Frugal Friday: Foreign Transaction Fees

One thing some of you may or may not know is that every time you use your credit card in another country or spend in another currency online, your credit card issuer or bank charges you an additional 2.5% for doing the exchange from whatever currency you paid in to your home currency.

For example, we fill up our cars in the States almost exclusively, a Frugal Friday post on it’s own next week where we will show you how it saves us lots of money, and we specifically use a credit card that does not charge us a foreign transaction fee.

Now, the argument can be made, and is very viable that the 2.5% fee is so low that it doesn’t matter and you could be earning points on that purchase that make up for the 2.5% fee. If you’re that person then by all means go about your purchases that way, it is a great option and we will not fault anyone that decides to do that.

On the other hand, if you would like to avoid the 2.5% fee there are a few good Canadian credit card options for avoiding this fee.

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Scotiabank Passport Visa Infinite

  • Earn 25,000 bonus points after minimum spend is met
  • Minimum spend is $1,000 in everyday purchases in the first 3 months
  • Annual fee of $139
  • Earn 2 Scotia Rewards points on every $1 you spend on eligible grocery stores, dining, entertainment purchases, and daily transit purchases (including buses, subways, taxis and more)
  • Earn 1 Scotia Rewards point on every $1 you spend on all other eligible purchases
  • Add a supplementary cards with the fee waived for the first supplementary card
  • You will not be charged a Foreign Currency Conversion mark-up on international foreign currency purchases made online or outside of Canada
  • Airport lounge access through your complimentary Priority Pass™ membership, which allows 6 free visits per year from the date of enrolment
  • Redeem for travel anywhere, anytime, with no travel restrictions

This is in our opinion one of the best options when it comes to cards that don’t charge a foreign transaction fee. The big negative is the $139 annual fee which is not waived for the first year. However, we have it on good accord that this card will be on Great Canadian Rebates within the first few days of April and will offer you some cash back to offset the annual fee (see below). We talked about Great Canadian Rebates on last week’s Frugal Friday and how it can earn you lots of cash back, especially on credit card applications. If you don’t have an account you can make one by clicking here.

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Not only that, but the Priority Pass membership and 6 free lounge visits are worth at least $99 USD which basically offsets the annual fee on their own. Plus, the 25,000 points after meeting the minimum spend are worth $250 towards travel.

In the end, this is a great option for a card that does not charge you a foreign transaction fee and gives you some other excellent perks.

You can apply for the Scotiabank Passport Visa Infinite and get $50 cash back here.

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Brim Financial Mastercard

  • Earn 1 point per $1 spent
  • No annual fee
  • Step-Up Loyalty program where you earn more points the more you spend at the same place
  • Mobile Device Insurance
  • Free Boingo WiFi membership giving you access to WiFi in airports, airplanes, trains, hotels and cafes around the world
  • No foreign transaction fees
  • Earn 10,000 points when you refer 5 friends who activate their card

Many people are very excited about Brim Financial. They offer 3 cards, the Brim Mastercard, Brim World Mastercard and the Brim World Elite Mastercard. If you scroll to the bottom of the page you can see the comparison of all 3 cards.

The Brim Mastercard in our opinion is the best card because it has no annual fee and the main benefits are the same. The only difference is the earn rate, 1, 1.5 and 2 points per dollar spent, respectively, and insurance coverage, but if you have a different card and only use this card for foreign transactions, it is likely that you already have another card with good insurance.

The unique thing about the Brim cards are their Step-Up loyalty program where you earn more points per dollar spent the more you spend at that store with participating merchants. Here is what Brim has to say about this program:

While you continue to earn your base rate on all of your purchases sometimes we’ll replace it with something even better: you can take advantage of accelerated earn offers the more you shop at participating retailers – restaurants, coffee shops, travel and more. As an example, you could earn 2 points on every $1 spent on your first visit, 4 points for every $1 spent on your third visit, and 10 points for every $1 spent on your 6th visit. You can browse all available offers and track what level of earn you’re at on the Brim Marketplace – in the Brim Portal and App.

This could definitely be an option for those who frequent the same places. For us, we feel there are better cards out there for everyday spend that earn points that can be better utilized for value if you value travel. For example, the American Express Cobalt Card earns 5x points on food related purchases, the highest bonus in Canada. If you don’t want to redeem for travel then Brim could be just for you.

Regardless, they don’t charge you foreign transaction fees, have a unique loyalty program for earning points and give you free WiFi on planes which could be a big value for those who fly often as airplane WiFi can be very expensive.

Brim is about to start rolling out these cards and those that are interested can get their spot in line by signing up here.

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Rogers Platinum Mastercard

  • $25 in cash back rewards after first eligible purchase
  • $29 annual fee is waived for the first year and every following year as long as your Rogers, Fido, or Chatr wireless bill is setup as a pre-authorized payment
  • 1.75% cash back on all purcahses
  • 4% cash back on all purchases made in a foreign currency
  • Redeem your cash back rewards towards anything Rogers including: Rogers, Fido and Chatr monthly bills, purchases in Rogers, Fido and Chatr branded stores, purchases at Today’s Shopping Choice, Toronto Blue Jays tickets, merchandise at Jays Shop online or in store, and at Rogers Centre concessions.

This card technically still charges you a fee on foreign transactions but offers a higher percentage of cash back for those purchases made in a foreign currency. you earn 4% cash back on those purchases which means even after the 2.5% foreign transaction fee you still get 1.5% cash back. Most cards that earn cash back don’t offer cash back at this high of a percentage. For example, if a card offers 2% cash back and you make a purchase in another currency, after the 2.5% foreign transaction fee you still are paying a 0.5% fee rather than actually earning cash back on that card.

This is a good card for people who use Rogers or Fido to avoid the annual fee and those who are Jays fans as you can use your rewards for tickets, merchandise, and Rogers Centre purchases. Even if you aren’t a Rogers or Fido user, the $29 annual fee isn’t that bad of an annual fee to have to pay.

You can apply for the Rogers Platinum Mastercard here.

In our opinion, the Scotiabank Passport Visa Infinite is our favourite and is the card that we use. We applied before the card was announced to be on Great Canadian Rebates but we suggest waiting until it is announced on Great Canadian Rebates before applying to help offset that annual fee. For those unfamiliar with Great Canadian Rebates, a reminder that we talked about it in last week’s Frugal Friday post.

Is there a favourite no foreign transaction fee credit card that you love that we missed? Let us know in the comments.

Never stop adventuring!

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