Credit Cards With No Foreign Currency Conversion Fees. What Are My Options?
Amazon.ca Rewards Visa and Marriott Rewards Premier Visa cardholders recently received a letter from their card issuer, Chase Canada, advising that these cards will be deactivated as of March 15th, 2018.
It’s a disappointing, but not surprising exit for Chase, which sold its Sears MasterCard portfolio and related credit card operations; including a call centre, to Scotiabank in 2015, and then closed the popular Amazon.ca Rewards Visa to new applicants in April 2017, and finally closed the Marriott Rewards Premier Visa to new applicants last fall.
Although Chase only managed to carve out a small credit card portfolio in Canada, its cards were popular for one reason – they didn’t charge an extra fee when converting foreign currency transactions back into Canadian dollars. Virtually every other card issuer in Canada charges a 2.5 percent fee to convert your foreign purchases back into Canadian dollars. Talk about price fixing!
It’s an insidious fee, often hidden within your credit card statement and blended in with the exchange rate so you don’t even notice you’re paying an extra 2.5% on your purchases.
Credit Cards With No Foreign Currency Conversion Fees
So, now that Chase has tucked tail and run back south, what credit card options do Canadians have to avoid foreign currency conversion fees? I’m talking about trips to the U.S. and abroad, or online shopping in U.S. dollars. What’s a savvy Canadian to do?
Several readers reached out to ask the same question:
“I wonder if you can help me. Recently I received a notice from Amazon / Chase Bank, that they would be ending their Visa Card on March 15. I like this card because it has no annual fee and does not charge foreign exchange fees when I travel outside of Canada. I have yet to find another card without FX fees. Do you know of any that I may want to look at?”
Great question and I’m happy to answer it. The truth is I’m in the same boat myself. I was also an avid user of the Amazon.ca Rewards Visa, and the closure of this card has me looking for another ‘no foreign exchange fee’ solution.
I scoured the Canadian credit card market and came up with two options for credit cards with no foreign currency conversion fees.
Home Trust Preferred Visa Card
Home Trust is a subsidiary of Home Capital Group (yes, that one). It offers a similar card to the Amazon.ca Rewards Visa that I think you’ll like. It’s called the Home Trust Preferred Visa Card.
This credit card has no annual fee and pays 1 percent cash back on every purchase, with no limit to your total rewards and no restrictions on where you earn our rewards. You also get a Roadside Assist membership at no extra charge, and of course, what we’ve been looking for, no foreign currency conversion surcharges.
Your foreign purchases are converted at the spot rate set by Visa without any additional charges.
Learn more about the Home Trust Preferred Visa Card and apply online here.
Rogers Fido MasterCard
There’s another credit card that can deliver what we’re looking for when it comes to foreign purchases and that’s the Rogers Fido MasterCard. This card tackles foreign transactions a bit differently – by boosting the rewards you earn on foreign purchases to 4 percent.
Indeed, the Fido MasterCard still charges an extra 2.5 percent to convert your purchases back into Canadian dollars, however it’s the only card on the market that pays 4 percent cash back rewards on all purchases in a foreign currency – from international websites to anywhere you travel outside of Canada.
What’s more, there’s no annual fee and you earn 1.5 percent cash back on all Canadian dollar purchases.
Redeem your rewards for Rogers or Fido services such as a new phone, monthly billing, or online purchases at fido.ca. Or, you can instantly apply a minimum of $20 in rewards towards eligible purchases you’ve made in the last 30 days with the MasterCard ‘Pay with Rewards’ app. Finally, you can request a statement credit once per year from Rogers in December to be applied in January.
Learn more about the Rogers Fido MasterCard and apply online here.
Final thoughts
For me, the Amazon.ca Rewards Visa filled a small but important role as my go-to card for any foreign purchases such as travel into the U.S. or abroad, or online purchases in U.S. or other foreign currency. Like many of you, I’m sad to see it go – it truly was a hidden gem in the Canadian credit card market.
But after surveying the market, I’m confident either the Home Trust Preferred Visa or the Rogers Fido MasterCard can fill the void left behind by Chase as the top credit cards with no foreign currency conversion fees.
