Nothing beats the excitement of travel, whether you’re a first-time jet-setters or regular globetrotter. There’s something about stepping off that plane onto unknown territory that awakens our senses and gives us a taste of the amazing things to come.
You slap your credit card on the table, swipe it at the station, run it through the hotel desk and use it for that luxurious spa treatment which always seems so much cheaper in a foreign country.
You bask in the delight of new experiences, taking it all in and spending money on wonderful memories…
What are foreign exchange transactions Fees?
Unfortunately, the downside of travelling with a credit card is the high premium charged on foreign exchange transactions.
Most of the time, fees roll off without the cardholder realising how much they’re paying in total.
Understandably, the fees associated with foreign exchange transactions are not commonly advertised by credit card companies. It’s often a substantial price to pay on top of the exchange rate itself, which is usually out of your control while making the transaction.
Unsurprisingly, most credit cards charge foreign exchange fees. It often results in a whopping 2.5% extra charge, quietly deducted from your account while you’re still high on wanderlust. For regular, or longer-term travellers, these sneaky foreign exchange fees can rack up a sizeable credit card bill by the time you’re done.
Canada’s top 4 credit cards with NO foreign exchange transaction fees
|Card||Cash Back||Foreign Transaction Fees|
|Rogers Platinum Mastercard||4%||No|
|Home Trust Preferred Visa||1%||No|
|Scotiabank Gold American Express||4%||No|
The good news is there are Canadian credit cards offering zero fees on foreign exchange transactions, along with other benefits. Here are 4 great credit cards on the Canadian travel radar:
1. Fido Mastercard
Promising no annual fee and guaranteeing a $25 cash-back rewards bonus with your first purchase (in the first three months after opening your account), Fido Mastercard is similar to its competitor, the Rogers Platinum Mastercard.
The cash-back on purchases made abroad sits at an even 4%, and local purchases at 1.5% return. The Fido Mastercard still charges the regular 2.5% fee on foreign exchange. The $25 bonus during the first 3 months is a great incentive when you’re linking the Fido bill for pre-authorized payments.
2. Rogers Platinum Mastercard
Like the Fido Mastercard, there’s 4% cash-back on foreign currency purchases and you pay the 2.5% fee on any foreign exchange transactions. There is an annual fee for the card ($29 currently), however, this is not applicable once you’ve linked your monthly bill to the pre-authorized payments schedule.
Like the Fido MasterCard, there is a rewards bonus of $25 with your first purchase (in the three months after receiving your credit card).
Offering a slightly higher return on other purchases at 1.75%, Rogers Platinum MasterCard encourages regular Rogers patrons to offset their foreign fees with cash-back rewards. These rewards can decrease your monthly bill.
3. Home Trust Preferred Visa
The final competitor for best travel is the Home Trust Preferred Visa. It gives 1% cash-back rewards on all spending (unlimited). It also offers free Roadside Assistance for cardholders. Unfortunately, Quebec residents don’t qualify for the Home Trust Preferred Visa card.
The main competitive advantage is, of course, the Home Trust Preferred Visa foreign exchange policy. It stands out in the Canadian credit card arena as the only card currently offering freedom from foreign exchange transaction fees and no annual fees. That’s right! No foreign exchange transaction fees.
4. Scotiabank Gold American Express
When you can’t escape foreign exchange fees, the only alternative is to work the system from the other direction. Currently, the only other credit card in Canada recommended for savvy travellers is the Scotiabank Gold American Express card. It’s the most attractive option for its offsets.
Offsetting nasty fees is possible through a cash back rewards program on the Gold American Express. American Express, Visa, and MasterCard rewards differ by location and offer comparable category codes per product. No matter the structure, there are benefits to earning offsets both locally and while travelling abroad.
Rewards cover spending on groceries, entertainment, gas, and a few miscellaneous items. These areas offer 4% return on purchases, compared to just a 2.5% charge on foreign exchange transactions. A little push in the right direction, coupled with the 1% earned elsewhere, makes the offset viable for even the most open-handed tourists.
Choices, choices, choices…
Travel is a privilege desired by many but afforded to few. Here, you can take advantage of 4 great offers outlined in the credit cards above. Fido and Rogers are competing for customers, but still maintain the pesky fee on foreign purchases. But, the cash-back rewards do have the potential to offset costs quite effectively for savvy cardholders.
The Home Trust Preferred Visa card stands out among its peers, with no annual fees or foreign transaction fees – it’s a unique product on the market currently. Lastly, Scotiabank Gold American Express is competitive for day-to-day use and offset well by handy cash-back rewards.