Credit cards... ugh

[Canadian Harmony]

So now that we're going in December (hope hope hope), there are a lot of things that need to be paid for on credit cards while we're in California. Not things for DLR/DCA (except for my AP upgrade... if I do it...), but for when we got to LL and USH.

To that end, is there a US CC I can buy/use while I'm down there - like I'd exchange enough CAD to get $3600 USD and then put that money onto a card while I'm there, so the money would be in US funds, not Canadian. Or do I need a US address to do this?

You know how you can go to a Post Office here and buy an unlimited prepaid Visa? I'm hoping there's the same sort of thing down there I could find, and then I'd save some exchange fees on the prepaid (which is super high) and not have to take the cash out of my bank account while away (which is a whole 'nother bunch of high fees and exchange that ended up costing me over $200 due to the bank's incompetence).

TIA

 

[efrant]

How about getting a Canadian card with no foreign exchange transaction fees like the two below:

Rogers Bank Platinum MasterCard: Has a $29 annual fee, but is waived if your Rogers, Fido or chatr monthly bill is set up as a pre-authorized payment.

Marriott Rewards Premier Visa Card: Has a $120 annual fee, but you get a voucher for a free hotel night every year, which essentially covers the annual fee.

The Rogers card charges you the 2.5% forex fee, but it gives you 4% back in cash on foreign currency charges, so net benefit of 1.5%. The Marriott card doesn't change you the 2.5% fee on any foreign currency charges.

 

[Donald - my hero]

we have a BMO US Mastercard --meaning no foreign transaction fees and exhange rate is dictated by the date we pay the bill --which we can only do with US cash BTW. Annual fee is $35.00 but they will waive that if you charge $1000 a year.
US BMO Mastercard

 

[Canadian Harmony]

How about getting a Canadian card with no foreign exchange transaction fees like the two below:

Rogers Bank Platinum MasterCard: Has a $29 annual fee, but is waived if your Rogers, Fido or chatr monthly bill is set up as a pre-authorized payment.

Marriott Rewards Premier Visa Card: Has a $120 annual fee, but you get a voucher for a free hotel night every year, which essentially covers the annual fee.

The Rogers card charges you the 2.5% forex fee, but it gives you 4% back in cash on foreign currency charges, so net benefit of 1.5%. The Marriott card doesn't change you the 2.5% fee on any foreign currency charges.

Sounds good but we don't use Rogers, Fido or chatr, and there's no Marriott near us so that would never get used. I'll keep in mind though. Thank you!

 

[bankr63]

It is very difficult to get a US issued CC as a Canadian. Prepaid cards might be possible; never tried that. You can get US$ cards from Canadian banks, but as @Donald - my hero points out, you pay them off in US$. Unless you have a US$ source of income, at some point you have to convert your C$ to US$ to pay that card, and you will pay 2.%% on that conversion at the bank counter too. Note that you will pay 2.5% to convert your C$ to US$ to purchase your PAYG card too, so no advantage there. Really, they will get you any way they can.

Rogers and Marriott appear to be the only way left to truly avoid forex. @efrant pointed out elsewhere that the Amazon.ca card which had no forex along with no strings or annual fees has recently stopped taking applications. The Rogers card is probably not worth it because your "cash back" must be spent on Rogers products; if you have no Rogers products, you can't spend it. Marriott you would have to decide if you would save more than the $120 fee on waived forex (assuming you won't use the room bonus). Note that there are lots of Marriott properties around Disney, so you could always use it to extend your stay by a day.

 

[efrant]

[snip]

Rogers and Marriott appear to be the only way left to truly avoid forex. @efrant pointed out elsewhere that the Amazon.ca card which had no forex along with no strings or annual fees has recently stopped taking applications. The Rogers card is probably not worth it because your "cash back" must be spent on Rogers products; if you have no Rogers products, you can't spend it. Marriott you would have to decide if you would save more than the $120 fee on waived forex (assuming you won't use the room bonus). Note that there are lots of Marriott properties around Disney, so you could always use it to extend your stay by a day.

With the Rogers Card, you can get a true cash-back credit on your account once a year, so you can still use it even if you have no Rogers/Fido/chatr products. Once a year you can convert your points to cash and apply that as a credit to your card balance.

