# US$ credit cards - anything available to Canadians?



## bovuk (Sep 5, 2013)

I searched through existing discussion threads and couldn't find anything applicable/relevant.

We just came back from our 2 weeks of vacation (driving through US - East side). We used extensively our Costco American Express card(s). I reviewed some of items and see that the total cost of individual US$ shopping/spending events is significant. It seems Amex card applied two fees framework, when things like this happens:
- the exchange rate: the 'buy' rate (which includes one fee, as 'buy' is not the real exchange rate) and
- 2.5% conversion fee


I wonder if there are some credit cards available to Canadians, based on US$. The goal would be to pay off outstanding balances (after short trips to US) with US$ cash somewhere in Canada - either through bank branches or online.

This route (US$ based credit cards) would help us to lower the total cost:
- we could control the exchange rate 'buy' cost (shop/buy foreign funds at places with better rates) and 
- avoid 2.5% conversion fee cost


----------



## CanadianCapitalist (Mar 31, 2009)

Check out this related thread:

http://canadianmoneyforum.com/showt...ca-Rewards-VISA-Card-Commission-Free-Currency


----------



## alingva (Aug 17, 2013)

most of the canadian banks have US credit cards


----------



## james4beach (Nov 15, 2012)

That could be interesting... with all my credit cards, I've calculated that they're taking 2.5% spread on the forex (I can quite accurately predict the final charge by taking spot FX rate + 2.5%) for foreign currency transactions.

In my case I'm spending an average of $1000 USD a year in USD credit card charges... so $25 gone to the cc's forex spread

But if you had a USD credit card at a Canadian bank, could you actually pay the bill directly in USD funded from a USD account? Because if you have to do any conversion along the way you're going to pay the same 2.5% spread, or possibly even worse.

For this to offer a real savings I think you'd first have to be spending a substantial amount in USD (I don't think my $1,000 a year is worth it) and on top of that would have to be positive you can use USD cash to pay the balance directly, without any intermediate FX conversion.


----------



## alingva (Aug 17, 2013)

james4beach said:


> But if you had a USD credit card at a Canadian bank, could you actually pay the bill directly in USD funded from a USD account?


Yes for most of the banks, not sure about all of them.
One more option
http://www.rbcbank.com/products-and-services/cid-311413.html

Do not forget, a typical US credit card has an annual fee


----------



## FrugalTrader (Oct 13, 2008)

I think the best bet is the Amazon Canada credit card which does not charge the FX fee (2.5%).


----------



## Davage (Nov 14, 2012)

The Sears MasterCard also does not charge the 2.5% currency exchange fee. We used that card for gas for our trip from Ontario to Florida, and then from Ontario to Minnesota. Only had troubles at 2 gas stations where the Canadian card had a 'zipcode' issue. The trick of padding our Canadian postal code numbers with zeros worked for most of the stations. 

ie: Postal code M5V 2W2 = zipcode 52200

In the cases where the zipcode thing became an issue, we simply went inside and they were able to swipe the Sears MasterCard just fine. Not having that 2.5% currency exchange "fee" really added up.

Just noting - the Sears MasterCard converts from US to Canadian using the rate that day.. We pay the bill in Canadian Dollars, but at a fair exchange rate..


----------



## My Own Advisor (Sep 24, 2012)

A good cash back credit card, even if paying in USD $, helps the hit. Personally, not too worried about saving $25 or even $50 on a trip that costs a few thousand bucks. 

Thoughts?


----------



## FrugalTrader (Oct 13, 2008)

It really depends on the amount of shopping you do while you are down there. Orlando can be killer with the outlet malls.


----------



## Echo (Apr 1, 2011)

The Marriott Rewards Premier Visa also doesn't charge the 2.5% conversion fee - https://www.marriottpremier.ca/

It's an annual fee card, although they waive it in the first year.

I've got an article coming up in The Star this weekend about these cards and why all the card issuers in Canada charge this 2.5% OPTIONAL fee (seems like a cartel, doesn't it?). Chase is the only issuer who has chosen not to charge the fee.


----------



## FrugalTrader (Oct 13, 2008)

It's all about revenues and margins! To the regular consumer, the fee is invisible which is why there is little opposition.


