March is here, and the annual rite of hauling the kids off to the south for school break is getting into full swing.
Regardless of whether you’re heading to the U.S. for March break, a quick cross-border shopping trip or a longer extended stay to escape the Canadian winter, your sojourn to the U.S. this year will be costing you more than last year, thanks to the rising Canadian loonie, which is now approaching parity with the American greenback.
“Whether you’re looking for deals or taking a mini-vacation, everyone is looking for a convenient way to access funds,” said Ashif Ratanshi, head of branch investments, deposits and direct investing with RBC.
Ratanshi offers some financial tips to Canadians bound for the U.S. this year.
One is to open a U.S. savings account.
This can help no matter why you’re in the U.S.
“Look for an account with low or no fees that enables you to take advantage of exchange rates when they are favourable and gain interest,” Ratanshi suggests.
“Some will allow you to purchase U.S. dollars through online banking at a preferential rate by simply making a direct transfer from your Canadian dollar bank account to your U.S. savings account from anywhere.”
Another is to use a U.S. dollar credit card. Frequent travellers to the U.S. may want to consider using a U.S. dollar denominated credit card which gives cardholders the flexibility to make transactions in U.S. funds and avoid the hassles of exchange rates and daily fluctuations.
When coupled with a U.S. dollar credit card, a U.S. savings account allows holders to take advantage of favourable exchange rates over time using dollar-cost averaging and then pay off their card balance using U.S. funds directly from their savings account.
If you are a frequent traveller to the U.S. and are one of the thousands of Canadian snowbirds who flock to the U.S. over the winter, consider setting up a cross-border banking arrangement that provides access to your banking services on both sides of the border.
Consider alternatives to cash.
If you are travelling outside Canada generally, not just in the U.S., it’s a good idea to take enough currency for taxis, tips, buses, phone calls and other incidental expenses. However, most countries have rules about how much currency you can take in and out of the country.
Losing money is an upsetting event any time, but it can be devastating when you’re away from home, and most of the time, the money cannot be recovered. That’s why it’s a good idea to carry cash alternatives such as bank credit and debit cards and American Express traveller’s cheques.
American Express is the largest issuer of traveller’s cheques in the world. They are easy to manage and are safer than cash, they come in a variety of currencies and denominations, they can be exchanged for local currencies, they are used like cash, and they can be refunded.
Credit cards are another alternative as they are easy to use and are accepted virtually everywhere. Cross-border debit service usually only requires your bank card and personal identification number (PIN) for ATM withdrawals.
The Canadian Snowbird Association recommends you call your insurance company and ask about coverage limits on valuables such as jewellery and cameras and video recorders. Some policies have limits and restrictions for loss or damage away from your premises.
Declare your valuables at a Canada Customs office to prove they were purchased in Canada and, if possible, rent a safety deposit box at your destination to lock them up during your stay.
Finally, don’t forget travel insurance.
“Regardless of the length or type of trip, it’s important to consider travel medical insurance as medical treatment in the U.S. can be very expensive,” said Ratanshi. “Frequent travellers should consider a multi-trip annual plan to save both time and money.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors. He can be contacted at boggsyourmoney@rogers.com.