Three Credit Cards To Save On Foreign Currency Fees
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.
Final thoughts
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.
Home Trust Preferred VISA approval times are much longer than suggested. It took 2.5 months with a visit to their office at King & University in Toronto, made after waiting as long as an hour on their info line for someone to pick-up….and no one ever did. Now approved, and having used the card, the Statement presented is pale imitation of the now defunct Amazon.ca VISA (eg, no conversion rate is given) and HTC have contracted out the whole statement operation to some outfit in the US. One cannot receive an emailed statement, which clearly is useful if travelling (kind of the raison d’être for having the card), but rather you have to log on to the website. OK, for a no-fee basic card, but the Scotia Passport is all-round a much better product, even with the fee.
Agree the length of time for approval seems overlong. I also applied in February and got the card in June. Much more concerning is that the cards spending limit is under what I already have w other institutions AND there is a 15 transactions a day limit. On a trip where you are buying meals and drinks and other items, I could see this being a bigger problem. Will have to see.
I applied in February for the Home Trust Visa, and I still don’t have it, nearly 4 months later, I have serious doubts if this is even a reputable company. It should not take that long to process an application.
Home Trust was not available in Quebec
I applied for the Home Trust card in February and got it late May, but my friend applied for one more recently and got it in 6 weeks so they’ve certainly sped up the process.
My TD Visa went up to 3.5% foreign currency conversion fee so that card definitely wasn’t one I was willing to travel with anymore.
My only gripe with the Home Trust card is you can’t yet change the PIN. Memorizing a PIN I didn’t make myself isn’t all that easy for me. When I phoned Home Trust, they said we should be able to change PINs some time in the fall.
I applied for the Home Trust card in late January for a trip my wife was having in April. It was to replaced the defunct Amazon Visa card. Despite getting an email that I will get it in 4-6 weeks and getting the same answer when I called, I finally received the card in mid-May by which time I had already given up hope on it. I have used in once and I have not received my first statement yet. Contrast this with my application for an RBC Rewards Visa card around the same time (mainly for discounts on buying gasoline). I received the RBC card in about one week.
Have you looked at the new Brim Financial MasterCard? Non bank credit card that gives bonus points for online and streaming services. Can’t really find out too much myself but saw a promo on my Amazon app.
@Frito – I’d avoid Brim. Supposedly thousands of people have signed up for the card, which was supposed to be released in April, and still don’t have it. Now I understand they are changing terms and conditions as they go. For example, they won’t be using MasterCard’s spot-rate on foreign exchange – they’re using their own rate. Seems suspicious. Their rates might be worse than MasterCard’s, which makes the 0% mark up a moot point.
Lots of people complaining about hidden fees and other gotchas in the fine print. Check out Red Flag Deals and Reddit Personal Finance Canada for more info – but I’d steer clear of this one.
Home Trust Preferred VISA – applied in early March, and after much prompting with emails and phone calls I finally got approved in late July. Not sure how reputable this company will be with taking that long to approve a credit card to someone with 800+ credit rating. Most other credit cards are approved within days – not 4+ months.
Applied for Rogers card as last year it was offering a slightly better deal than Fido card. With the recent change both cards are pretty much the same but at least I get 0.5% to the good after foreign exchange is covered, no fee, a decent credit limit, and the statements are very easy to follow.
Happy with the simplicity and no fee.