Well, here goes my first “real” blog. It is mostly about my attempt at finding the best travel credit card for Sama and I when we go to Australia.
My first real enlightening read was from one of the biggest travel blogs out there, written by a fellow known as Nomadic Matt : http://www.nomadicmatt.com/travel-tips/picking-a-travel-credit-card/
One of the most valuable points that I encountered was that most credit cards charge a 2.5% Foreign Currency Exchange Fee, which basically means that when you use a credit card outside of Canada, the bank transfers the Canadian funds to the currency of the country that you are spending yous money on (usually the US dollar for us Canadians, but in our case the Australian dollar).
So basically – I buy something from Australia for $10 AUS using my credit card – my credit card company uses the exchange rate (0.95 as of July 21st) to charge $9.53 CAD to my card and then adds another 2.5% (25 cents) to make the total charge to my credit card $9.78 CAD. So essentially the bank is taking 2.5% of every hard earned dollar that I (anyone) spends out of Canada.
Now most of you are probably thinking , whats the big deal? Its only 25 cents. But if you are spending large amounts out of your home country, that amount will add up fast. If we spend $10,000 over 6 months or a year that would be $250! If we are each spending $10,000 in Australia over the next year then that is $500 – just to convert my money to another currency!
Luckily there is a way around this. Now Americans are extra lucky since it appears that they have many more options for credit cards/ rewards points ect. But in Canada I have found 3(sort of 4) credit cards that charge NO FOREIGN EXCHANGE FEE!
They are all offered through Chase:
- The Marriott Reward Chase Visa Card
- Amazon.ca Rewards Visa Card
- Sears Financial Mastercard (also Sears Financial Voyage Mastercard)
Now the best one really depends on what company you would rather collect points on. For travelling I believe that it will be best to worry a little bit less about the rewards system and a little more about the foreign currency conversion fee! Most credit card companies offer rewards closer to 1% of your total spending – not 2.5%, and if you happen to shop/use any of the points you collect then even better!
Also check out my page on avoiding ATM fees while traveling!