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So its pretty easy for the wifey and I to get away to the Caymans and try to do so once per year. However, we are kind of getting killed with currency conversion.

If you use a credit card, you are typically charged in USD. The store gives you a good rate, but not perfect, then the back converts it back to Cayman dollars (CD) and then the credit card converts it back to USD. This three way conversion is about the most efficient, but each transaction takes a bit.

So I tried ordering CD from my bank (Chase), the conversion rate was outrageous, they were taking a 5% fee. Other banks in the area had a similar policy.

So how do I get from USD to CD at a good rate?

I don't mind coming home with money as I will likely spend it on a future trip.

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  • 2
    Do you have a card that works in ATM on the Catmans?
    – Willeke ♦
    Commented Nov 7 at 12:16
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    Stop agreeing to pay in USD. Pay in local currency, have them charge you in local currency, and you'll get the best rate and lowest cost.
    – Midavalo
    Commented Nov 7 at 18:59
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    "This three way conversion is about the most efficient" what does this means? Efficient for paying banks? If the store wants to charge in USD, can't you pay in cash?
    – André
    Commented Nov 7 at 19:39
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    "the conversion rate was outrageous, they were taking a 5% fee" How often have you converted currency? That is a very reasonable amount. For reference, in-airport currency conversions (which are obviously marked up more than your local bank) tend to hover around the 10% mark. We can agree that these fees are all exorbitant, but your 5% figure isn't particularly standing out for what is commonly charged
    – Flater
    Commented Nov 8 at 0:50
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    Why is this even a question when the Cayman Islands dollar is pegged to the US Dollar at 1 KYD = 1.20 USD?
    – Matthew Barclay
    Commented Nov 8 at 3:30

4 Answers 4

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  1. Get a credit card that as no international transaction fees (some do, some don't)
  2. Insist on being charged in local currency. Do NOT let them charge in US$. Don't fall for a scam called "dynamic currency conversion" (see below).
  3. Get an ATM card that has minimal fees for currency conversion (I use Wise).

the conversion rate was outrageous, they were taking a 5% fee

For cash exchange that's actually quite reasonable. You'd be hard pressed to find anything better than this.

Regarding bullet 2) (dynamic currency conversion): That's a fairly recent scam invented by the banks: They offer to charge your cards in your home currency, but they take a hefty "convenience fee" for it. It adds absolutely no value to the customer. The charge will be converted either way. It's just another way banks like to take advantage of their customers and line their pockets. See for example https://www.cnn.com/travel/foreign-travel-pay-local-or-home-currency/index.html

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    I have one, and you still have the issue of a 3 way transaction. The merchant, Cayman bank, and your credit card all do a conversion.
    – Pete B.
    Commented Nov 7 at 13:24
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    @PeteB. If you are charged in CD, and you have the right to insist on this (the credit card agreements require them to give you a choice), there is only one conversion.
    – lambshaanxy
    Commented Nov 7 at 18:43
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    @PeteB. Something is wrong here. When I use my credit card I pay no fees. Its converted at the "official" rate of the day and that's it. This works pretty much the same in every country, although I have not been to the Cayman's in a long time.
    – Hilmar
    Commented Nov 7 at 20:30
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    @PeteB. You’re being ripped off by the stores/restaurants where this is happening. The Cayman Islands is a dual-currency economy. All businesses accept both USD and the local KYD currency. Tell them you want to pay in KYD, and if they refuse, take your business elsewhere.
    – Traveller
    Commented Nov 7 at 21:09
  • This is UK based but the ideas will hold true for cards from other countries - an article investigating the costs of using a card abroad
    – uɐɪ
    Commented Nov 8 at 10:26
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I live in Mexico but because most of our banking is in New Zealand we use our NZD credit cards a lot. This is what we've found has worked best for us (other than using our Mexican bank accounts).

