Question for Canucks Cruising in US

As retirement approaches, the Admiral and I are thinking about money while cruising. We intend to be snowbirds, cruising the Florida Gulf and Keys, with side trips to the Bahamas. We are curious how other Canadians organize their banking, credit cards etc. to manage things in USD for 6 months. Is there any advantage to having an account with a US bank? We already have USD accounts with our Canadian bank. Any suggestions are appreciated.

David & Maria

David Rive said:

As retirement approaches, the Admiral and I are thinking about money while cruising. We intend to be snowbirds, cruising the Florida Gulf and Keys, with side trips to the Bahamas. We are curious how other Canadians organize their banking, credit cards etc. to manage things in USD for 6 months. Is there any advantage to having an account with a US bank? We already have USD accounts with our Canadian bank. Any suggestions are appreciated.

David & Maria

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David..If you bank with TD Bank they have a US version. The accounts can be managed from your CDN online application. Monies moved at no cost between accounts.
I'm sure the other banks have their version but this one is the most seamless.

TD Bank or Toronto Dominion as we know it has a huge presence (1300 locations) along the east coast all the way to Florida. They also have US dollar accounts that are still based in your home branch. This is important if you re going to overstay the 6 month limit set by the IRS as you can truthfully say that you have very little connection to the US when you file IRS form 8840, which most of us need to do due to the Erie Canal operating dates.


https://www.irs.gov/pub/irs-access/f8840_accessible.pdf

Not a Canadian, but BMO and TD have a lot of branches in Florida. Many Canadians who spend a lot of time here find them advantageous.

Basic banking I wouldn't see much difference. However, check acceptance there is. ATM no big deal, but if you actually want to cash a check or withdraw larger sums of cash there would be. And probably the one place you would benefit is to have a US credit card whether you have a bank account or not, simply to avoid currency exchanges.

David, we're not Canucks but we are snowbirds, spending much of our winter in Arizona. I do all of my banking online including bill payment. I set that up several years ago and have been doing it ever since.


I have my income checks electronically deposited to the bank. Almost all of my bills are sent to me electronically and show up at my online banking pages. The two or three who are not yet equipped to do electronic billing and still mail out bills are a PITA. We have a neighbor who keeps an eye on the house while we're gone.


I have her give me a call about once a week to touch base. She opens up any of the bills I ask her to (the ones who do not yet do electronic billing) so I can get the amount owed and the date.


I then go into the bank's website and pay those bills.


Where paying bills used to take 10-30 minutes to get envelopes, stamps, etc and write checks, now it's done with a few clicks and takes 2-5 minutes total time.

The Other Gary said:

TD Bank or Toronto Dominion as we know it has a huge presence (1300 locations) along the east coast all the way to Florida. They also have US dollar accounts that are still based in your home branch. This is important if you re going to overstay the 6 month limit set by the IRS as you can truthfully say that you have very little connection to the US when you file IRS form 8840, which most of us need to do due to the Erie Canal operating dates.


https://www.irs.gov/pub/irs-access/f8840_accessible.pdf

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I don't know what others are doing, but do file form 8840 if you overstay 183 days. This is a quirky IRS kind of thing, but if you don't file it timely, you lose the exception to US taxes even if you filed it a week late or if you otherwise would have qualified.

In many areas of US taxes there are far greater penalties such as this one by failure to file a very simple and short form than failure to file or pay taxes. Subchapter S paperwork, operating loss carryovers, and many others much like the 8840 and so the penalty for late filing or failure to file the form isn't 5% or 10% can be 1000% or an incalculable percent since it's taxes due vs. no taxes due.

If in all of this you conduct any US business, then I'd strongly advise a US tax accountant who has Canadian clients. South Florida is a great place to find them. South Florida has over a million Canadian visitors a year.

The other option is to spend part of your winter in the Bahamas to bring your total time in the US under the 183 day limit. Don't forget to calculate any time spent in the US during the summer as many of us Cruise both sides of the border in the Great Lakes. I have 5 days in 2016 that are relevant that cannot be overlooked. They also want data on previous years and they use a calendar year not the length of a midwinter cruise so you will do multiple filings to be on the safe side. And everyone, spouse etc. should file.

