Hello,
I used to use the traditional BMO US$ credit card, use it on my trip, go to the bank, convert Cdn$ to US at the bank, pay off the credit card, rinse, repeat. I then did a lot of research on Greedyrates.ca and discovered a few things. The big discovery was that VISA and MasterCard charge the lowest exchange rate (not including the FX service charge) when they convert from USD$ to CDN$ - better than you get at the bank. This means that if you can find the right credit card, you are better off having VISA or MasterCard do the FX conversion - again, without taking the 2.5% charge into account.
This led me to look for cards that do not charge the 2.5% fee, but as everyone is commenting, these are being shuttered pretty fast. I did settle on the Rogers Platinum MasterCard. It does charge the 2.5% fee,
but they give you 4% back on foreign dollar purchases. Therefore, with this card I am getting the best exchange rate (better than the bank) AND I am getting a net of 1.5% (4% - 2.5%) back on foreign purchases. It also removes the hassle of going to the bank and doing the exchange. Although I feel this is the best solution, there are some shortcomings:
- There is an annual fee of $29, but this is waived if you setup a Rogers or Fido automatic bill payment. We use Rogers cell phones, so this is not a problem for us.
- They do start you off with a low credit limit, $5,000 in my case. I had to push pretty hard right when I got the card to get this bumped up to $7,000 and then after 6 months I was able to get it bumped up to $10,000.
- They make it a little difficult to get your points back in cash. However, you may redeem your rewards as an annual statement credit to your account. You have to call Rogers prior to December 1 and they credit your account in January. You have to do this each year. It's a little bit of a hassle, but I don't mind.
- It does not work with Apple Pay
- They do not allow for automatic payments from your bank account. You have to manually transfer the money every month.
- This method makes it a little harder to hedge on exchange rate fluctuations (i.e. purchase US$ when the rate is low and save for paying off a US$ credit card later). However, you can still do this if you purchase the US$ when the rate is low and then convert back to CDN$ when the rate is higher, then use that to pay off the Rogers MasterCard - if you are so inclined.
The list of shortcomings seems a little long, but it is worth it to me knowing that I am getting the best exchange rate and I am getting cash back on foreign purchases.
As an aside, I did apply for the HomeTrust visa and I was declined. It's interesting as I have a great credit rating, I own a business, make decent salary, etc. - so it left me a little stumped. I obviously do not fit their ideal customer profile.