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US Dollar Credit Cards in Canada vs No Foreign Transaction Fee Credit Cards - Explained

If you frequently make purchases in US dollars on your credit card, you might have noticed that on every transaction, your credit card charges you a fee to convert the currency from US dollars to Canadian dollars. The fee is about 2.5% in addition to the foreign exchange rate. 

Any thrifty Canadian who makes frequent purchases in US dollars should want to minimize these fees. One strategy to minimize foreign transaction fees is to apply for a US dollar credit card.

Can a Canadian apply for a US dollar credit card?

Yes, as a Canadian, you can apply for a US dollar credit card through one of Canada’s major banks. Since the credit card is a US dollar card, you won’t be charged a foreign transaction fee when you make purchases in US dollars.

NOTE: In order to make your monthly payments however, you’ll need a source of US dollars. Otherwise, you’ll need to convert your Canadian dollars to US dollars to pay off your credit card, which may cost more than paying foreign transaction fees.

Why get a US dollar credit card?

A US dollar credit card is a useful tool if you frequently travel to the US or make purchases in US dollars. Instead of withdrawing cash for spending or making purchases on your Canadian credit card (and paying foreign transaction fees) you can make purchases with a US dollar credit card and avoid those fees.

A US dollar credit card is a smart choice if you have access to US dollars and have the funds to pay off your credit card without converting currency. For example, if you’re a freelancer and some of your clients pay you in US dollars, you could use that money to pay off your credit card without converting currency and incurring fees.

US dollar credit cards vs no foreign transaction fee credit cards

US dollar credit cards and no foreign transaction fee credit cards are not the same, but it’s easy to get confused about the difference.

US dollar credit cards charge you for purchases in US dollars, and you pay off the balance in US dollars.

No foreign transaction fee credit cards, on the other hand, charge your US purchases (and any other foreign purchases) in Canadian dollars, and they don’t charge a foreign transaction fee to make the conversion. With most Canadian credit cards, converting purchases made in US dollars to Canadian dollars will typically cost a few percentage points (2.5%), but with a no foreign transaction fee credit card, it won’t cost you anything.

US dollar credit cards in Canada

Below, we shed some light on US dollar credit cards issued by some of Canada’s biggest banks and credit unions.

BMO U.S. Dollar Mastercard

The BMO U.S. Dollar Mastercard has an annual fee of $35, but when you spend $1,000 US in the first year, the fee is rebated back to your credit card. The interest rate is 19.99% for purchases and 22.99% for cash advances. This credit card comes with extended warranty coverage, purchase protection, and is accepted at over 30 million locations in the US and worldwide.

Scotiabank US Dollar Visa Card

The Scotiabank US Dollar Visa Card boasts no US currency conversion fees, and free supplementary cards for extra users. This credit card offers purchase security and extended warranty protection, and secure online shopping via Visa Checkout. The Scotiabank US Dollar Visa Card is also eligible for Apple Pay and Android Pay, and there is a $35 annual fee.

Meridian VISA US Dollar Card

The Meridian VISA US Dollar Card lets you earn rewards for your US dollar spending. This credit card lets you earn 1 point per dollar spent, with no restrictions on the purchases you make. The annual fee is $65, and it’s waved in the first year. Additional cards cost $30 per user, and your travel is covered by a suite of insurance products.

CIBC U.S. Dollar Aventura Gold Visa Card

With this credit card, you’ll pay an annual fee of $35, but that fee is waived in the first year. The CIBC U.S. Dollar Aventura Gold Visa Card is a rewards card that lets you earn 1 point per dollar spent that the CIBC Rewards Center, and 1 point per $2 spent on all other purchases. You can also earn an extra 2,500 bonus points by completing a series of activities with CIBC like setting up your email address and signing up for eStatements.

RBC U.S. Dollar Visa Gold

This travel rewards credit card lets you earn 1 RBC Rewards point for every dollar you spend, to be redeemed for flights, hotels, event tickets, and merchandise. There is a $65 annual fee for this credit card, and supplementary cards are $30 each. When you make purchases with the RBC U.S. Dollar Visa Gold, you’re covered by an extensive insurance package including purchase assurance and travel insurance.

TD U.S. Dollar Visa Card

Finally, the TD U.S. Dollar Visa Card has a $39 annual fee and free cards for additional card users. The interest rate on this credit card is 19.99% for purchases and 22.99% for cash advances. The TD U.S. Dollar Visa Card is Apple Pay, and contactless payment-enabled, for a seamless shopping experience. Purchases made with the TD U.S. Dollar Visa Card are covered by trip interruption insurance, baggage insurance, and emergency travel assistance.

No foreign transaction fee credit cards in Canada

If you don’t have access to US dollars to pay off your US dollar credit card, a no foreign transaction fee credit card is a simple and straight forward way to save money on purchases made in US dollars. You can pay off your balance with Canadian dollars, and you don’t have to worry about converting currency. With that in mind, here are some of the best no foreign transaction fee credit cards in Canada.

featured

4.0 Ratehub rated

Best for Travel perks

First year reward
$815/yr

based on spending $2,200/mo after $150 annual fee

Earn rewards

1pt – 3pts / dollar earn rate

Welcome bonus

30,000 bonus points (a $300 value)

Ratehub.ca's take

The Scotiabank Passport Visa Infinite card is the best credit card for traveling in Canada as it is one of few cards waiving foreign transaction fees (a saving of 2.5% on all foreign currency) in addition to valuable travel benefits like comprehensive travel insurance, airport lounge access worldwide (with 6 free visits per year), and the ability to redeem your Scene+ points for travel. 

Pros

  • One of the few Canadian credit cards to offer no foreign transaction fees (saving you 2.5% on all your purchases made in a non-Canadian currency)
  • Earns three Scene+ points for every dollar spent at participating grocery stores like Sobey's, IGA, and FreshCo, among others; two Scene+ points for every dollar spent on eligible grocery, dining, entertainment and daily transit purchases
  • Flexible point redemption
  • Priority Pass membership with six free visits per year to over 1,200 lounges worldwide
  • Access to the Visa Infinite Luxury Hotel Collection and Visa Infinite Dining series
  • Complimentary Avis Preferred Plus membership
  • Comprehensive travel insurance including coverage for emergency medical, trip cancellation/interruption, and flight delay, among others

Cons 

  • Annual fee of $150 is higher than the average for cards of this calibre
  • Much lower return than other cards with comparable annual fees