When cruising the Inside passage we use our credit card. The company then posts the amounts we spent in USD with the appropriate exchange rate at the time of the charge. All of our banking is online and we have auto bill pay.

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NOTE to Canucks: IRS filing is April 15th, Not April 30th like Revenue Canada

In addition to TD, RBC has a presence in FL albeit somewhat limited.

Donsan said:

In addition to TD, RBC has a presence in FL albeit somewhat limited.

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Yes, they were sold and no longer part of Royal Bank of Canada. So technically a US bank serving a lot of Canadian customers.

Alaskan Sea-Duction said:

When cruising the Inside passage we use our credit card. The company then posts the amounts we spent in USD with the appropriate exchange rate at the time of the charge. All of our banking is online and we have auto bill pay.

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Just check the exchange rates being used. Credit card companies have been known to use exchange rates far different from those your bank will give you, adding a bit of extra profit on their side.

The exchange rates on CC's are usurious. It would be useful to investigate if you can qualify for a US based credit card, and top up the US accounts with US$. Shop around for best exchange rates. We use an Asian one in Richmond BC and the savings were substantial. But the issue is the credit card and I am uncertain how that can be achieved except with a pay-as-you-go card from a Walgreens or something like that.

Jim

Great advice all around! Much appreciated.

The Admiral banks with BMO and I deal with RBC, so it sounds like BMO would be a good option for FL.

And RBC is big in the Bahamas

BandB said:

And probably the one place you would benefit is to have a US credit card whether you have a bank account or not, simply to avoid currency exchanges.

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We have both American Express and Capital One cards that have no foreign transaction fees. It should be easy enough to find a Canadian card that does same. We have a BMO account for Canada for writing checks and getting cash when we're in Canada. Hard to find Wells Fargo in Canada.

The Other Gary said:

And RBC is big in the Bahamas

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But keep in mind the RBC in the Bahamas is not the one in the US. It is owned by Royal Bank of Canada.

yes, that was for David who banks with RBC in Canada

sunchaser said:

We have both American Express and Capital One cards that have no foreign transaction fees. It should be easy enough to find a Canadian card that does same. We have a BMO account for Canada for writing checks and getting cash when we're in Canada. Hard to find Wells Fargo in Canada.

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Foreign transaction fee isn't the problem. It's translation rate they use. If they translate currency at an unfavorable rate to you then they make more money on that than they would on a transaction fee.

It my be hard to find Wells Fargo anywhere before long.

BandB said:

Foreign transaction fee isn't the problem. It's translation rate they use. .

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We have followed that pretty closely for decades. This is on tens of thousands per year of Canada charges on a US card. Surprising how close they are to the exchange rate posted for the day.

sunchaser said:

We have followed that pretty closely for decades. This is on tens of thousands per year of Canada charges on a US card. Surprising how close they are to the exchange rate posted for the day.

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That's good. The fact you follow it and they're reasonable. Just a caution to others to do the same. I don't think the problem is as widespread as it once was.

JDCAVE said:

The exchange rates on CC's are usurious. It would be useful to investigate if you can qualify for a US based credit card, and top up the US accounts with US$. Shop around for best exchange rates. We use an Asian one in Richmond BC and the savings were substantial. But the issue is the credit card and I am uncertain how that can be achieved except with a pay-as-you-go card from a Walgreens or something like that.

Jim

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TD, as mentioned above, has both Canadian and US based branches that actually talk to each other, with what they call "cross-border banking".
That allows us to transfer $US from our Canadian TD account to our US based TD account, to have a US debit card that is in $US and a Canadian Credit card in $US. So no exchanging from Canadian$ to US $, no transaction fees whatsoever.

Exchange is paid only on the original transfer from Canadian $ to US$, which we did when we started doing the snowbird thing, when the exchange rate was a lot better than it is at present. When those US $ are gone, we will have to pay the going rate or stop heading south.