. You can almost definitely get a better rate at a currency dealer than at the bank. Bring your credit card anyway just in case, but use it only for emergencies or unforeseen charges, and use cash as much as you can otherwise.
2) If you are staying in a reputable hotel or with a friend, leave as much cash as is reasonable where you are staying. Crime isn't a huge deal in the US (well, depending on where you go), but better to be safe than sorry. You don't want to be carrying around a couple grand and get mugged and now not only did you get mugged but also your vacation is ruined because you have no money at all. Carry as much as you think you'll need, and leave the rest locked in your suitcase in the hotel.
3) US money is confusing for Canadians because their bills are all the same colour. Until you are used to the money, double check your money whenever you pay for things to make sure you're not accidentally giving a $10 bill when you meant to give a $1 bill or something.
These are the main pointers I would give, good luck!
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But remember that there are hotel thieves, and they know all the hiding places, also those you never heard of. A hotel safe is the only acceptable place for lots of money. ATM card and repeated smaller amounts is likely the best.– Willeke ♦Commented May 28, 2019 at 17:27
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@Willeke unless it's a shady hotel where the staff raid the safe. Related. If you're wondering, just lock the safe, call the reception and say you forgot the code. They'll send someone up and you'll see how easy it is for them to open it (which will depend on the safe and hotel policy). Based on that you get a better idea whether your stuff is actually safer in our outside the safe. ;)– JJJCommented May 28, 2019 at 21:31