  1. Always pay in local currency. Let your bank handle currency conversion.
  2. Use a bank that has no international fees (ours has a currency conversion fee but no other transactions fees)
  3. Don't accept the vendor offering a USD rate - they just figure out an amount that benefits them, but sounds reasonable to you, and they then convert that to the local currency and charge you in that, and then your bank is converting it back again. It's better to just let the bank do it the first time (see point #1)
  4. Don't accept the conversion offered by the CC payment terminal - this helps people that have large international fees or possibly those that aren't allowed foreign transactions, but that rate is awful. Your bank rate will still be better.
  5. If you need cash, withdraw the cash from an ATM when you get there rather than trying to obtain it before you go.
  6. Use Wise or another similar transfer service and their debit card. They'll usually give you a much better rate than you'll get anywhere else (we transfer cash from NZ to Mexico through Wise - it's way cheaper than withdrawing from an ATM or using our own bank to do the foreign transfer).

@gerrit commented: "What's the difference between (1) and (4)?"

#1 is where the vendor says "do you want to pay in US dollars or Pesos?" - many here in border-zone Mexico just assume dollars and will give a price in dollars, and so we ask them for the price in pesos. A lot of the time they've done a conversion (favourable to them) and if charging to card will charge in pesos (or whichever currency) anyway, since that's what their terminal expects. This has the potential to lead to the 3x conversion that the OP was talking about.

#4 is something that many vendors don't understand, where the CC terminal recognises that the card is a different currency and offers to do a conversion at the terminal. It's something offered by the payment processor rather than the vendor, and is not a favourable rate, so it's better to have them select "NO" to the conversion (or whatever it asks) and have the transaction process in the local currency.

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  • What's the difference between (1) and (4)?
    – gerrit
    Commented Nov 8 at 8:39
  • @gerrit I've added my response to your comment into my answer
    – Midavalo
    Commented Nov 8 at 17:21
  • @gerrit although I guess now that means you're going to ask the difference between #1 and #3 😁 For us #1 is a hard and fast rule, that covers every different option that might present itself that may not be covered elsewhere
    – Midavalo
    Commented Nov 8 at 17:27
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Just in addition to the other excellent answers: since you mentioned you go there quite often, you may want to consider opening a bank account there, ideally with no fees; then use one of the many international transfer services out there to add money to your account there with super low fees and great conversion rates - I use CurrencyFair, but there are others too.

Then you just pay everything there from your local bank account - no fee.

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  • +1 Not a bad idea, but need to be aware that many countries have residency requirements for banking so it may not be an option. But it's a good one if it is allowed
    – Midavalo
    Commented Nov 8 at 0:31
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    @Midavalo The Cayman Islands are infamous for being the tax haven and money laundering site for the world so it should probably be possible to open an account there without residency, but possibly those banks only deal with multi-millionaires.
    – gerrit
    Commented Nov 8 at 8:38
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Consider a wise.com card (formerly known as "transferwise") which gives you a physical chip-based debit card.

You can pay your local currency into it, and set automatic exchanges to happen to Cayman Islands dollars (KYD) when the exchange rate exceeds a limit you set.

When on holiday, you can "spend local money" for simplicity.

Only downside - wise does not pay interest on balances.

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    I get paid interest on my wise balances. However, one should note that wise is not officially a bank and the deposits are not covered by deposit guarantees (the risk should also be lower as it conversely does not do fractional reserve banking, but I still wouldn't keep any significant amount of balance in a wise account).
    – gerrit
    Commented Nov 8 at 8:39
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    -1: Wise card is not issued with a cayman islands country code, I've had them issued as UK and BE so far. Many POS machines will present the option to pay in home currency if it's detected as a foreign card from the country code, so you may end up with a 4 way conversion instead of 3 when wise withdraws USD from your KYD balance (assuming you only have a KYD balance). This is only a decent advice if you can absolutely insist on ever paying in KYD, but I can say from experience (not in cayman islands) that some places will bill you in home currency regardless of what you say.
    – ave
    Commented Nov 8 at 10:49

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