The new year brings with it a new Tax Free Savings Account (TFSA) contribution limit. In 2019 you can contribute up to $6,000.
If you’ve never contributed to a TFSA and have been eligible to do so since 2009 the total contribution is $63,500.
When you are traveling out of the country and you make a payment with either your MasterCard or Visa you will likely be asked what currency you would like to pay in, the local currency or your home currency. Which one do you pick? Which one should you pick? To save on an extra service fee, pick the local currency.
The ability of stores and hotels to you offer customers the choice of currencies is known as dynamic currency conversion and is a service provided to retailers by the credit card companies(MasterCard Worldwide, 2016). Customers are the ones who pay the service fee for the perceived convenience of paying in their home currency. To avoid paying this service fee you should pick to pay in the local currency. If you pay in the local currency you will still pay the credit card’s service fee and be given the bank’s exchange rate.
On Visa USA’s website it even recommends to pick the local currency. The website explains that the dynamic currency conversion “…service is offered by merchants and includes a service fee based on the local exchange rate used. If you would like to use Visa’s more competitive exchange rate, ask to pay in the local currency: (Travel Tips, 2018).
If you are traveling this summer and are given a choice of currencies to pay in pick the local currency. This will save you money, it may be 2.5% on the cost of the purchase, but this will add up and why pay more for anything. When you get home make sure you check your credit card statement to make sure you didn’t pay the dynamic currency conversion charge and all the charges are yours.
Fees reduce the return you earn. Check the fees you pay on your bank and investment accounts. If you need to keep a minimum balance on your savings account make sure you do or you may have to start paying a monthly fee. If you struggle to keep the mininum amount consider changing to a no minimum balance, no fee savings account.
Check if your investment account requires a minimum number of transactions in a set period. This can be as high as $100 every 6 months. You will be charged for the transactions, but it will be less than than $100.