OK, with the exchange rate it's time to consider a new credit card!

[kuhltiffany]

Ok, help me out here, I've seen discussions with different credit card options and since we have a US trip booked for March, it's definitely time to look into one. Do I want a US dollar credit card or one that doesn't have fees to use in the US? What are my options? We have many Mastercards already so would be more likely to apply for a Visa. Thanks

 

[taffy]

I am with TD and have a US cross border account and also a US Visa card with TD. I have been lucky that I have been transferring money into this account for the last several months so when I use the Credit Card I can pay it off with the money I have in the account in US dollars.

 

[disneymath]

If you don't have, or don't want to open, a USD bank account, then a USD VISA won't be much use to you. You wouldn't get charged the 2.5% (roughly) transaction fee on your card purchases, but you would likely get charged about the same in bank service fees when you went to convert CAD to USD to pay off your balance.

There are 3 or so Mastercards for Canadians that have no forex fees on any foreign currency purchases. We got the SEaRS Mastercard for our upcoming Europe cruise ... It has no annual fee. There is also a Marriott rewards MC, but it has a yearly fee. The third is the Amazon MC ... Not sure if it has an annual fee or not. If you don't make US purchases regularly, one of those might be the way to go.

 

[lizzyb]

I have a US credit card with Scotia. Just buy extra money when the rate is low and keep it in my US account.

 

[migel]

Another thought in this time of the declining dollar is your bank's exchange rate. My bank, CIBC, like most, offers poor rates when converting CND to USD. I have funds tranfered monthly from my Canadian chequing account to my CIBC USD account. A while back I switched to Forex.ca, and their rates are far superior to any Canadian banks. Forex withdraws the cash from my chequing, converts it, and puts it back into my CIBC USD account. Something to keep in mind, especially if you regularly switch funds to USD. Check first however, as your bank may add an additional fee for not using their exchange rates.

 

[mab2012]

No fee on the Amazon Visa, 1% cash back on purchases, and 2% on purchases at amazon.ca. I've been using it for all my foreign currency purchases for the past couple of years - love it.

Another option is to open a bank account in the US and use a foreign exchange service to transfer from your Canadian account. Someone upthread mentioned forex.com; I use xetrade.com, same idea. XE markup on CAD/USD conversions is usually 1.3 - 1.45%. But with the new no-forex-fee credit cards the only big advantage to this is that you get to tightly control the timing of your trade. And unless you're doing business in the US or making direct USD investments, it probably works just as well with a Canadian USD account and credit card.

ETA: Both the Amazon and Marriott cards are Visa, so if OP is looking for a MasterCard then either the Sears card or a USD MasterCard might be a better choice.

 

[Maddysdaddy]

When looking at US$ credit cards, pay attention to the benefits you receive as a cardholder, as it may make financial sense for you to obtain a for-fee card as opposed to a no-fee card.

We have the RBC US$ Visa as our second RBC Visa, so the annual fees charged to us for it were significantly reduced from what they normally offer it at. The cost of the card is recouped within a couple of days of car rentals, as we can decline the insurance - and it also comes with trip interruption insurance and RBC points towards travel.

Not sure which, if any, of the no-fee cards have these benefits.

 

[bankr63]

No fee on the Amazon Visa, 1% cash back on purchases, and 2% on purchases at amazon.ca. I've been using it for all my foreign currency purchases for the past couple of years - love it.

Another option is to open a bank account in the US and use a foreign exchange service to transfer from your Canadian account. Someone upthread mentioned forex.com; I use xetrade.com, same idea. XE markup on CAD/USD conversions is usually 1.3 - 1.45%. But with the new no-forex-fee credit cards the only big advantage to this is that you get to tightly control the timing of your trade. And unless you're doing business in the US or making direct USD investments, it probably works just as well with a Canadian USD account and credit card.

ETA: Both the Amazon and Marriott cards are Visa, so if OP is looking for a MasterCard then either the Sears card or a USD MasterCard might be a better choice.

Same here. With the Amazon cash back you are effectively getting about a 3.5% better rate than the major banks provide on cash exchanges. And that goes a little way to softening the 20%ish exchange rate. I also factor in that sales taxes are about half of our HST in FL. So I can effectively convince myself that it really only hurts to the tune of about 10% right now; or in other words, prices have to be about 10% better at the stores for me to break even (in round numbers).

 

[kuhltiffany]

Sorry, I just updated my original thread, we have multiple Mastercards but no Visa.

If I do get one of these cards, do I only use it in the US? What about buying something online from a US company? Any PayPal use?

