If you have no idea what Norbert’s Gambit is, it’s a way to cheaply convert USD/CAD in your online brokerage account. Most brokers support it1.
Because I hold a lot of USD assets in my retirement savings, and since I live and spend most of my money in Canada, I need a way cheaply convert to Canadian funds in my RRIF. So last week, I had to convert some of my AOA holdings into XGRO holdings and so I updated the log I’m keeping. So far, I’ve done the Gambit three times this year, and twice I’ve lucked out on the FX rate changes and actually made money2 on the transaction.
And many people expect Wealthsimple to join this club soon. ↩︎
What I mean: if the funds had converted instantaneously with no fees rather than waiting around for the 3-5 business days for the Gambit to complete, I would have received LESS money than by using the Gambit. Over time, I expect this will even out, but right now I’m about $55 CAD ahead. ↩︎
Wealthsimple’s prepaid Mastercard (aka the Cash Card) has stopped offering cashback on purchases, effective October 2nd, 2025. Don’t confuse this with Wealthsimple’s Visa card, which is an actual credit card, and still offers a nice 2% cashback reward.
I’ve been a fan of Wealthsimple’s prepaid Mastercard for a while now. I wrote about it over here. My favourite feature of this prepaid Mastercard is that it does not charge the usual 1.5% foreign exchange fees most other credit cards bury in their transaction costs.
The demise of the 1% bonus isn’t a deal-breaker for me but it was nice while it lasted. The card is also noteworthy because it permits ATM access globally with no fees. This isn’t a feature I’ve used, but it might be of interest.
I signed up for the waitlist for Wealthsimple’s Visa card when it was released, but the rollout has been v-e-r-y slow, and I’m still waiting for that to materialize1. Once I get my hands on one, I will have no incentive to use the prepaid card since the Visa card also offers no-charge foreign exchange AND 2% cashback on all purchases. That’s a great deal.
About every third post on Reddit’s Wealthsimple sub is complaining about the slow rollout. ↩︎
Since I hold a fair amount of USD in my retirement portfolio and most of my expenses are in CAD, I do have to convert between the two worlds from time to time. Most of the time I’m converting USD to CAD, but because of higher US interest rates, I’ve recently converted some CAD into USD to take advantage of that fact and earn a little more money on my cash positions1. My normal way of dealing with this conversion is using Norbert’s Gambit, which I’ve talked about here and here.
Anyway, I’ve decided to keep track on what these movements are costing me using my current broker of choice, Questrade. The answer is not quite as straightforward as you might think.
Fixed Cost
With Questrade, a journaling2 fee is charged every time you do the Gambit. This costs $9.95 plus HST for a total of $11.24, always charged in Canadian dollars. If you choose to subscribe to Questrade Plus, then your monthly fee covers these costs. I’ve done the Gambit twice this year, with one more planned in the 4th quarter. So for me, the cost of journaling is a pay-as-you-go cost. This cost is the same whether you are journaling one share or 10,000 shares, so larger transactions are better here.
Variable Cost: Changes in USD/CAD rate
Performing the Gambit using Questrade takes several business days. The foreign exchange rate moves all the time, so by the time you complete the conversion, the rate has almost certainly changed from when you started the process. Sometimes this works in your favour, sometimes not. Most of the reading I’ve done suggests you ignore this variability, since over time it should even out. For kicks, I’m tracking it.
Variable Cost: Buying and Selling DLR/DLR.u
Any trade you do has an inherent cost, even if you pay $0 commissions3, as I do. That cost is buried in the bid/ask spread. You may have noticed this at work immediately after completing a trade — it almost always seems that the market value of what you just bought is a little lower than what you just paid4. This variable cost is buried, but can be estimated by looking at the average bid/ask spread of DLR, which is featured on its fact sheet. It’s currently stated to be 0.07% when buying/selling DLR and 0.1% when buying/selling DLR.U5 . So, on average, you will sustain a total 0.17% cost when doing the Gambit. But I must reiterate — this cost is buried in the actual price per share you get when buying/selling DLR. Now, I actually paid very close attention to the bid/ask pricing last time I did the Gambit and I paid about half that rate but that’s all down to things like the volume of trading on the day, how many shares you’re moving and a whole bunch of other things that I don’t fully comprehend.
Anyway, here’s my tracking table that I’ll update as I do more of these trades:
Some definitions are in order:
DLR Buy: date upon which DLR (or DLR.u) was purchased.
DLR Sell: date upon which DLR (or DLR.u) was sold. There’s a lag because that’s how long Questrade takes to complete the journaling request. Seems like it’s 3 business days.
USD: The USD value of DLR bought or sold as reported by the trade confirmation6
CAD: The CAD value of DLR bought or sold as reported by the trade confirmation7
Effective rate: divide the previous two columns to come up with a USD in CAD rate8
Spot Rate on BUY/SELL date: daily average exchange rate9 as reported by the Bank of Canada
Target currency: what we end up with, USD or CAD. It’s the opposite of what we start with
Ideal in target currency: This is a calculation that takes the starting currency and applies the spot Rate on the DLR buy day to come up with the target amount. The ideal would be what you would have gotten if you had access to a no-cost conversion on the day you decided you wanted it.
Net Cost subtracts either the USD or CAD column from the ideal amount. If it’s negative, it means the foreign exchange rate moved in our favour between the buy and sell dates. Net Cost is given in the target currency.
Journal fee is charged by Questrade
Total cost adds the journal fee and the net Cost and converts everything to CAD using the spot Rate on the buy day. If it’s negative, we actually made money doing the conversion.
% cost takes total cost and divides by the CAD column
If you want a comparative cost, a typical broker charges 1.5% of the amount changing hands. Looks like I’m doing far better than that so far!