Leave a comment below and let me know which one you prefer.
Please let readers know Home Trust is not available to Quebec residents.
Damn! I was just going to apply. Thank you for that info.
Thanks Charles, always important to know, but frequently overlooked. My apologies.
Robb:
What about a US Dollar (Visa) card?
I have a TD US Dollar Visa. Unless my understanding of how this card works is wrong, it goes like this. Charges in US Dollars accumulate on the card. Periodically, the moment of truth arrives in the form of my statement!
In essence, I then buy US Dollars from the bank fo pay my account. I realize I am at the bank’s mercy so far as the exchange rate is concerned, but from my spot-checking of rates charged they appear to be close to (at?) their current rate of exchange as at the date of purchase. Again, unless I miss something … no 2.5% – or whatever iniquitous rates others addon – is charged
I will be interested in any comments from others as to the validity of my approach or even suggestions of superior results. (What I am really looking for is a card which does not require me to pay my statement!!!)
Sadly there is no Credit Card which does not require payment either partial or in full. I have held the TD USD Credit Card for years and it comes in handy when going back and forth to the US. If you do not have some form of USD income such as monthly Dividends the best exchange rate vice going to the bank is through Brokerage Account such as TD Waterhouse as it will always beat the bank exchange rate. Buying dollars online is the best way to go as they post an exchange rate for one minute and if you time it properly you can easily save yourself a couple of percent when buying USD.
Robb, that is exactly what I have: TD US dollar Visa card with a US checking account at TDCanada Trust, called ‘Borderless’….Once in a while I exchange Cdn dollars into US dollars (like right now, the exchange being better than it has been for a while) and pay my US dollar Visa with that. I agree with you that the exchange the bank applies is good, not the Bank of Canada rate, but good.
The TD Borderless account is excellent. The TD US dollar card is great. We bought US dollars in 2007 when our dollar was worth $1.10 and the US dollar was .90. As long as one keeps $5000.00 in the US account, there are no service charges. We travel several times a year to the US, so it is worthwhile to have this card. When our statement comes in, we pay out of that account. We have been fortunate enough to keep the account over what is required. We haven’t had to buy US dollars yet.
@David French, buying US Dollars at your bank is worse than paying the 2.5% conversion fee. At least with the credit card, the exchange rate Visa uses is far more favourable than the retail rate charged at your local bank. When you buy US Dollars at your bank, the fees are built into the rate. You will do much better getting a credit card which does not charge a conversion fee.
This is my understanding as well. The Visa spot rate, for example, is more favourable and so the benefit of using a credit card that does not charge the standard 2.5% fee for converting foreign currency back into Canadian dollars is quite significant. Then get an extra 1 percent cash back reward for your purchases and you really come out ahead.
Heading down south the day before the Amazon card expires, so applied for Home Trust as soon as I got Amazon’s letter. Two friends have done the same.
Well done, Marc!
Thanks Rob for the heads up about Home Trust and RogersFido cards. I too was disappointed when I received the notice about the closure of the Amazon Rewards card. It was a great card to have when travelling abroad!
@Dr. Networth – My pleasure. I got the letter, and quite a few emails from readers shortly after!
I think the Home Trust Preferred Visa makes a fine replacement.
Thanks for this Robb. I’m a little ticked! I’ve had the Rogers MasterCard for about 3 years now. At the time I got it there was and still is a $39.00 yearly fee which is waved if you charge your Rogers bill to the account AND no 2.5% foreign transaction fee! Now I find out there IS a 2.5% transaction fee but 4% in rewards for foreign currency charges. We use our rewards for new phones, tablets etc. but I think Rogers is being a little sneaky. We also had the Amazon Visa but that’s gone so we will have to give the Home Trust Visa some thought but Visa is not accepted at Costco.
It is my undertanding that COSTCO stores (in PV, MX) will not accept it’s own Canadian issued MasterCard!
Has anyone else experienced this?
Mine wasn’t accepted at Costco in Seattle last year: it was OK as proof as membership but I had to pay with a Visa. (The Amazon Visa that I’ll no longer have!)
