Penny-wise advice for your next vacation in Canada

Spending money in Canada has become a hot topic these days with reports of new plastic bills melting, pennies disappearing and the U.S. and Canadian dollars trading within a few cents of each other.

On your next trip across the border to Victoria, Vancouver or Whistler, don't be surprised to find:

 -More merchants accepting U.S. dollars at par, meaning one- for- one, whether or not the Canadian dollar is worth a few cents more or less on any given day.
-ATM machines dispensing $20 bills coated in polymer, making them difficult to counterfeit, but harder to fold and sometimes causing them stick together or even shrivel at high temperatures.
-Stores rounding off cash purchases as Canada phases out the penny.  
Whether you're using a credit card, Canadian loonies or U.S. greenbacks to pay for your travels, see my recent Seattle Times Travel Wise column for advice on getting the most for your dollars: 

Paying with U.S. dollars: Shops would rather you pay for cash purchases in Canadian currency, but most will accept U.S. dollars. In the past, most processed charges using the daily exchange rate, sometimes adding a small surcharge. Now, many retailers have been taking U.S. dollars at par.

This can work in their favor or yours, depending on which currency is worth more at the time. Given that the two have been trading within a few cents of each other for months, many retailers are just calling things even.

“It’s up to the store,’’ says Tomarra Walker, executive director of Vancouver’s Robson Street Business Association, “but unless there’s a huge jump in either direction, they’re not going to reprogram their tills to account for it. Some do. Some don’t, but for the most part, the price you see is what you pay.’’

If you pay in U.S. dollars, you’ll get your change back in Canadian currency. If you come up a few cents short, it’s not because anyone’s trying to fleece you. Retailers round prices up or down to the nearest five-cent increment as part of Canada’s gradual move to go penniless.

Using an ATM in Canada is the easiest and generally least costly way to obtain Canadian dollars, assuming you use a low-fee or no-fee debit card.

Aim for a card with a maximum 1 percent foreign currency conversion fee. Cards issued by smaller banks and credit unions are your best bet. Bigger banks usually charge 3 percent plus a withdrawal fee.

Charles Schwab Bank issues a debit card, tied to a checking account, that carries no ATM fees and refunds fees other banks charge for using their machines.

Bank of America waives foreign ATM charges if you use a machine tied to one of its Global Alliance affiliate banks — such as Scotiabank ( in Canada.

Canada has been replacing its paper currency with polymer bills over the past two years, starting with $100 and $50 bills and with $20 bills last November. There have been some complaints about bills shriveling, but unless you plan on sitting on a radiator, no real need to worry.

Canadian banks are ahead of the United States in issuing Visa and MasterCard credit cards embedded with microchips designed to prevent counterfeiting.

Unlike some places in Europe, retailers are set up to also accept U.S.-issued credit cards with the traditional magnetic stripes. If you have one of the new Bank of America chip cards that work with a signature rather than a personal identification number (PIN), they take those, too.

Minimize extra costs by using a card that carries a low or no foreign-currency transaction fee.

Virginia-based Capital One waives these fees. Bank of America charges a 2 percent fee for its new AAA Visa with a chip and magnetic stripe.

Note that the new rounding policy only applies to cash transactions. Credit-card purchases are processed for the exact amount ... down to the penny.

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