Canadian credit cards in Canada with no foreign transaction fees save 3 to 5 percent

Val_C said:
Your math is correct, if you're OK with two things: 1. you subscribed to Rogers and can use 4% cashback to pay for their services and 2. You're not planning to return stuff bought in foreign currency. If you will return it, you will loose money, as you will loose your 4% cashback and will be hit with FX fees for the amount of return.
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On point #1, the way I read their marketing page, I should be able to use the reward money towards a variety of purchases. I don't have any Rogers subscriptions but it says other purchases are eligible.
 
adamg said:
On point #1, the way I read their marketing page, I should be able to use the reward money towards a variety of purchases. I don't have any Rogers subscriptions but it says other purchases are eligible.
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You are right.
I remember Rogers has a condition that cashback can be spent only on their services when they launched the card. Seems like it was waved later. Good for the Rogers customers.
 
wchou said:
I can provide some information for those of you that are interested in the credit cards from HSBC having worked there as an employee for 3 years and used these cards. IRG does not mention that in order to qualify for the World Elite Premier credit card you are required to be Premier with HSBC:

HSBC Premier is available if you:

Maintain combined personal deposits and investments with HSBC Bank Canada and its subsidiaries of $100,000, or
Hold a personal HSBC Bank Canada residential mortgage with original amount of $500,000 or greater, or
Have income deposits of $6,500 within a calendar month plus confirmation of $100,000 or more in assets under management in Canada, or
Qualify for HSBC Premier in another country

In addition, the HSBC Jade card is only available to you should you have over 1 million in deposits or investments with HSBC and are specifically invited by HSBC to become a Jade member.

The majority of those looking for a no foreign transaction credit would have to settle for the World Elite Mastercard which comes with an annual charge of $149.00, which in the credit card market is pretty steep.

So let me offer you guys a solution that I have used in the past for USD purchases. Apply for a USD mastercard that is offered by the big 5 in Canada. In my opinion the one from BMO is the best as you pay a $35 annual fee however if you spend over $1000USD/year the fee is waived. After you make your purchase on the USD mastercard, go to your bank and request a USD draft be made payable to your USD Mastercard number for whatever you owe. That way you control the foreign exchange rate and will be disclosed the exact amount for the conversion if you do it at that time. Take the draft to BMO and pay off your credit card. In addition, if you have any friends or family that work in any of the major financial institutions, you can request that they make the draft for you as they are employees and will pay closer to market trading rate. I've saved quite a bit doing this when I had my auto parts phase and could not stop buying auto parts. You now also have a USD credit card for if you travel to the states and want to transact in the currency. Hope this helps.
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I just found out that CIBC has a USD Aventura Gold Visa Card.



There is a $35 USD annual fee, but it would probably save me much more.

I also have a staff account there through my mother.

It's a toss up between it and the Home Trust Visa now.
 
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CIBC also has a "Smart Pre-paid Travel Visa" available in USD, Euros, UK Pounds, and Pesos. The card is linked to your bank account and you transfer money on it whenever you want to make a purchase in the foreign currency.

If I recall, there is a nominal one time setup fee ($10) but no annual fee.

Since it's a prepaid card, it's issued on the spot at the branch.
 
I find this whole thread hilarious. I’ve travelled extensively in the US and Europe. Never have I been surcharged for transactions. I use my BMO M/C like it’s a debit card. Anywhere that accepts domestic/local debit will accept my Canadian BMO M/C without further fees.
Matter of fact, I didn’t know that other banks charged as you are all describing that they do.
I feel pretty lucky.
Thank you
 
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jeepguy1 said:
I find this whole thread hilarious. I’ve travelled extensively in the US and Europe. Never have I been surcharged for transactions. I use my BMO M/C like it’s a debit card. Anywhere that accepts domestic/local debit will accept my Canadian BMO M/C without further fees.
Matter of fact, I didn’t know that other banks charged as you are all describing that they do.
I feel pretty lucky.
Thank you
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It is built into the exchange rate.
 