----------



## Davage (Nov 14, 2012)

My Own Advisor said:


> A good cash back credit card, even if paying in USD $, helps the hit. Personally, not too worried about saving $25 or even $50 on a trip that costs a few thousand bucks.
> 
> Thoughts?


"Cash-Back" is something that we don't get caught up in. It is too temping to spend more money trying to chase those cash-back rewards. We pay CASH or debit for 90+% of our purchases, except when we go to the USA. We only use the credit card in Canada to facilitate payment where reimbursement is going to be promptly given (ie: Dental benefits - pay the dentist with credit card, and insurance money comes through 3 days later to pay the credit card bill), or for purchase protection. I wouldn't feel safe using my Canadian debit card at a gas station pump in Orlando, so I like the protection that the credit card offers for fraud. 

Sure, in the grand scheme of things - I agree - I wouldn't cancel a Disney trip because of $25 to $50, but we are financially responsible and save money where we can. The 2.5% savings is real money that we are able to keep in our bank account instead of paying the big credit card companies to increase their profits.


----------



## liquidfinance (Jan 28, 2011)

My Own Advisor said:


> A good cash back credit card, even if paying in USD $, helps the hit. Personally, not too worried about saving $25 or even $50 on a trip that costs a few thousand bucks.
> 
> Thoughts?


The Amazon card is a 1% cash back card. Win Win.

The downside with the Amazon card is that you don't get extra insurance in the way of Hire Car CDW or extended warranties and similar.


----------



## avrex (Nov 14, 2010)

I would still vote for <insert your Canadian bank's> US$ Credit Card.

I charge everything to my TD U.S. Dollar Visa Card. There's no annual fee when you already have their (also no-fee) TD Select Service Chequing Account.

On my last two-week trip to the US, I put $2500 on my card. This saved me about $62 in conversion fees. A nice dinner out. 

When I get home, I pay my US Visa bill with my spot-rate US dollars.

I'm going to the US again this fall. I expect to save money again. With minimal effort, there's no reason not to save on those currency conversion fees.


----------



## m3s (Apr 3, 2010)

The US cards only work in USD though. If I understand correctly the Amazon card is no foreign exchange fees anywhere?

I have TD SS but I just use the rewards card in the US... I figure the conversion is a wash with the rewards and the rewards aren't much good unless you have enough of them (hence their plan)


----------



## liquidfinance (Jan 28, 2011)

m3s said:


> The US cards only work in USD though. If I understand correctly the Amazon card is no foreign exchange fees anywhere?
> 
> I have TD SS but I just use the rewards card in the US... I figure the conversion is a wash with the rewards and the rewards aren't much good unless you have enough of them (hence their plan)


Exactly M3S, use it anywhere in the world without forex fees. 

The big bank USD card is a suitable option only if you regularly hold USD and only really visit / shop / conduct business stateside. After all you still need to convert those $ somehow. You could use it to your advantage and load up on $ when the rate is more favorable. But.... on discovery of the world outside of North America you will still be subjected to conversion fees. 


For the average person I don't see a comparable alternative to the Amazon card within Canada. The only other option is Sears which may be good if you want Sears rewards but the Amazon is a straight 1% cash back credited to your account once you hit $25. So 1% cashback + 2.5% saving on forex and no annual fee. Add to that cash withdrawal rate at 1% or minimum $5 you can also obtain cash for a reasonable fee assuming you instantly / pre pay your CC balance.


----------



## PatInTheHat (May 7, 2012)

avrex said:


> I would still vote for <insert your Canadian bank's> US$ Credit Card.
> 
> I charge everything to my TD U.S. Dollar Visa Card. There's no annual fee when you already have their (also no-fee) TD Select Service Chequing Account.
> 
> ...


How do you get these no fee accounts? I see fees posted for both on their website

EDIT: Ahh need to keep a $5k balance. Not exactly free... Probably better off using the free CC on one of their more expensive travel cards as well, no?


----------



## Sampson (Apr 3, 2009)

PatInTheHat said:


> Ahh need to keep a $5k balance. Not exactly free... Probably better off using the free CC on one of their more expensive travel cards as well, no?


