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As loonie nears parity, RBC provides tips and advice for U.S. bound travellers

TORONTO, October 19, 2010 —  With the Canadian dollar hovering close to parity again and the annual peak shopping season just ahead, many Canadians are looking to maximize their budget by travelling to the U.S., either for a short shopping trip, a vacation or as a winter snowbird.

RBC Economics forecasts the Canadian dollar to remain close to parity through the end of 2011. While some of its strength may ease slightly over the second half of next year, RBC expects the Canadian dollar to finish 2011 at a still strong 98.00 U.S. cents.

"With a rising Canadian dollar and many thinking about venturing south of the border, it's important to consider a few simple tips to help save money and enjoy a safe cross-border experience," said Ashif Ratanshi, head, Branch Investments, Deposits and Direct Investing, RBC. "Whether you're looking for deals or taking a mini vacation, it's always a good idea to consider your options for cross-border banking before you leave home."

Ratanshi offers the following six tips:

  1. Open a U.S. savings account - A U.S. savings account is an option to consider if you are planning a U.S. vacation or shopping trip or if you have money left over from your holiday. 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. Some will also 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.

  2. Use a U.S. dollar credit card - Frequent U.S. travellers may want to consider 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 or daily currency fluctuations. Coupled with a U.S. savings account, it also 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.

  3. Consider cash alternatives - Debit or credit cards along with U.S. travellers cheques are easy and secure alternatives to carrying large amounts of cash when shopping or travelling. Credit cards are hassle-free and accepted virtually everywhere and many come with purchase protection and extended warranties. Cross-border debit service only requires your bank card and Personal Identification Number (PIN) for ATM withdrawals or purchases at any of the 1,000,000 merchants in the U.S. that use the NYCE network. Travellers cheques are easy to cash and come in many denominations.

  4. Make cross-border banking work for you - If you often travel to the U.S. or are one of thousands of Canadian snowbirds who head to the U.S. over the winter, consider a cross-border banking arrangement that provides access to your banking services on both sides of the border including U.S. mortgages.

  5. Remember to pack travel insurance - Don't forget about travel insurance when planning short cross-border trips. Regardless of the length or type of trip, it's important to consider emergency travel medical insurance as medical treatments in the U.S. can be very expensive. Frequent travellers should consider a multi-trip annual plan to save both time and money.

  6. Look for easier financing options if buying property in the U.S. - If you are thinking about buying U.S. real estate and you have sufficient equity in your current home, consider a loan or line of credit secured against your Canadian home to buy your U.S. property. This will avoid the need for a U.S. mortgage approval and property appraisal.

For more tips on what you can do to plan a short vacation to the U.S. visit www.rbcroyalbank.com/travel/vacation.html.

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Media Contacts:

Kathy Bevan, RBC Corporate Communications, 416 974-1757
Kerry Gaetano, RBC Corporate Communications, 905 816-5583



 



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10/19/2010 08:29:36