Killing the exchange rate
The only benefit to the EU was its original function: a single currency for many countries. Never mind that my German relatives were disgusted by stores switching DM to Euros, leaving the numbers unchanged, meaning everything doubled in price, overnight.
For us non-European travelers, having a single currency is so-o-o convenient. Unless, of course, we also went to England. Or to Switzerland. Or to Sweden...
Over the years, I employed a variety of ways to pay for things with our Canadian dollars in Europe:
- American Express travelers cheques -- remember those?
- Withdrawing Euro cash from European bank machines with my Canadian bank card -- once too often experiencing machines that didn't work right when I needed more cash urgently!
- Using my credit card -- at a terrible exchange rate plus service fee
- Purchasing Euros in Canada when the exchange rate was optimal -- but then carrying 1,000 Euros in cash on my person.
After the WHO shut down the world, one fallout was from currency exchange locations going out of business. Looking ahead to my upcoming trip to Germany, I found there was exactly 1 within 50km. I went there, and the proprietor said he didn't have any Euros, but could get some in a week. Or maybe in two weeks. I declined.
Then Wise (formerly TransferWise) released their debit card to Canadians. It took me a bit to figure out how it works, and it seems like a brilliant solution. Wise charges a low fee (no, this is not an ad I am writing for them!) and exchanges funds at the current exchange rate -- no markups. Banks often charge 6% difference in exchange rates, as well as charge a fee on top. The spread in exchange rates has worsened over the years.
(Wise doe not actually moving any funds across borders: they debit funds in one currency in one country, and then credit the other currency in the other country. I use Wise to "move" funds to and from clients and family in Europe, saving as much as $32 each time in bank fees.)
Here is how the Wise debit card works:
- Move funds from your bank to your Wise account. In my case, I "pay a bill" on my bank account to Wise. The funds remain in in Wise account in my local currency, Canadian in my case.
- When I need money in another currency, such as Euros, I move funds from Canadian to Euros within the Wise app. There is a small fee, like a dollar or two.
- I can now use the debit card to make purchases in Europe, with no service fee. While still in Canada, I tried this out by using the Wise card to pay for seat reservations through Deutsche Bahn's Web site. It worked. I paid e8 instead of (roughly) $12.
- I can move funds between currencies at any time, and it takes a second or two. I try to wait when the exchange rate is favorable, like this morning (red circle) from xe.com/currencycharts/?from=EUR&to=CAD&view=1W.
If I do not use all the Euros on a trip, then I can convert them to, say, US$, should I have a trip to USA. Or back to Canadian funds. Each time, though, Wise charges its fee.
The card works as a debit card in Canada (I tested it), but it cannot be used to withdraw funds in Canada. I look forward to seeing if I can use it withdraw Euro cash from a European bank machine.
(Tip: Wise lets you specify an exchange rate, at which point Wise converts a set amount automatically. Useful when the exchange rate bottoms out in the middle of the night!)