Opportunity cost on the $5k cash at this point is far lower than the 2.5%.

We also use the TD USD Visa. Problem with respect to the OP is that Costco doesn't accept Visa. We travel to the USD 2-3 times per year, and often max our spending limits (bonus that kids get the limit too ). We always bring enough cash to coer our Costco adventures, then put everything else on the CC. FWIW, I always gas up at Costco in the US, since the price differential compared to other big name gas retailers is more than the 2.5% currency conversion.
_
Edited to:_ fix the quote


----------



## My Own Advisor (Sep 24, 2012)

TD USD Visa has annual fee Sampson? This one?

http://www.tdcanadatrust.com/products-services/banking/credit-cards/more-cards/usd.jsp


----------



## Sampson (Apr 3, 2009)

@MOA,

Free with the Select Service account (min. balance of $5,000).

If you add the safety deposit box, other benefits, and if you time it for the $200-$250 cash sign up bonus, well worthwhile.


----------



## uptoolate (Oct 9, 2011)

And TD will waive the minimum balance provision if you have enough business with them (and remind them every 6 months).


----------



## My Own Advisor (Sep 24, 2012)

Good to know. Might consider it. We make at least 2 trips per year to US, long weekends or longer. 

Thanks Sampson.


----------



## leoc2 (Dec 28, 2010)

Sampson said:


> Opportunity cost on the $5k cash at this point is far lower than the 2.5%.
> 
> We also use the TD USD Visa. Problem with respect to the OP is that Costco doesn't accept Visa. We travel to the USD 2-3 times per year, and often max our spending limits (bonus that kids get the limit too ). We always bring enough cash to cover our Costco adventures, then put everything else on the CC. FWIW, I always gas up at Costco in the US, since the price differential compared to other big name gas retailers is more than the 2.5% currency conversion.
> _
> Edited to:_ fix the quote


We buy a costco cash card using our reward points mastercard to use at costco. If we overspend then we cover the cash card shortfall with a debit card. Costco can transact combination cash card and debit.


----------



## Sampson (Apr 3, 2009)

leoc2 said:


> We buy a costco cash card using our reward points mastercard to use at costco. If we overspend then we cover the cash card shortfall with a debit card. Costco can transact combination cash card and debit.


You buy the cash card in Canada? with CAD? If so, what exchange rate do they give you?

I usually just do a currency gambit (well, sitting on lots of USD anyway) before our trip so cost is minimal. We typically leave most of the USD at home to cover the USD VISA after we come home.


----------



## humble_pie (Jun 7, 2009)

Sampson said:


> I usually just do a currency gambit (well, sitting on lots of USD anyway) before our trip so cost is minimal. We typically leave most of the USD at home to cover the USD VISA after we come home.




this sounds perfect, i think avrex was saying he does the same?

it all works fine for USD expenditures. For global expenditures i'm not sure about that Amazon card. It would not be reasonable for Amazon to offer all the world's currencies; there must be some currencies that it does offer - probably the leading few - there are perhaps 5 or 6 of these - but that's it.

wouldn't a problem for the average cardholder be that he'd have to maintain a bank account in the native currency out of which he could pay his Amazon card bill? presumable this is not an issue for liquidfinance who says he's a british bloke. But i for one don't have any british pound account, so if i had UK costs on an Amazon card statement, then somewhere along the line i'd have to pay FX fees to convert CAD to GBP, or USD to GBP ...


----------



## Spudd (Oct 11, 2011)

Here's the verbage on the foreign transactions for the Amazon card:
We will bill you in Canadian Currency if you use your account to make a transaction in foreign currency. We will 
convert it into Canadian currency at the exchange rate set by Visa International in effect at the time we post the 
transaction to your account. This exchange rate may be different from the rate in effect on the transaction date. 
We will not charge you any additional foreign currency conversion charge.