With the Marriott card, the annual free room can be used with any banner owned by Marriott, including Courtyard, Delta, etc. and once the rewards programs of SPG and Marriott merge next year, you'll be able to use it for Starwood hotels as well.

Both cards give you points, while the Canadian U.S. Dollar cards don't. For example, the BMO U.S. Mastercard posted above gives you US$35 (i.e., waives the annual fee) for spending US$1,000+ on the card. So if you spend US$3,600 on it, you save the US$35 annual fee, and get nothing else.

If you spend US$3,600 on the Rogers card, you'll get a credit of ~C$71 that you can apply to your balance (and the more you spend, that moves higher) less the C$29 annual fee, so you'll up getting C$42 free. It's not a lot, that's for sure, but it's free money!

If you sign up for the Marriott card and spend US$3,600, you'll get 1) no annual fee for the first year, 2) 30,000 points for signing up, which is a value of about $240 and can be converted to Aeroplan or other rewards if you want, and 3) 2 points for every dollar spent on airline tickets/car rentals/restaurants, and 1 point for every dollar on other spending.

Disclaimer: I had a TD U.S. Dollar Visa with no annual fee which I used to use for my Disney trips to avoid the forex fees, but then I recently found out about the Rogers and Marriott cards, and I decided to cancel my TD U.S. Dollar card and get the Marriott card instead.

 

[bankr63]

Disclaimer: I had a TD U.S. Dollar Visa with no annual fee which I used to use for my Disney trips to avoid the forex fees, but then I recently found out about the Rogers and Marriott cards, and I decided to cancel my TD U.S. Dollar card and get the Marriott card instead.

I have yet to understand how any card like the TD US Dollar card allows you to avoid forex unless you have a US source of income to pay the balance in US dollars. Yes, transactions appear on the statement in US dollars, and so there is no forex (yet). But all you are doing is delaying WHEN you pay the forex. The bank still charges forex (at the same 2.5% rate as Visa and Mastercard unless it is a discounted large transaction) when you convert your money to pay the balance. If you maintain a US$ savings account, you can try to time the markets and exchange when you think the rate will be favorable, but that is generally a bit of a fools game. Using dollar cost averaging for deposits to your US$ savings can help even out the bumps a bit, but unless you travel quite a bit, that's a fair bit of effort and can needlessly tie up funds. There are a few people here who run businesses on the internet or in tourist areas that handle enough US$ to avoid this pitfall, but they would be fairly rare.
The one advantage I do see is that it is neutral on purchase returns. For example, if you ever have to cancel and rebook a Disney vacation on a Canadian credit card, you will pay forex 3 times (initial purchase, return transaction, second purchase). That can be a real issue with most C$ cards, except those with no forex fees, but would not impact a US$ credit card.

 

[efrant]

I have yet to understand how any card like the TD US Dollar card allows you to avoid forex unless you have a US source of income to pay the balance in US dollars. Yes, transactions appear on the statement in US dollars, and so there is no forex (yet). But all you are doing is delaying WHEN you pay the forex. The bank still charges forex (at the same 2.5% rate as Visa and Mastercard unless it is a discounted large transaction) when you convert your money to pay the balance. If you maintain a US$ savings account, you can try to time the markets and exchange when you think the rate will be favorable, but that is generally a bit of a fools game. Using dollar cost averaging for deposits to your US$ savings can help even out the bumps a bit, but unless you travel quite a bit, that's a fair bit of effort and can needlessly tie up funds. There are a few people here who run businesses on the internet or in tourist areas that handle enough US$ to avoid this pitfall, but they would be fairly rare.
The one advantage I do see is that it is neutral on purchase returns. For example, if you ever have to cancel and rebook a Disney vacation on a Canadian credit card, you will pay forex 3 times (initial purchase, return transaction, second purchase). That can be a real issue with most C$ cards, except those with no forex fees, but would not impact a US$ credit card.

