Top US Dollar Credit Cards in Canada

One of the hot topics in Canadian financial landscape is the strong Canadian dollar and the deals that we can obtain from the U.S.  I’ve written about USD Chequing accounts, how to save money during foreign currency exchange and even the process of buying a car from the U.S.

When I shop in USD, despite the 2.5% forex commission, I prefer to use a credit card.  But what if one regularly has USD expenses – is there a way to avoid the 2.5% overhead?  That’s where a USD based credit card can be used to help save money as the purchase is kept in the USD currency and avoids the forex fee.

Heads up though, having a USD credit card only really saves money if you already have USD accumulated or if you’re income is USD based.  That way, you don’t need to convert your Canadian dollars into USD to pay off the credit card, which would really defeat the purpose.

Checking out the credit card providers in Canada, it appears that four of the big banks offer USD credit cards. All of them have annual fees but vary in what they offer.   Although I do not like paying annual fees on credit cards, these cards would end up paying for themselves in short fashion.  $1000 charged to a USD credit card in a month would save $25, over a year, that’s $300.

Here is what I came up with:

CIBC BMO RBC TD
Annual Fee $35 (up to 3 free extra cards) $25 (spend $1k / yr and next yr is free) $65 (extra cards $30) $39 (free extra cards)
Points None None 1 RBC Pt for every $1 spending None
Insurance
  • Extended Warranty,
  • Purchase Protection
  • Extended Warranty,
  • Purchase Protection
  • Extended Warranty,
  • Purchase Protection,
  • Auto Rental Collision,
  • Travel Accident,
  • Trip Cancel
  • Trip Interrupt
  • Extended Warranty,
  • Purchase Protection,
  • Auto Rental Collision,
  • Travel Accident,
  • Trip Interrupt
  • Lost or Delayed Baggage
Extras Free Travelers Cheques None Free Travelers Cheques None

Judging from the choices in the table, for me, it’s all about value, even if there is an annual fee.  The only card that offers a rewards program is the RBC product, but surprise, it also has the highest fee.  For me, unless you already collect RBC points, the higher fee doesn’t justify starting a new points program.  I will say that having trip interruption/cancellation insurance on a credit card is a plus as it can be very expensive when purchasing it through a travel agent.

If you are dead set against paying an annual fee, then the BMO product is likely best.  They will waive the $25 annual fee the following year providing that you spend at least $1k  USD in the current year.  As this card has the lowest cost, so are the extra offerings – however, they do offer the essential extended warranty which I have used before.

For the traveler, the most value may be the TD card.  For $39 and free additional cards, they get a USD credit card with a load of insurances.  While it includes the standard extended warranty/theft insurance, it also includes car rental collision, trip interruption and lost/delayed baggage.  However, these insurances can only be used if the trip is booked with the credit card, and how often does one book their trips using USD?

If I were to pick one today, it would likely be the BMO product.  It’s low cost (almost free) and I can depend on my CAD based credit cards to cover the travel insurances.

How do you pay for your USD expenses?

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FT

FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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Rishi
5 years ago

I just received a letter from Chase Bank US that my USD Visa card which I held since 1997 will be cancelled. It was a great card with no fee and I used it for so long as I was traveling to US every year since and was using it but for the past 2 years haven’t had a chance to travel to US and didn’t use it. So they are now cancelling it. I suppose I don’t have a choice any more.

Ron
6 years ago

What do you think about the MARRIOTT REWARDS PREMIER VISA CREDIT CARD. it has NO FOREIGN CURRENCY TRANSACTION CHARGES plus a points program. Look at http://www.marriottpremier.ca

KW
7 years ago

After setting up a BMO US $ MasterCard, found out it is very difficult to pay..
Although the statement indicates, you have many convenient ways to pay: “Pre-authorized debit, telephone, internet…” yet they aren’t set up to accept payment by any of these methods from any other bank or credit union in Canada.
So far, at least 5 people at BMO tell me that the Canadian banking system can’t handle Pre-authorized debit of US funds within Canada. But TD handles this http://www.tdcanadatrust.com/document/PDF/banking/USD%20PAD%20Agreement_EN.pdf and the banks that handle US Merchant credit card accounts in Canada do this regularly.

victoria
7 years ago

Might not be the best solution for everyone but here are a couple things I do.

