I still don’t know what is best. I always have cash with me for small purchases and use the Credit Card for bigger purchases. Before I travel abroad I calculate and over-calculate how much foreign currency I should buy and sometimes I think why bother with cash at all. I mean I should just have around $5 / day and that would be enough. My Visa card charges me 1.8% commission fee for each transaction (no minimum fee) and I have travelled only to ‘safe places’ so far: North America, European Union, Australia, Japan.
My bank TD Canada Trust makes it very easy to purchase foreign currency. Beside USD and EUR the list to select the currency from contains for example: Barbados Dollar – BBD, Bermuda Dollar – BMD, Croatian Kuna – HRK, East Caribbean Dollar – XCD, Moroccan Dirham – MAD, Peruvian Nuevo Sol – PEN, Tahitian Franc – XPF, United Arab Emirates Dirham – AED, etc.
I can even buy North Irish Pound – INP and Scottish Pound – SCO. I had no idea they had their own currencies.
So last time I purchased Euro and Swiss Francs.
However, I have always wondered who offers a better exchange rate (including the commission): my bank or my Visa card? So I wanted to run an experiment after I’d purchased something using Visa as soon as possible to log on my banking account and pretend I wanted to order foreign currency. I would have written down the rate and then compared it with the rate on my Visa statement. Didn`t do it, either I did not have access to Internet or I was too tired.
However, I have noticed something interesting. In Switzerland I bought a train ticket and the receipt showed the exchange rate and the amount in CAD (Total-EFT CAD: 72.36, does EFT stand for Electronic Funds Transfer) beside of course the amount in Swiss Franc. And the Visa statement showed only the CAD amount as if there had been no conversion! I had used the card a few more times in Switzerland and as expected the statement showed the original amount in Swiss Francs and the converted CAD.
I don’t know how the Swiss Rail did it. However, checking out at the hotel in Geneva I was asked whether I would like to pay CAD. I was given a printout that showed the Swiss Franc amount, the exchange rate and the Canadian$ amount. I suppose they were doing the same as Swiss Rail but there they didn’t give me an option to choose (they have to be quick selling tickets). I asked why they were doing this and I was told they wanted to offer this option to the clients and I was about to ask ‘how’ as well but they wouldn’t have known. Circumspect as I am I turned down the offer. I reasoned the hotel could not offer a better rate than my card (it is a hotel after all and maybe they wanted to make some extra money).
At home I checked the statement and surprise the hotel offered a better rate. Using Visa to convert I paid more, only $0.02 more but still I found it interesting. However, still I won’t take any ‘risks’ in the future . The difference is not worth it.