The Almighty Dollar
One of the difficulties facing Americans living abroad is how best to convert your greenbacks into the local currency. It's amzing how many schemes the banks and credit card companies come up with to steal your money. Case in point, the advertisers want you to believe that the best exchange rate you can receive when purchasing overseas is from using your card. Partially true, but herein lies the fine print. On top of that exchange rate, we will tack on our own fee to cover the "cost of echanging money". What a farce. Ok, there's no question that the Currency Exchange Kiosk on the corner next to the trendy tourist attraction is not giving you a good rate. At least they tell it how it is. No hidden fees or skimming off the top. Let's examine how the various "exchange" companies do their business.
Currency Exchange Kiosk - You give me your greenbacks and I give you XX Canadian Dollars in exchange. Oh, if you change your mind and come right back with those same Canadian Dollars, I'll change them back into greenbacks, but you won't get as much as you started with. How much less? Well, on average 3 - 4 cents less on the dollar. Cost of doing business you see.
Canadian Bank - The exchange rate for coverting greenbacks to maplebacks is XX. How is that calculated? Well, it varies throughout the day as the market exchange rate fluctuates, but I assure you you are getting the most current rate available. Why is the exchange rate higher than the highest rate it traded at on the markets? Well, our rate is linked to the market exchange rate but it is "slightly" higher due to administrative costs. How much higher? It's not a fixed amount, it varies on a variety of factors, but I assure your sir you are getting a competitive rate. Oh by the way, if you are depositing your funds by American check or money order, we will put a 25 business day hold on your funds. Why? Well, it takes some time for us to send request for funds to your bank in the US and then for them to return the actual funds to the bank. Note: Kind of funny how over the past year, the funds have been removed from my checking account on average, two days after I deposit it in the bank. The other 23 days must be because they have to get the money by dog and sled team to your bank.
American Credit Card Company - We have the best exchange rate. True. Without a doubt, based on my informal check of the exchange rate I get on a day I deposited funds in Canadian bank with the exchange rate on a purchase made that same day. About 1-1.5 cents better on the dollar. But wait, Mastercard and VISA charge a 1% fee on all overseas purchases. So what's that other fee? Oh, well we charge a 2% fee on all overseas purchases to cover our costs.
Amazing. Because of the aforementioned 25 day wait on depositing funds into by Canadian bank, I have taken to charging just about everything. That little 2% credit card fee has been costing me close to $50 US a month over the last year. Luckily I have found a credit card company that deals with the military that does not charge any additional fee for overseas purchases and I have applied for a card through them. A little late, but I refuse to give the money-grubbing credit card companies one more cent of my hard-earned money. What a racket. I'm already spinning from the upward spiralling dollar, which had severely reduced my purchasing power North of the border. Internet shopping here I come. Oh, forget that, I forgot about the customs dues on all purchases via the mail. It's a losing proposition, but I will continue to fight the hard fight.
Currency Exchange Kiosk - You give me your greenbacks and I give you XX Canadian Dollars in exchange. Oh, if you change your mind and come right back with those same Canadian Dollars, I'll change them back into greenbacks, but you won't get as much as you started with. How much less? Well, on average 3 - 4 cents less on the dollar. Cost of doing business you see.
Canadian Bank - The exchange rate for coverting greenbacks to maplebacks is XX. How is that calculated? Well, it varies throughout the day as the market exchange rate fluctuates, but I assure you you are getting the most current rate available. Why is the exchange rate higher than the highest rate it traded at on the markets? Well, our rate is linked to the market exchange rate but it is "slightly" higher due to administrative costs. How much higher? It's not a fixed amount, it varies on a variety of factors, but I assure your sir you are getting a competitive rate. Oh by the way, if you are depositing your funds by American check or money order, we will put a 25 business day hold on your funds. Why? Well, it takes some time for us to send request for funds to your bank in the US and then for them to return the actual funds to the bank. Note: Kind of funny how over the past year, the funds have been removed from my checking account on average, two days after I deposit it in the bank. The other 23 days must be because they have to get the money by dog and sled team to your bank.
American Credit Card Company - We have the best exchange rate. True. Without a doubt, based on my informal check of the exchange rate I get on a day I deposited funds in Canadian bank with the exchange rate on a purchase made that same day. About 1-1.5 cents better on the dollar. But wait, Mastercard and VISA charge a 1% fee on all overseas purchases. So what's that other fee? Oh, well we charge a 2% fee on all overseas purchases to cover our costs.
Amazing. Because of the aforementioned 25 day wait on depositing funds into by Canadian bank, I have taken to charging just about everything. That little 2% credit card fee has been costing me close to $50 US a month over the last year. Luckily I have found a credit card company that deals with the military that does not charge any additional fee for overseas purchases and I have applied for a card through them. A little late, but I refuse to give the money-grubbing credit card companies one more cent of my hard-earned money. What a racket. I'm already spinning from the upward spiralling dollar, which had severely reduced my purchasing power North of the border. Internet shopping here I come. Oh, forget that, I forgot about the customs dues on all purchases via the mail. It's a losing proposition, but I will continue to fight the hard fight.
posted by Paul Crowley @ 9:00 AM
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