Thanks!

 

[Maddysdaddy]

If I do get one of these cards, do I only use it in the US? What about buying something online from a US company?

You would use the card any time you make a purchase in US dollars, whether that be down south or at home online shopping from a US company.

 

[bankr63]

Paypal isn't really an advantage as they do the exchange prior to charging your card in C$ if you are a Canadian. At least I have yet to find a way to force it to charge me in US$.

But one thing to be aware of in many tourist destinations is that merchants will give you the choice of being charged in C$ or US$. Always chose US$ (regardless of which card you use) as their exchange is almost always much higher than the bank rate. I get this more in upper NY State than in FL, but I had it a couple of times in Orlando.

 

[mab2012]

You would use the card any time you make a purchase in US dollars, whether that be down south or at home online shopping from a US company.

It's great for any foreign currency transaction, actually. That's another advantage of the no-forex VISA as compared to the US-dollar bank account / credit card solution: same benefit applies when you're travelling or making purchases outside of the US!

 

[mab2012]

Paypal isn't really an advantage as they do the exchange prior to charging your card in C$ if you are a Canadian. At least I have yet to find a way to force it to charge me in US$.

It's been awhile since I've made a PayPal purchase so I can't tell you exactly where to look, but I know that I've always had the option to charge my credit card in the seller's currency. It's a per-transaction option; they show you the conversion rate and the final cost in Canadian dollars, or you can edit it and choose to charge directly in USD (or whatever other currency is used in the transaction). I think that once you've done that, they "remember" your preference and use it as the default on your next forex purchase.

Last I checked PayPal's forex charge was even worse than the typical 2.5% the credit card companies charge.

 

[coastgirl]

I looked at forex and xetrade and it looks like I need to be a trader, which is so beyond my ken. What if I just want, say, $1000US now as a hedge against my trip expenses and the falling rate? I don't have a USD account. I do have a USD credit card, so maybe I could get the cash applied to that card so I can spend it from there?

Those who have done it, what did you do?

 

[mab2012]

I looked at forex and xetrade and it looks like I need to be a trader, which is so beyond my ken. What if I just want, say, $1000US now as a hedge against my trip expenses and the falling rate? I don't have a USD account. I do have a USD credit card, so maybe I could get the cash applied to that card so I can spend it from there?

Those who have done it, what did you do?

I suppose it depends on how you define "trader". You are making a trade, to be sure, but it doesn't require any special knowledge of currency exchanges or sophisticated techniques. It does require a USD bank account, which could be held at either a Canadian or American bank.

Can't speak to forex, but at XETrade the steps are something like this:

1. Create an account
2. Register your Canadian and USD bank accounts
3. When you want to move money, log in and go to the "trading" tab. Select the currencies you are trading (ie. from Canadian Dollars to USD), and enter the amount and the currency you want to trade. For example, you can choose $500 CAD and you will receive whatever that converts to in USD, or you can choose $500 USD and you will be charged the CAD cost for that amount. Click "quote", and it will give you the exact exchange rate at that time and the final value of the exchange. eg. Right now it's giving me an exchange rate of 1 CAD = 0.7907 USD (1.3 pt markup over the market rate), and $500 CAD converts to $395.35 (ouch!).
4. If you're happy (ha!) with the rate, click "Book Trade". At that point you enter which bank accounts you are moving money between, and how you intend the money to be moved. The quickest cost-effective method is electronic deposit to the receiving account and bill payment from the sending account. You can also choose direct debit to pay, but it takes longer. If you're looking for speed, you can have the money wired, for a fee.
5. Now you can click "quote" again to get an updated rate, and then you have 40 seconds to confirm. Once you confirm, you're committed. If you chose direct debit, there's nothing else to do but wait. In my experience it takes 4-5 business days for the transaction to clear. If you choose bill payment then you can go to your sending account and send the payment; usually I have my funds in the receiving account in about 2 days.

Registering the accounts involves filling out bank and account information, nothing that can't be found on a cheque. It might take a couple of days for the account to be added - it's been awhile since I've done it, and I can't remember for sure. Once the initial set-up is done, it's really quite easy.

Regarding getting cash on your USD credit card, I suppose you could just make an overpayment. The credit card company is not likely to complain about holding your money. The trading accounts won't help you with that though, you'll pay whatever conversion your credit card company normally charges.

 

[coastgirl]

Thanks Mab that's good information. Now I'm just trying to figure out what the fees and choices are for a bank account! (The banks aren't nearly as easy to understand! )