You're absolutely correct, the banks do charge a foreign currency conversion fee (although not explicitly, i.e., it's built into the exchange rate they convert at). That said, if you go to a currency exchange outlet (non-bank owned), you can usually get a much better exchange rate than at a bank. So, for those that have a U.S. dollar credit card, they can head over to the forex outlet, convert their Canadian dollars to U.S., and pay off their U.S. dollar card and still be better off swallowing the 2.5% fee on the credit card. (In my specific case, I have access to bank staff rates, which make forex conversion more favourable.)

At the end of the day though, assuming one has no U.S. dollar income, I think we both agree that having a Canadian credit card that doesn't charge a forex transaction fee (like Amazon, Rogers, Marriott) is by far the best solution.

 

[Sue M]

I have a CIBC USD Visa, and a CIBC USD savings acct. I watch the rates and buy some USD to put into my USD savings acct. before trip I preload my US Visa I don't like carrying around much cash. I take some cash for when I can't use Visa.
So glad US Costco now has Visa. Although with the dollar, not much cross border shopping going on.

 

[rxbeth]

I have yet to understand how any card like the TD US Dollar card allows you to avoid forex unless you have a US source of income to pay the balance in US dollars. Yes, transactions appear on the statement in US dollars, and so there is no forex (yet). But all you are doing is delaying WHEN you pay the forex. The bank still charges forex (at the same 2.5% rate as Visa and Mastercard unless it is a discounted large transaction) when you convert your money to pay the balance. If you maintain a US$ savings account, you can try to time the markets and exchange when you think the rate will be favorable, but that is generally a bit of a fools game. Using dollar cost averaging for deposits to your US$ savings can help even out the bumps a bit, but unless you travel quite a bit, that's a fair bit of effort and can needlessly tie up funds. There are a few people here who run businesses on the internet or in tourist areas that handle enough US$ to avoid this pitfall, but they would be fairly rare.
The one advantage I do see is that it is neutral on purchase returns. For example, if you ever have to cancel and rebook a Disney vacation on a Canadian credit card, you will pay forex 3 times (initial purchase, return transaction, second purchase). That can be a real issue with most C$ cards, except those with no forex fees, but would not impact a US$ credit card.

I have a TD USD account and TD US Visa. I've been going to an independent foreign exchange counter and their rate is usually about 1% above xe.com. I put that money into the US account. I figure, if I'm okay with paying my trip off at this exchange rate, buy the money and keep it there. I do have some friends who work in the US who will sell me US at the rate on xe.com, which I know is a unique situation.

 

[kuhltiffany]

Bumping this up for @FigmentSpark

 

[FigmentSpark]

Thanks. I've been following this thread, which is how I found out about the Amazon card.... too late!

I wonder what the banks charge for FX when you buy on their systems?

 

[bankr63]

Thanks. I've been following this thread, which is how I found out about the Amazon card.... too late!

I wonder what the banks charge for FX when you buy on their systems?

2.5% at the counter at most of (if not all of) the major banks, although the percentage may decrease on larger (>$1000) transactions.

 

[FigmentSpark]

So no savings over just using a CAD card instead of an account and USD card, other than timing.

 

[bankr63]

So no savings over just using a CAD card instead of an account and USD card, other than timing.

Mostly, the one other advantage that a US$ card has is that returns don't get you hit with a triple whammy exchange. There have been a few stories here where a Disney agent has cancelled and rebooked a trip when there were major changes. This can hit you with two extra fees 2.5% on the cancellation, and 2.5% on the rebook. This would not happen with a US$ card.

Used in conjunction with a US$ saving account, you can try strategies like dollar cost averaging to ride out the waves in the exchange and store up money to pay your US$ CC. The theory is that you set aside a certain amount every week, or every pay, and exchange it into your US$ account. When our dollar is down, you are buying less US$, when our dollar is up you are buying more US$. This is generally smarter than trying to time the market to make $ purchases, as humans are notoriously bad at doing that. But personally, the results don't really show much benefit over just paying when the bill is due, considering the effort to setup and execute.

If you have any source of US$ income (eBay seller, vendor in a tourist area?), then leaving your proceeds in US$ in savings can make a lot of sense along with a US$ CC.

 

[FigmentSpark]

I agree, I try to buy USD when it's a good price (and when has that been lately?). But I've also panicked and bought at it's lowest price (last Jan at 68cents).