Since I earn some income in USD through ecommerce (with Paypal as my processor) I accumulate funds in USD – which I then withdraw into a USD bank account (I hopped over the border and opened it with my passport, easy peasy). I withdraw USD funds from my USD paypal account (this is important. NOT a canadian papal account that holds US funds, but a US paypal account – since otherwise they charge you a cross border fee) into my USD bank account. That account has a visa/debit card. Not ideal, and I’m looking for a better solution but it’s the only thing that keeps me not paying fees.

The other thing I found was that the amazon.ca rewards visa lets you purchase outside of Canada without charging the crossborder convenience fee. Yes, it converts to CAD using the regular VISA exchange rate, but it’s better than paying the extra 2.5% on top of that (or whatever your card charges you) AND it’s a rewards card that regularly pays me $20.

M
7 years ago

I agree that dealing with HSBC Premier is a big pain. The Premier Relationship Manager had no clue of what I want to do when I asked to open a USD account and a USD credit card. It has now been over one month and my USD account is not yet opened. All she cares about is if I am buying mutual funds from her. HSBC US International Banking Center asked for my personal info. Such as photocopies of my ownership of properties, utility bills, all financial information with HSBC Canada. The documents were to be verified and signed in front of a HSBC staff. Then they asked me to go back to the bank for signing two additional forms. Then the International Banking center asked me to reset provide my copy of my HSBC credit card and also the back of it as they couldn’t see, and told me to go back to the bank. I was like: Can you idiot just pull out my credit within HSBC Bank and see my credit history? I have been banking with HSBC Canada for 10 years in Canada and over 20 years in Hong Kong. Then they asked me for my proof of employment income. They also asked for my back statement copies to show my income deposited to the account.

Really? I mean, HSBC US is having doubts that someone with a net worth of over the millions and hundreds of thousands sitting in the investdirect account cannot pay off the credit card bill?

Tahir Khawaja
8 years ago

RBC Bank USD credit card from their US based bank is rubbish. The entire transaction can be in US funds but if the company you are buying from is outside the States they will charge you a “cross border exchange rate fee”.

This is how stupid it is:

Buy something from a website that takes Paypal. <= A US company. The entire transaction is in US funds. The website is by a person in Canada = cross border exchange rate fee.

I have never heard of something so stupid as that.

invisible69
8 years ago

@Curlygirl: I have a US$ bank account at BMO and can transfer funds to my US$ BMO Mastercard no problem. It has been available for a few years now. (In the past I called customer service and they transfered the funds to pay the MC, took a couple minute phone call each month)

Curlygirl
9 years ago

I have the bmo, its great but I hate that you have to go into the branch to pay the bill. Banks do not offer the option of transferring the funds via online or sundry credit.

The Wealthy Canadian
9 years ago

@Scot: Thanks for providing these details regarding the TD business VISA card!

Scot
9 years ago

TD/Canada Trust also offers a “TD Business Visa Card”.
Here is a except from their web-site (bottom line here is you have to check the
details on each banks web site as these posts are NOT the whole story)
In answer to The Wealthy Canadian’s question about linking your U.S. account
to the Visa card, the nswer is yes, as well a “PAD” (pre-authorized debit) can
be set-up to either pay the balance in-full, or, just the minimum pament each
month.
Here is the link: https://www.tdcanadatrust.com/cgi-bin/convert.pl
You will find the following at this location.

The TD Business Visa Card gives you access to a vast selection of privileges, including valuable insurance protection1, emergency services, banking benefits and the convenience of managing your TD Business Visa Account online through EasyWeb Internet banking.

Credit Card Information

Annual Interest Rates: 19.99% on Purchases and
21.5% on Cash Advances
Annual Fee: $50 (per Card)
Credit Limit: $1,000 Minimum
Additional Cards are available: $50 (per Card)

Turn your business expenses into travel rewards

If you travel for your business, then it might make sense for you to apply for the TD Business Travel Visa Card – and earn TD Points on purchases made with your Card. With the TD Business Travel Visa Card, you get all the same features as the TD Business Visa Card, and you also enjoy the advantages of the TD Travel Rewards Program. The TD Travel Rewards Program allows you to earn TD Points on purchases using your Card that you can redeem toward any travel deal you find anywhere.

Apply for a new TD Business Travel Visa Card today and you’ll get 30,000 Bonus TD Points as soon as you’re approved