----------



## Echo (Apr 1, 2011)

Foreign transactions work as follows:

1. Currencies are converted at spot market rates 
2. VISA charges the issuer a net International Assessment Fee (ISA) of 60 basis points for non-Canadian transactions in a foreign currency. This would include buying from U.S. based website merchants for example.
3. The Issuers may or may not charge an Optional Issuer Fee (OIF) of any amount. For some reason every issuer in Canada chose 2.5%. As far as i can tell, Chase is the only issuer that has chosen not to charge an Optional Issuer Fee for foreign exchange fees.
4. The Optional Issuer Fee is a significant revenue source for Canadian issuers, especially for travel cards.

http://www.thestar.com/business/per...on_foreign_exchange_fees_when_travelling.html


----------



## humble_pie (Jun 7, 2009)

Echo said:


> The [credit card] Issuers may or may not charge an Optional Issuer Fee (OIF) of any amount. For some reason every issuer in Canada chose 2.5% ...
> 
> The Optional Issuer Fee is a significant revenue source for Canadian issuers, especially for travel cards.
> 
> http://www.thestar.com/business/per...on_foreign_exchange_fees_when_travelling.html



thankx Echo & thank you Spudd for your trouble.

what i did find chez MBNA is that the spot rate - which they refer to as the Bank of Canada rate - which MBNA is using before it tacks on its 2.50% user fee was significantly higher than the bank of canada noon rate for that day. About one-half of one percent higher. This was, i believe, greater than the BOC fluctuation for that day.

i'd have to do many more checks in order to see if there is a pattern. I probably won't do this, because i gambit US currency & i would never dream of paying a credit card company any FX fee. 2.50%? that's outrageous. Here we are grumbling about brokers charging FX fees of 1.50-1.99%, which compared to credit card FX charges of 2.50% look like saintlike giveaways.

as for Amazon, the messages upthread might be a bit misleading? i got the impression some readers thought they offer global currencies with no FX fees? actually, what they're passing on are the Visa fees. They are, in fact, piggybacking on Visa, in a certain sense acting as a sub-agent for Visa. Perhaps the Cost-of-Borrowing regulations that were passed as amendments to the Bank Act about a decade ago are preventing Amazon from tacking on any additional fee of their own.

cost-of-borrowing regulations were passed in order to control credit card companies, which up until then had been charging concealed FX fees on US purchases but disclosing nothing on statements to their clients. Tch.


----------



## Spudd (Oct 11, 2011)

I'm believe you are mistaken, Humble. 

For example, my TD Infinite Visa has the following wording:


> Foreign Currency Transactions: If you use the Account to make Purchases or obtain Cash Advances in U.S. Dollars,Euros, Great British Pounds,
> Australian Dollars,or Mexican Pesos, the foreign currency will be converted directly to Canadian Dollars before it is recorded in the Account. If you
> use the Account to make Purchases or obtain Cash Advances in any other foreign currency, the currency will be first converted to U.S. Dollars and
> then to Canadian Dollars before it is recorded in the Account. Credits to the Account involving a foreign currency will also be converted directly to
> ...


It's pretty clear that the TD card charges a fee on top of the rate established by Visa, while the Amazon card does not. Yes, the Visa rate may also be a rip-off (that is unclear), but at least the Amazon card is not charging the 2.5% on top of the Visa rate.


----------



## fraser (May 15, 2010)

We have a CIBC USD account and a CIBC USD Visa card. Until this year, we occasionally rec'd USD cheques. Rather than pay exchange, we just deposit them in our USD account and then use our USD Visa. Our US spending is often $10K year, sometimes more so the card ($30.) pays for itself. 

We will be cancelling the card soon and moving to either the Marriott card ( $120. but gratis in year one) or the Amazon.ca card (free). We travel outside of NA so these cards will be well used. We really resent paying the 2.5 percent fee.

One thing though. When we book air in the US on a US carrier, many of the carriers like AA provide excellent exchange rates. Something to keep in mind if you are in this situation.


----------



## liquidfinance (Jan 28, 2011)

Spudd said:


> I'm believe you are mistaken, Humble.
> 
> For example, my TD Infinite Visa has the following wording:
> 
> ...




Spudd

You can check out the Visa rate here:

http://corporate.visa.com/pd/consumer_services/consumer_ex_rates.jsp

I also posted an example in my thread:

http://canadianmoneyforum.com/showt...-Free-Currency?p=194733&viewfull=1#post194733



> August 15th
> 
> $1 USD = $1.036496
> 
> ...


