The current currency landscape
Before we dive into the nitty-gritty of currency exchange, let’s take a quick look at the current state of affairs:
- The Canadian dollar remains strong against many currencies, particularly in popular destinations like Japan, Mexico, and South Korea.
- International travel is on the rise, with 77% of travelers planning to venture abroad in 2025.
- Millennials and Gen Z travelers are leading the charge, focusing on meaningful, culturally rich experiences.
Top methods for exchanging currency
1. Use credit cards wisely
Credit cards remain the gold standard for international purchases, offering convenience and often the best exchange rates. However, not all cards are created equal.
Pro Tip: Opt for a no foreign transaction fee credit card. Our top picks include:
These cards can save you the typical 2.5% to 3% foreign transaction fee, putting more money back in your pocket for souvenirs or that extra special meal.
Read More: Best no foreign transaction fee cards
2. ATM withdrawals: A necessary evil
While credit cards should be your go-to, having some local cash is often unavoidable. ATMs generally offer better rates than currency exchange offices, but be mindful of fees.
RBC’s ATM fees. Note the higher charge for international withdrawals
Money-Saving Strategy:
- Use bank-affiliated ATMs to minimize fees
- Make fewer, larger withdrawals to reduce transaction costs
- Check if your bank has international partners for reduced or waived ATM fees
3. Currency exchange services: Choose wisely
If you must use a currency exchange service, do your homework:
- Compare rates with the Bank of Canada’s currency converter
- Check rates at your bank (but don’t assume they’re the best)
- Research local currency exchange offices at your destination
- Avoid airport kiosks and tourist area exchanges like the plague
Expert Insight: We’ve found that well-researched currency exchange offices can offer rates up to 1.5% to 5% better than banks.
Avoiding common currency exchange pitfalls
Beware of ‘Dynamic currency conversion’
This sneaky practice allows merchants to charge you in Canadian dollars instead of the local currency. It might seem convenient, but it often comes with a hidden markup.
Rule of Thumb: Always choose to pay in the local currency when given the option.
Don’t over-exchange
With the rise of digital payments and the increasing acceptance of credit cards worldwide, you might need less cash than you think.
Smart Traveler Tip: Start with a small amount of local currency and top up as needed. This approach minimizes the risk of being stuck with excess foreign cash at the end of your trip.
Leveraging technology for better currency conversion rates
In 2025, fintech solutions are making currency exchange easier and more cost-effective:
- Mobile Banking Apps: Many now offer real-time exchange rates and the ability to lock in rates before you travel.
- Digital Wallets: Services like Apple Pay and Google Pay are increasingly accepted internationally, often with favorable exchange rates.
- Currency Exchange Apps: These can help you find the best rates in real-time at your destination.
The bottom line
As we navigate the travel landscape of 2025, smart currency management is key to stretching your travel budget. By leveraging no foreign transaction fee credit cards, being strategic with ATM withdrawals, and staying informed about exchange rates, you can focus on what really matters – creating unforgettable travel experiences.
Remember, the best currency exchange strategy is the one that combines convenience with cost-effectiveness for your specific travel needs. Happy travels, and may your Canadian dollars take you further than ever before!
Read more: Canada's best credit cards
Conditions Apply. Visit the card provider’s website for complete card details, terms, and current offers. Reasonable efforts are made to maintain accuracy of information, but all credit card details are subject to change.
