Canadians love to beat the cold winter climate and travel to sunnier destinations. Vacations to the U.S. and abroad means dealing with foreign currency – something that’s become easier as more and more travellers use credit cards. You might think your credit card provider is doing you a favour by converting your foreign purchases back into Canadian dollars, but think again.

Nearly all Canadian credit card issuers charge a 2.5% fee for foreign currency conversion, a stiff penalty that negates any rewards you might have earned on your trip. So what’s a traveller to do?  Luckily, there are two great credit card options for Canadians who are looking to save money on foreign travel and on items purchased through foreign retailers.

Best Credit Cards for Travelling Outside of Canada

Chase Canada

Since entering the Canadian credit card industry back in 2005, Chase Card Services – a division of U.S. giant JPMorgan Chase – has been nothing more than a niche player.  But in 2012, Chase did something fantastic: it removed the currency conversion fee on its Sears Financial Voyage MasterCard, Amazon.ca Rewards Visa, and Marriott Rewards Premier Visa.

But Chase decided to end its decade-old partnership with Sears Canada later this year, so that means come November 15th, 2015 it’s bon voyage for Voyage MasterCard customers.  That’s okay, because Chase still has two cards worth a closer look:

Amazon.ca Rewards Visa

The Amazon.ca Rewards Visa is one of the hidden gems in the Canadian rewards credit card market. This no-fee card pays two points for every purchase made through Amazon.ca and one point for purchases made anywhere else. You’ll get a $20 Amazon.ca gift card just for signing up, and every 2,000 point earned will automatically get redeemed for a $20 statement credit.

As mentioned, the best feature is that foreign currency transactions are converted at the exchange rate set by Visa, without additional surcharges. The card won’t work in the following countries: Burma (Myanmar), Cuba, Iran, North Korea, Sudan, Syria and Libya.

*Update: Chase Canada has closed the Amazon.ca Rewards Visa to new applicants as of April 3, 2017.

Marriott Rewards Premier Visa

This hotel rewards card is one of the richest in Canada. Here’s a rundown of all the benefits:

You’ll get 30,000 bonus points after your first purchase. That’s good for 4 free nights at a category 1 hotel. New sign-up’s will also get an additional free night stay. Altogether that’s five free nights at a category 1 hotel, or four free nights at a category 2 hotel.

Each year on your card anniversary you’ll get an additional free night stay at any participating category 1-5 hotels. You’ll also get 15 Elite Credits toward your Marriott Rewards Elite membership level, guaranteeing you Silver Elite status or better.

The $120 annual fee is waived in the first year.

Earn 5 points for every dollar spent at Marriott locations worldwide, 2 points for every dollar spent on airfare, car rentals, and restaurants, plus 1 point for every dollar spent everywhere else.

The Marriott Rewards Premier Visa is the only hotel travel credit card in Canada with no foreign currency transaction charges in addition to the exchange rate.

Final thoughts

Foreign currency conversion fees are often hidden within your credit card statement – blended in with the exchange rate so you don’t even notice you’re paying an extra 2.5% on your purchases.  But don’t kid yourself – these charges add up in a big way.

It’s tough to earn 2.5% back on your spending – even with a premium rewards card. With the Amazon.ca Rewards Visa and the Marriott Rewards Premier Visa, Canadian travellers will not only save 2.5% on their foreign purchases, they’ll also earn healthy rewards on their spending.

I’ve tried to optimize my rewards so that I can extract the most value out of the programs I use every day. Each card in my wallet serves a specific purpose, whether it’s to help save money on my grocery and gas spending, or to build up travel rewards to fund my next vacation.

Rewards cards and loyalty programs make it easy for you to spend money and earn points – but what the brochure says you can earn and what you actually redeem can be miles apart. Let’s look at three examples:

The Shoppers Optimum Program is one of the top loyalty programs in Canada but its tiered redemption structure can make it difficult to maximize the value.

Since Shoppers Optimum points are redeemed on a sliding scale, the more points you accumulate, the greater the value.

• 8,000 points = $10 off next purchase (1.25% rebate)
• 22,000 points = $30 off next purchase (1.36% rebate)
• 38,000 points = $60 off next purchase (1.58% rebate)
• 50,000 points = $85 off next purchase (1.70% rebate)
• 95,000 points = $170 off next purchase (1.79% rebate)

Research into consumer behaviour suggests that it’s nearly impossible to turn down an instant reward, so once a Shoppers Optimum member reaches the 8,000 point threshold, chances are good that he or she will cash in right away. That turns a potentially lucrative rewards program into just an okay rewards program.

I’ve written before about the Capital One Aspire Travel World MasterCard and its tiered redemption structure. It takes careful planning to get full value from this program, especially when redeeming for less than 60,000 points – or $600 in equivalent travel.

That’s because the travel you purchase must total exactly $150, or $350, or $600+ in order to get the full 2% return with the Aspire Travel Card. It’s not difficult to do – just ask the merchant to split your charges in two so that one equals the required amount – but it’s something you must always keep in mind with this program.

One of my favourite rewards cards is the Scotia Momentum Visa Infinite – the top cash back card in Canada. It pays 4% cash back on your grocery and gas purchases. But hold on – how do you know which stores qualify for the higher cash back rebate?

Scotiabank published a chart listing popular retailers according to merchant code. Note that Wal-Mart does not qualify for the 4% cash back rebate.

A closer look at my statement last month revealed something odd with my gas purchases. A nearby Esso location qualified for 4% cash back when I paid at the pump with my Visa, but when a problem at the pump forced me to pay inside at the Mac’s Convenience Store the purchase showed up with just the standard 1% back.  Sneaky!

Final thoughts

It pays to examine the details of your rewards programs to make sure that you’re getting top value when it comes to earning and redeeming points.

Related: How I cashed in on credit card rewards this year

Pay careful attention to your statement and to how certain purchases get categorized. Resist the urge to claim an instant reward – particularly if there’s a more generous offer waiting down the road.