----------



## liquidfinance (Jan 28, 2011)

humble_pie said:


> this sounds perfect, i think avrex was saying he does the same?
> 
> it all works fine for USD expenditures. For global expenditures i'm not sure about that Amazon card. It would not be reasonable for Amazon to offer all the world's currencies; there must be some currencies that it does offer - probably the leading few - there are perhaps 5 or 6 of these - but that's it.
> 
> wouldn't a problem for the average cardholder be that he'd have to maintain a bank account in the native currency out of which he could pay his Amazon card bill? presumable this is not an issue for liquidfinance who says he's a british bloke. But i for one don't have any british pound account, so if i had UK costs on an Amazon card statement, then somewhere along the line i'd have to pay FX fees to convert CAD to GBP, or USD to GBP ...


Humble: I am indeed a British bloke and still have some GBP's but as Spudd stated the card will bill in CAD so there is no need to maintain an account in any other currency. 

I posted a link above to the Visa consumer site to view exchange rate scenarios and compare them to the Bank Of Canada on any given day. 

I'm going back to visit family for a week in October so will be able to provide real world examples of the exchange rates I received. 


For big $USD spenders then the USD card / bank account is going to be the best solution. But for the average person shopping online outside and and taking vacations around the world then the Amazon probably offers the most cost effective solution. For me it has the edge over Sears because it's 1% cash back as opposed to points which can only be redeemed in Sears. 

Granted many people are probably happy to pay the 2.5% fee as the savings may not amount to much. For me it's just wanting to get the best deal out there and not needlessly give any excess money away.


----------



## humble_pie (Jun 7, 2009)

liquid u are right, at first i had thought Amazon was billing in british pounds, euros, yen etc but then i realized from spudd & echo's details that they are using a low base FX rate from Visa international & apparently not adding to it in CAD.

did u say that Amazon also offers 1% cashback? are there any drawbacks that we should know about? if not, i think you have found a real gem for globe-trotting cmffers & anybody else reading this site, thankx!

as you say, for heavy USD spenders a USD card plus a broker's account plus either real forex trading (IB) or else ability to gambit the currencies = best deal possible. 

but for spenders in other currencies you've pointed out a good deal. Don't forget to come back & tell us about your trip to the sceptred isle set in the silver sea.


----------



## Echo (Apr 1, 2011)

@Humble - the only drawback I can think of is that you don't actually earn cash back but instead earn Amazon.ca gift cards (1,000 points = $10). You'll have to redeem your "cash" in Amazon's marketplace and so any of your purchases may be subject to shipping charges and you may get carried away buying stuff you don't need just to use up your rewards.


----------



## humble_pie (Jun 7, 2009)

good point, thankx! yes indeedy a downer ...


----------



## liquidfinance (Jan 28, 2011)

Echo said:


> @Humble - the only drawback I can think of is that you don't actually earn cash back but instead earn Amazon.ca gift cards (1,000 points = $10). You'll have to redeem your "cash" in Amazon's marketplace and so any of your purchases may be subject to shipping charges and you may get carried away buying stuff you don't need just to use up your rewards.




Echo. That's not correct. The rewards points are converted into cash and credited to your card. You are then free to spend this where you like.

This is from the reward program T&C's 



> Redemption Process: For every 2,000 points you earn in the Program,
> you will receive a $20 credit on your Account’s billing statement
> (“Redemption Credit”). Points earned during a billing cycle are not available
> for redemption until they are posted on your billing statement. Points for
> ...


PDF here:

https://www.chase.com/online/canada/document/Schd5Eng.pdf

You do however get a $15 gift card when you sign up.


----------



## humble_pie (Jun 7, 2009)

rule Britannia


----------



## Echo (Apr 1, 2011)

liquidfinance said:


> Echo. That's not correct. The rewards points are converted into cash and credited to your card. You are then free to spend this where you like.
> 
> You do however get a $15 gift card when you sign up.


Thanks Liquid! A statement credit is fantastic - as good as cash back (probably better).


----------



## humble_pie (Jun 7, 2009)

another little gem brought to you by the intrepid members of cmf forum ...


----------



## Sampson (Apr 3, 2009)

yes, very grateful for the thread and info.


----------