My wife just used hers in PV the other day. No issues
Hi Gary, if I recall you had the Sears card as well until that got shuttered so you’ve had some bad luck with these cards!
Maybe the Tangerine Moneyback card would be worth a look for you – a no-fee card with some decent rewards, plus it’s a MasterCard.
Thanks Robb. I’ll check that out.
I use BMO US MasterCard, no annual fee. Use Knightbridge Exchange to purchase USD from BMO account and credit card charges are taken from my BMO USD chequing account. Knightsbridge guarantees the lowest conversion rate when buying USD.
Hi Judy, I hear Knightsbridge is great for buying larger amounts of USD.
Echo, Today BMO investorline rate was 1.2478 and Knightsbridge was 1.2409. I use them for all amounts of currency, dollar cost averaging , but the larger the amount the more the difference.
There are no annual fees on the TD Borderless account as long as one keeps a minimum balance of $5000.00 in the Borderless account or $5000.00 in the US account. We have never paid fees for this account.
We travel to the US frequently for the weather. We have a “Borderless” bank account, but I find their “preferred” exchange rate with that still high compared to using our investing brokerage which has a negligible mark-up.
We have a USD investment account in addition to our CAD investment account and just transfer money from CAD bank –>CAD investment –> USD investment –> USD bank account. We use a USD TD VISA for our spending and then just pay it off from our USD bank account when it comes due.
It is a bit of a round-about technique, but I despise fees and we are not exactly the most disciplined spenders of USD. So, it is worth the few extra minutes it takes me to do this for us.
@Loonie Doctor – That sounds like a pretty reasonable solution if you spend a lot of time in the U.S.
I have applied for the HT Visa because it offers cash advances for 1.5% versus 1% for amazon Chase. I use it to get Euros in Europe every year because we go for a month.
How long did it take for you to get your approval when applying for this card? I applied a few weeks ago and we are leaving for Europe on May 13th, I’m hoping everything is cleared before we leave.
Hi, I applied for the Rogers Fido Mastercard last week and I already received it… about 10 days is all it took. Being in Quebec, it seems to be the only decent choice available.
Another option could be the CIBC Air Canada AC Conversion card which is a prepaid VISA card that holds up to 10 currencies. The exchange rate is lower than banks. I checked this evening and the US-CA rate is 1.2572 vs 1.2707 at TD Bank, a 1.35% savings. If the CAD falls after you load funds, you’ve already got a locked in rate.
I grow weary having to read about all the “small” fees the banks nail us with. I haven’t traveled to the states lately, although my wife does order things from Amazon.com (delivered to a US pickup Address), and I did notice the fees then (and then forgot). I’d like to thank you Robb for pointing this out, but it is kind of like thanking you for telling me I have been wandering around with my fly down :(.
Keep blowing the whistle (much like the refs do on the Browns).
We have had a TD Visa Infinite card for quite a few years now, it has a high annual fee but you are required to keep $5000 in an account to get the benefit of no card fee, no currency conversion fees, a free second card and also with other benefits. We are lucky that we have not needed the $5000 and that we have used the card often over the years with no exchange fees. Only one time they charged us conversion fees, when we challenged this our fees were refunded.
I don’t know if it is still available but would be worth checking out if interested.
There’s a slight difference between the Rogers credit card and the Fido credit card. I would encourage you to look at both and pick the one that’s right for you. I just picked the Fido one recently and it’s mostly because of the additional $25 plus $25 promo. Good luck!
The Rogers platinum MasterCard is arguably better in that it pays the 4% on foreign transactions, but pays 1.75% on all other purchases, a bit more than the Fido card… Catch is there’s a $29 annual fee, although this is waived if you pay your Rogers bill monthly on the card…
A little off topic – but now that Sears has left Canada how do we close out our Sears credit card? Is it automatically cancelled? Can it still be used at Sears in the U.S.?
@John, for the TD US Borderless Plan, fyi, it’s $3,000 U.S. (vs. $5,000 U.S.) minimum monthly balance for fee rebate, so may be you have a larger cushion, to avoid monthly fees!
@jjmoran, no currency conversion fees with a TD Visa Infinite Card?
