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Discussion Starter · #1 · (Edited)
I made a small purchase today, I checked out the exchange on XE currency converter. I normally get hammered by PP on the exchange rate by about an added 3%.

XE Currency Converter: USD to CAD



130 USD =​
164.424
CAD​
US Dollar1 USD = 1.26480 CAD​

Canadian Dollar1 CAD = 0.790636 USD​



Here is what I was charged on my MasterCard. I'm not sure how, but I got a better rate than the actual exchange rate. I wish I did this years ago, I would have saved a ton of money.

We wanted to let you know that a transaction in the amount of $163.62 at PAYPAL DEGLMANN was approved on your BMO[SUP]®[/SUP] Credit Card ending in XXXX.
 

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Yup. It's common knowledge that PayPal exchange rates are trash compared to that of CCs.

Make sure you have a card that has free foreign transaction though. If you don't, it's not uncommon to be hit with an additional $35-ish fee per transaction.
 
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This isn't limited to PayPal.

When you are visiting abroad and making purchases with a credit/debit card, you are usually asked whether you want to pay in local or your home currency. If you opt for home currency, the vendor's payment system will apply their exchange rate to the purchase. If you opt for local currency, then your card issuer will apply theirs. It is almost guaranteed , your rate will be better than theirs.

Note that this isn't the vendor trying to make more money from you, it's their payment system that makes the exchange and you could say, has a fee built into the exchange rate they apply.

I know the card I use most often has a decent rate but a low fee for the transaction. Some cards has a better rate but higher fee. I use one card for smaller purchases and the other for bigger ones.
 

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Discussion Starter · #6 ·
This isn't limited to PayPal.

When you are visiting abroad and making purchases with a credit/debit card, you are usually asked whether you want to pay in local or your home currency. If you opt for home currency, the vendor's payment system will apply their exchange rate to the purchase. If you opt for local currency, then your card issuer will apply theirs. It is almost guaranteed , your rate will be better than theirs.

Note that this isn't the vendor trying to make more money from you, it's their payment system that makes the exchange and you could say, has a fee built into the exchange rate they apply.

I know the card I use most often has a decent rate but a low fee for the transaction. Some cards has a better rate but higher fee. I use one card for smaller purchases and the other for bigger ones.

Good to know!
 
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