Check out the Scotiabank Passport Visa Infinite Card. NoFX fees, 6 Lounge passes plus all the usual insurance. Only no FX fee card issued by a Major Canadian Bank. All I use now. As we do a lot of travelling
ht tps://www.scotiabank.com/ca/en/personal/credit-cards/visa/passport-infinite-card.html

Includes travel insurance for 10 days for those over 65 too.

I gave up on the Home Trust Card. Difficult company to deal with. Crappy website, No tap. But is free.
 
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jeepguy1 said:
I find this whole thread hilarious. I’ve travelled extensively in the US and Europe. Never have I been surcharged for transactions. I use my BMO M/C like it’s a debit card. Anywhere that accepts domestic/local debit will accept my Canadian BMO M/C without further fees.
Matter of fact, I didn’t know that other banks charged as you are all describing that they do.
I feel pretty lucky.
Thank you
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That's because the exchange rate fees they charge are worked into the exchange rate at the time of conversion. For example, if market rate for trading USD to CAD is 1 USD = 1.3 CAD. Banks then charge you a conversion of 1 USD = 1.22 CAD earning them 8 cents on the dollar for this example, or whatever they deem they want to charge for the service depending on the institution. In addition to that, they may also charge you a 1-3% foreign transaction fee for accommodating the exchange. This separate fee is worked into the total charge on your statement and in my experience, is not always disclosed to the customers as a separate charge. Again, it depends on the institution. I don't know what Mastercard you hold with BMO, but during my time with HSBC which was a little over a year ago, BMO did not offer a credit card at any level without foreign transaction fees but perhaps they brought to market something like that during my absence. You should review your terms and conditions for your specific card as I suspect you have been paying for the surcharge this entire time without your knowledge. But yeah, it's pretty hilarious.
 
BoxerShorts said:
CIBC also has a "Smart Pre-paid Travel Visa" available in USD, Euros, UK Pounds, and Pesos. The card is linked to your bank account and you transfer money on it whenever you want to make a purchase in the foreign currency.

If I recall, there is a nominal one time setup fee ($10) but no annual fee.

Since it's a prepaid card, it's issued on the spot at the branch.
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Thanks!

It doesn't look like there's purchase protection on it though.

I've never used it, but it's a real nice feature to have.

It looks like CIBC also has a Air Canada Conversion Visa Prepaid Card.

You can load up to 10 currencies on it and there are no fees.



Click on picture to go to the site.
 
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Ruger007 said:
Check out the Scotiabank Passport Visa Infinite Card. NoFX fees, 6 Lounge passes plus all the usual insurance. Only no FX fee card issued by a Major Canadian Bank. All I use now. As we do a lot of travelling
ht tps://www.scotiabank.com/ca/en/personal/credit-cards/visa/passport-infinite-card.html

Includes travel insurance for 10 days for those over 65 too.

I gave up on the Home Trust Card. Difficult company to deal with. Crappy website, No tap. But is free.
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That looks nice, but it has a $139 annual fee.

I like that you can convert the reward points to SCENE points though. I don't travel much, but I do like to go to the movies.
 
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Val_C said:
You are right.
I remember Rogers has a condition that cashback can be spent only on their services when they launched the card. Seems like it was waved later. Good for the Rogers customers.
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Yes. I use my cash back for any eligible purchase, which seems to include almost everything

In total, I’ve redeemed nearly 2k so far and I don’t have any Rogers services
 
jeepguy1 said:
I find this whole thread hilarious. I’ve travelled extensively in the US and Europe. Never have I been surcharged for transactions. I use my BMO M/C like it’s a debit card. Anywhere that accepts domestic/local debit will accept my Canadian BMO M/C without further fees.
Matter of fact, I didn’t know that other banks charged as you are all describing that they do.
I feel pretty lucky.
Thank you
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I find it hilarious that you don’t know about the bank fees you’re paying
 
For those that are really savvy, there is also a way to convert large sums of CAD to USD without any commissions, just a $10 charge

You need a questrade brokerage account though
 
Onagoth said:
For those that are really savvy, there is also a way to convert large sums of CAD to USD without any commissions, just a $10 charge

You need a questrade brokerage account though
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My little rat ears are perked up.

Would that circumvent the bank exchange rate?