@Echo, my understanding is that both TD Visa First Class Travel and TD Aeroplan Visa Infinite have 2.5% Foreign Currency Conversion fees
Does anyone know of a ‘no foreign exchange fee’ credit card avaiable to residents of Quebec?
Hello. I just called Fido / Rogers Mastercard and they said that they now have a foreign exchange fee of 2.5%. Could someone who has purchased recently (February 2018) check their statement?
@Sharon – Indeed, the Fido MasterCard still charges an extra 2.5 percent to convert your purchases back into Canadian dollars, however it’s the only card on the market that pays 4 percent cash back rewards on all purchases in a foreign currency – from international websites to anywhere you travel outside of Canada.
For me, it’s a tossup between HT and Fido (need one but haven’t applied yet). I don’t use Rogers services so I’d have to remember in January to get the Fido credit for the 4%.
The $25 bonus from Fido is nice (none from HT). Another $25 if you have Rogers on pre-pay with the card.
Downside to the HT Visa though is you cannot change the pin (you can with Fido). You have to use the one HT sends you.
If you have to change it, you have to pay $9.99 for a NEW card and with that, HT sends you a new PIN. Again, you can’t change it to what you would like it to be.
There is talk that HT will implement a user pin change later this year but that’s not confirmed if/when it will happen.
For the above reasons, I’d go with Fido.
So, I applied for the Fido card on Monday 26th. I got the email saying I was approved two days later (on the Wed). Two days!!
Card takes 7-10 business days to arrive.
I am really sorry to see the Amazon.ca Visa card go. I liked the card, particularly since I was able to apply for it online and be approved within 5 minutes. I applied for the HT Visa card on February 15 thinking there would be a similar process. No such luck. I was told it would be 10 – 14 days. When I called March 5 I got the following message: “Pleased be advised that we are experiencing higher than usual call volumes. If you are calling about Visa card applications, the time required will be four to six weeks.” What a rinkydink operation. In an electronic financial environment, 4 – 6 weeks to get a simple credit card is unacceptable.
There is a new one, BRIM – brimfinancial.com. No FX fees.
We’ll see if it sticks around.
Hi Sami, thanks for this. Brim looks interesting and it looks like they’ll be partnering with Amazon – a nice replacement for the Amazon.ca Visa perhaps.
Scotia also released a new one this week – the Scotia Passport Visa Infinite card – with no FX markup. It’s an annual fee card though, so keep that in mind.
Yes I too noticed the Scotia Passport Visa Infinite. Annual fee with some good perks but it is a points card…I much prefer cashback. No FX.
Starting March 28th 2018 Rogers and Fido will only be paying 3%. So you will only be earning 1/2% on foreign transactions. Bummer I was just about to apply.
Personally, I only got Fido for the no FX. Even 1/2% is still better than 0%.
Just applied for Brim mainly for the free Boingo membership. A $39 a month value. That could be very handy when travelling.
Apparently they are in pre-launch and will let you know as soon as they process your application.
Wonder how long this is going to be?
Found an issue with HT. They only allow for a maximum of 10 pending transactions at a time so you will be limited if you go to a country where you just swipe swipe swipe.. this card will get rejected if there are too many pending transactions
Please note that the Rogers card, on May 23, 2018 is reducing the reward to 3% for non CDN transaction, 1.25% on all purchases, 2% on Rogers bill payment and no annual fee, even if you don’t register your Rogers bill for monthly charges.
They are in fact reducing US purchases by 1% from 4% to 3%, reducing all purchases from 1.75 to 1.25% and increasing to 2% only for Rogers bill.
Fido will suffer similar loss on May 23, 2018.
I just got the card but would have not applied having known the lower rewards.
This card has no other benefit to it than the rewards it gives.
TD is increasing the FX fees to 3.5% in June. Watch for others to follow suit.
It seems like it will be folly to try and chase the best deals, at least among the majors.
Hi, I have a RBC Visa US dollar credit card linked to a US-based RBC account but just found out that they charge 1.5% transaction fee for any purchases made outside the US even if it is in a dollarized country like Ecuador or Panama. Any suggestions for a Quebec resident heading down to Panama?