Exchange rate and who is doing shafting

[dutchman48]

I transferred US $ to my Canadian bank and Paypal used 1.297 as an exchange rate.

I had a US transaction on my CC and they charged me 1.372 exchange rate.

Who is giving me the shaft as 8¢ difference seems to be high.

[tobyshitzu]

You did an opposite exchange, 2.5 % premium to the exchanger on each side.  Plus a slightly different exchange rate depending on the time the rate was set with the volitility of the dollar.  The present rate is 1.337.   if you instantly moved US$ to Canadian, then Canadian back to US$ you'd lose 5%.  If you expressed the rate  as the present US$> CAN$ 1.337, 5% would make it 6.7 cents difference.  you are showing 7.5 cents.  The US$>$CAN rate has varried by 1.2 cents over the past week.  

If you are doing many US$ transactions on a Canadian credit card, get one of the cards issued by chase (amzn, sears and others) and pay zero fx premium.  

[pierrelebel]

The difference is Cdn$0.075 per US$1.00

That works out to about 5% or so on the US$ value

2.5% currency conversion fee (spread) when you buy a currency

and

2.5% currency conversion fee (spread) when you sell a currency

The same thing would happen at the bank if you take Cdn$ and ask to exchange for US$.  Once you get the US$, immediately ask the teller to convert in Cdn$.  You will be handed about $95, the difference of 5% being the "spread" you pay when you buy (2.5%) and when you sell (another 2.5%)

When working multiple currencies within your PayPal account it is best to avoid converting until you wish to withdraw funds.  The perfect solution is to maintain two balances within your account: one in Cdn$ and one in US$.

[dutchman48]

The RBC spread with today's figures is closer to 6%, so it appears they are charging more both ways or 1 way.

[tobyshitzu]

If you are looking at the cash rate, they charge a litte more then they do with a credit card or account transfer.