And by “cash” I mean either ICSH or ZMMK, which are ultra-short-term bond funds denominated in USD and CAD, respectively. They are both featured as ETF All-Stars.↩︎
“Journaling” is the technical term for moving an interlisted stock/ETF from the CAD side to the USD side of your account or vice versa. ↩︎
An attractive feature of Questrade, among others ↩︎
This effect is often masked by the volatility in the asset you’re buying, but when you buy very stable priced assets like ZMMK or ICSH or CASH it becomes quite noticeable. ↩︎
And 0.07% happens to be one cent divided by the current DLR Canadian price of $14.12. And 0.1% happens to be one cent divided by the current DLR.u price of $10.24 USD. ↩︎
Travel is something I like doing. Spending money on seeing new places, trying new things, all good from my perspective. But spending unnecessary money to line the pockets of a bank? I’m not so good with that.
For many years, I’ve used my credit card everywhere, in every country. Very convenient. I recall my first big trip abroad (circa 1992) where my main source of money was Travelers Cheques, if you can believe it. (Looks like they aren’t even available in Canada anymore).
It’s common for a credit card company to charge a foreign currency conversion fee between 1% and 3% of the transaction amount.
What’s especially sneaky, and the reason I never gave it much thought, is that the fee is buried in the exchange rate that is posted as part of the transaction. As a result, it’s easy to miss how much you’re giving to the bank.
Now, 1% to 3% extra for a cup of coffee or a taxi ride isn’t going to break the bank, but for a multi-night stay in a hotel? Show tickets? Car rentals? It can start to add up.
Here are two products that I use to help get rid of those fees. There are others out there, but these I have used myself and can recommend them.
Wealthsimple’s Cash Card
I’ve been rather curious about Wealthsimple for a while now. I started with using their “pay what you want” tax service and saw it got a mention from the Globe and Mail’s Rob Carrick (an excellent resource, by the way) which led me to investigate further. This is NOT their “beta” Wealthsimple Infinite Visa credit card that is coming out in 2025.
Now you can feel like a local while shopping abroad. With no additional foreign transaction or ATM fees from Wealthsimple, your Cash card is a must-have travel companion.
The Cash Card, as far as a vendor is concerned, looks like a MasterCard. But to you, the card holder, the Cash Card looks like a debit card. Any transaction charged to the Cash Card is instantly debited, so you have to have the money available in your Weathsimple account before you go on a shopping spree.
Signing up for the Cash Card was done online, in minutes. Putting money on your Cash Card can be done using Interac e-transfer from your “usual” bank account, and is available pretty much instantly as well. Cash Card supports Apple Pay and as a nice bonus, also provides you with a “virtual card” accessible from the Wealthsimple app so you can enter credit card details for online purchases. You can also order up a physical card, but I’m still waiting for mine….The Canada Post strike apparently is still being used as an excuse in that regard. (Not a big deal, I rarely use a physical card anymore).
I’ve now successfully used the Cash Card for US dollar and British pound purchases, and the rate I got was exactly the same as the rate I saw in real time from Google (cries quietly at the current exchange rate):
Pro: Very easy to set up, does what it says — no extra foreign exchange fees
Pro: Supports multiple foreign currencies, with only a few exceptions.
Pro: It’s free, and the money in your Cash account actually earns a bit of interest.
Con: You have to have the money available up front, it’s not a credit card that you can pay later.
CIBC’s US Dollar Aventura Gold Visa Card + CIBC US Dollar Savings Account
If instead you’re looking for a REAL credit card and you’re only interested in US dollar transactions, then CIBC’s US Dollar Aventura Gold Visa might be a choice. I signed up for this card because a lot of my retirement funds are in US Dollars, I travel and shop in US Dollars pretty regularly, and I happen to bank with CIBC which also makes things easier.
However, unless you already have a US Dollar bank account that can pay off your US Dollar credit card, you’ll need to set that up at the same time. So for that I used the CIBC US Dollar Savings account. This should not be confused with CIBC’s US checking account which isn’t required (I have this account too, but have very limited use for it).
So, applying for these products is the typical Canadian bank experience. Multiple days, multiple forms, mildly unpleasant, but as a self-directed investor, not unusual, either.
The Visa card has an annual fee ($35, which includes up to 3 additional cards) and allows you to collect a small amount of Aventura points which can be redeemed for cash or gift cards. The card supports Apple Pay and generally works like any other card you may have used. Just make sure you don’t accidentally use it for a Canadian dollar transaction or else you’ll get charged that extra conversion fee that you were trying to avoid in the first place.
The savings account pays a paltry amount of interest (0.05% for balances under $10,000 USD) and charges $0.75 USD for every transaction. So, nothing to write home about there. But it is in essence a Canadian bank account in every way; this means (for example) it can be set up as a legitimate bank account with your online broker.
Pro: if you’re already banking with CIBC, both the credit card and the savings account are linked to your existing CIBC bank card, so you can see everything from one login.
Pro: Related to the above, you can set up auto payment of your USD credit card from your USD savings account
Pro: Related to the above, you can easily move money from your Canadian accounts to your US accounts. Of course, with this convenience comes the added foreign exchange fee that you were hoping to avoid, but if you’re short US Dollars, then it’s an option. (In another post, I’ll talk about how I convert US dollars cheaply).
Pro: It’s a real credit card, meaning you can defer payment.
Con: Compared with Wealthsimple, it’s somewhat painful to set up
Con: it’s only useful for US dollar transactions
For most people, the Wealthsimple Cash Card is the easy way to save money on foreign transactions, and the downside is small. If you have access to US dollars (maybe you’re paid in USD, or like me, have investments in USD), then perhaps the CIBC Aventura card might make sense, too.
The Money Engineer 