Virtually every bank and credit card issuer card in Canada charges a 2.5 percent fee to convert your foreign purchases back into Canadian dollars. It’s an insidious charge, often hidden within your credit card statement and blended in with the exchange rate so you don’t even notice.
While seemingly benign, a 2.5 percent foreign currency conversion fee represents a significant cost to those who frequently travel to the U.S. or abroad, or who shop online in U.S. dollars and other foreign currencies.
Savvy credit card users can avoid these sneaky fees by carrying a ‘no foreign currency conversion fee’ card. With that in mind, here are three credit cards to save on foreign currency fees.
The No Fee, No Frills Option
Home Trust Preferred Visa Card
Home Trust is a subsidiary of Home Capital Group and offers a no annual fee cash back card that does not charge foreign currency conversion fees.
The Home Trust Preferred Visa Card gives users 1 percent cash back on every purchase, with no limit to their total rewards and no restrictions on where they earn rewards. Customers also get a Roadside Assist membership at no extra charge.
All foreign purchases are converted at the spot rate set by Visa without any additional charges.
Interested applicants should be aware that applications for the Home Trust Preferred Visa Card may take two to four weeks to be approved.
The Perks and Points Option
Scotia Passport Visa Infinite Card
Scotiabank became the first major Canadian financial institution to offer a no foreign transaction fee credit card earlier this year when it launched the Scotia Passport Visa Infinite Card.
Cardholders earn two Scotia Rewards Points for every dollar spent on groceries, dining, entertainment purchases, and daily transit purchases, plus one point on all other purchases.
In addition to not being charged a foreign currency conversion mark-up on foreign currency purchases online or outside of Canada, this card also offers airport lounge access with a complimentary Priority Pass membership and six free visits per year.
This card does charge an annual fee of $139 and successful applicants must have a minimum annual income of $60,000 or a minimum household income of $100,000 to qualify for the card.
The ‘It’s Complicated’ Option
Fido MasterCard by Rogers
One other credit card option available to Canadians looking to save on foreign currency conversion fees is the Fido MasterCard by Rogers Bank.
While this card does charge the standard 2.5 percent mark-up on purchases made in a foreign currency, it also pays a healthy three per cent cash back on those purchases to negate the fee and then some.
Not just limited to Rogers or Fido customers, this card comes with no annual fee and pays 1.25 percent cash back on Canadian dollar purchases.
Fido customers do get added perks, with 2 percent in unlimited cash back rewards on Fido products and services charged to the card. Customers can also put their cash back rewards towards their monthly Fido bill or save them up for other Fido accessories.
Finally, successful applicants will get a $25 cash back bonus when they make their first purchase within three months of card ownership.
Consider the number of credit card users that go out of their way to earn an additional one or two per cent worth of cash back or travel rewards on their spending. Yet Canadians spend billions each year traveling to the U.S. and abroad, plus billions more shopping online at foreign retailers, unknowingly paying hidden fees each time they do so and negating any rewards advantage in the process.
That’s why, if you do plan to make significant purchases in U.S. dollars, or other foreign currencies, then it’s wise to carry a credit card that does not mark-up the cost of those purchases by 2.5 percent.
Small business owners looking to maximize their rewards from everyday business purchases should look no further than the American Express Business Gold Rewards Card. In this review I’ll highlight several reasons why this card should be considered one of – if not the – strongest business rewards credit cards on the market today.
One major advantage the American Express Business Gold Rewards Card has over other small business credit cards is the fact that it’s actually a charge card, not a credit card. What that means is that charge cards don’t come with a pre-set spending limit. While you won’t have unlimited spending power, with a charge card you can put through more expenses during one statement cycle. That has the potential to earn you big rewards. That said, it’s important to note that charge cards must be paid off in full when the balance is due or face a hefty 30 percent fee.
Here’s a look at the rest of the features that sets the American Express Business Gold Rewards Card apart from its competitors:
American Express Business Gold Rewards Card review
Why is this card such a powerhouse? Three reasons:
1.) You can earn a welcome bonus of 40,000 Membership Rewards points (with a referral) when you charge $5,000 worth of purchases to your card within the first three months.
2.) The $250 annual fee is waived in the first year, along with the $50 supplement card fee.
3.) Membership Rewards are arguably the most valuable points currency on the market, with the flexibility to transfer points 1:1 to frequent flyer programs like Aeroplan and Avios.
In addition, American Express Business Gold Rewards Card members will receive the following benefits:
- 1 Membership Reward point for every dollar in purchases.
- One extra point for every dollar charged to the card at three suppliers you pick from a list of select American Express merchants in Canada.
- Earn a referral bonus of 10,000 Membership Rewards points for each approved referral.
- Disability plan for small business
- Employee card misuse protection
Plus a host of travel insurance and protection, including:
- Travel Accident Insurance up to $100,000
- Car Rental Theft and Damage Insurance
- Flight Delay and Baggage Delay Insurance
- Hotel Burglary Insurance
- Travel Emergency Assistance
- Lost or Stolen Baggage Insurance
Unfortunately it does not come with Emergency Medical Insurance, Travel Medical Concierge, Trip Cancellation Insurance, or Trip Interruption Insurance, but if you want those features then consider upgrading to the American Express Business Platinum Card.
Membership Rewards points
I’ve shown you why small business owners should be all over the American Express Business Gold Rewards Card. The 40,000 Membership Rewards points sign-up bonus (with referral link) beats the normal offer of 30,000 points when you spend $5,000 in the first three months. Once you reach the minimum spending threshold you’ll have at least 45,000 Membership Rewards points at your disposal.
If you’re like me, you’ll want to transfer those Membership Rewards Points to Aeroplan, which you can do on a 1:1 basis. 45,000 Aeroplan miles is worth roughly $900 in flight rewards, using an attainable return rate of 2 cents per mile.
You won’t find another credit card on the market that will give you $900 worth of travel rewards value with no annual fee in the first year. And that’s why the American Express Business Gold Rewards card should be a staple right now in every small business owner’s wallet.
As a small business owner myself I took advantage of this offer earlier in the year and have already earned my 40,000 Membership Rewards points bonus. I referred myself from my American Express Platinum Card to earn the additional bonus.
If you’re interested in signing up for the American Express Business Gold Rewards Cards you’ll want to use a referral link, too, and mine will provide you with the extra 10,000 bonus points that really puts this card over the top.