I plan on buying a house in the US as soon as I can find an affordable one (they're in another bubble again.)

I'd be looking at converting Canadian dollars into about three hundred grand USD.

Here's some examples of the foreign exchange rates of Canadian banks and Knightsbridge:

RBC – Royal Bank of Canada....2.60%
TD – Toronto Dominion Bank....2.64%
BMO – Bank of Montreal..........2.65%
CIBC – CIBC Bank..................3.34%
Scotia – Scotia Bank..............2.88%
HSBC – HSBC Bank.................2.10%
Desjardins.............................2.49%
KnightsbridgeFX.......................0.8%
 
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MapleSugar said:
My little rat ears are perked up.

I plan on buying a house in the US as soon as I can find an affordable one (they're in another bubble again.)

I'd be looking at converting Canadian dollars into about three hundred grand USD.
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It involves buying an interlisted stock in CAD, having the broker journal it over to a US exchange, and then selling the stock for US$. Only fees paid are on the purchase and sale of the security, which Questrade charges $4.95....but in your case, the fees might come out closer to $20 (since you'll be buying a large amount of shares)

The technique is called Norbert's Gambit. I've used DLR.TO for this in the past, since that is a very liquid ETF that trades on both the TSX and NYSE

However, if you do this for very large sums of money, there are caveats

1) You'll be subject to price fluctuations in the US dollar if you use DLR.TO...this can change your proceeds and result in taxable gains if you do it in a taxable account.
2) It takes time to execute (minimum 4 days for trade settlement, plus around 2 days for Questrade to do the journal)
3) The price difference between DLR.TO and DLR may not be exactly the prevailing exchange rate.
4) There are specialty houses for converting currency that use way better rates....this is worth looking into as well

Also, I've never actually withdrawn the USD. Questrade may apply additional fees for this. Usually when I do this technique, it's to invest in US listed securities. However, I can't see any fees being even remotely close to the expected $7,500 you'd paid to a bank to convert CAD/USD.
 
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Sorry...there is one other fee built into this technique that I failed to mention, and that's the spread on both DLR.U and DLR.TO. However, when you choose a very liquid actively traded security, the bid/ask spread is usually quite low. Can't remember exactly, but it'll only be 1 or 2 cents per share....this might be a couple hundred dollars on both the way in and out.

But I checked out my trading history....I did this for $15k in 2019 and the fees amounted to about $20, plus whatever spread there was....but either way it was way better than the $375 I would have paid doing it the conventional way.
 
Onagoth said:
It involves buying an interlisted stock in CAD, having the broker journal it over to a US exchange, and then selling the stock for US$. Only fees paid are on the purchase and sale of the security, which Questrade charges $4.95....but in your case, the fees might come out closer to $20 (since you'll be buying a large amount of shares)

The technique is called Norbert's Gambit. I've used DLR.TO for this in the past, since that is a very liquid ETF that trades on both the TSX and NYSE

However, if you do this for very large sums of money, there are caveats

1) You'll be subject to price fluctuations in the US dollar if you use DLR.TO...this can change your proceeds and result in taxable gains if you do it in a taxable account.
2) It takes time to execute (minimum 4 days for trade settlement, plus around 2 days for Questrade to do the journal)
3) The price difference between DLR.TO and DLR may not be exactly the prevailing exchange rate.

Also, I've never actually withdrawn the USD. Questrade may apply additional fees for this. Usually when I do this technique, it's to invest in US listed securities. However, I can't see any fees being even remotely close to the expected $7,500 you'd paid to a bank to convert CAD/USD.
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Onagoth said:
Sorry...there is one other fee built into this technique that I failed to mention, and that's the spread on both DLR and DLR.TO.

But I checked out my trading history....I did this for $15k in 2019 and the fees amounted to about $20....which is way better than the $375 I would have paid otherwise.
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Thanks! I'll look into it.
 
MapleSugar said:
Thanks! I'll look into it.
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I’ve done something similar with TD; think it was a money market fund available in both US and Canadian

But I would advocate for Home Trust VISA. For the occasional foreign purchase, it’s a lot easier than the rigamarole of setting up accounts with the banks, etc etc.
 
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