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Top Free Credit Cards when Travelling Out of Country

top free travel credit card in canada

Within the comments of my popular top free cash back credit cards in Canada post, there is some discussion about the top “out of country” or “foreign currency” travel card in Canada. If you didn’t know already, most credit cards have a surcharge (around 2.5%) for any purchase that’s not in your home currency.

For example, if you are Canadian and travel to the US, most purchases while on your trip would be in USD. If you were to make the purchase with a typical credit card, the credit card would convert the purchase amount to your home currency (using the spot foreign exchange rate) AND add a 2.5% surcharge for the convenience of using a credit card. Maybe not a big deal at first, but if you regularly make USD purchases, the 2.5% surcharge is $25 for every $1,000 spent.

Capitalizing on this fee surcharge annoyance, a number of FREE credit cards have been introduced that offer 0% or reduced surcharge on foreign transactions. The picture on the top of this post may have given it away but from my research, there are four credit cards in Canada that are efficient to use while travelling out of country or making foreign currency purchases in general. Here are my favorites:

Best Credit Cards for Foreign Currency Purchases

1. Chase Amazon Visa

To my knowledge, this was the first free credit card to be offered to Canadians that does not charge a foreign exchange (FX) fee.  I like this card due to easy cash back redemption, and not being forced to redeem cash back against Amazon purchases (automatically receive a statement credit when you reach $20 cash back).  The biggest downside is that it doesn’t have any insurance coverage.  I personally use this card during US trips and it works like a charm.

Benefits:

  • 0% surcharge on FX transactions (essentially 3.5% return when making purchases outside your home currency);
  • 2% cash back on amazon.ca purchases;
  • 1% cash back on everything else; and,
  • Automatically receive a statement credit when you reach $20 cash back threshold.

Drawbacks:

  • No insurance coverage; and,
  • If this is not a main credit card, you could be waiting a while before you get $20 cash back.

2. Rogers Platinum MasterCard

This is a newish credit card offered by Rogers Bank, and really only geared towards Rogers customers.  Technically, it may not belong in this list because it has a $29 annual fee, but the fee is waived if you charge a Rogers service to the card (the first year is free regardless).

What’s attractive about this card is the 4% cash back on foreign currency transactions, which works out to be a 1.5% net benefit after counting the 2.5% FX surcharge.  What’s also attractive is the 1.75% cash back on everything else.  For a pseudo-free credit card, 1.75% cash back is huge.  Note though that the cash back accumulated is supposed to be used towards Rogers services, although some have requested and received a statement credit instead via telephone once a year.

Benefits:

  • 4% cash back on all foreign currency transactions (note that they still charge a 2.5% on fx, so the net reward is 1.5% on foreign currency transactions);
  • 1.75% cash back on everything else; and,
  • $29 annual fee waived if you charge a Rogers service to the card (first year annual fee is automatically waived for all users).

Drawbacks:

  • No insurance coverage; and,
  • Cash back must be used towards Rogers products.  Although some have reported to have phoned into Rogers Bank once a year to apply the accumulated cash back as a statement credit.

3. Fido MasterCard

The Fido MasterCard is very similar to the Rogers MasterCard above, but with slightly less cash back and no annual fee to think about. 4% cash back on foreign currency transactions, which works out to be a 1.5% net benefit after counting the 2.5% FX surcharge.  This card also offers 1.5% cash back on everything else.  Note though that the cash back accumulated is supposed to be used towards Fido services, and you may be able to get a statement credit instead by phoning in (like the Rogers card).

Benefits:

  • 4% cash back on all foreign currency transactions (note that they still charge a 2.5% on fx, so the net reward is 1.5% on foreign currency transactions); and,
  • 1.5% cash back on everything else.

Drawbacks:

  • No insurance coverage; and,
  • Cash back must be used towards Fido products (statement credit may be available).

4. Tangerine Money-Back Credit Card

This is my overall favorite free cash back credit card in Canada right now.  It offers up to 2% cash back on up to three categories of your choice, and 1% cash back on everything else.  While it doesn’t offer 0% FX surcharge, instead of 2.5%, they have a reduced charge of 1.5%.  What’s also attractive is that it has some insurance – purchase assurance and extended warranty.  If you are against carrying multiple credit cards, this is a strong choice as a single go-to credit card.

Benefits:

  • Earn 2% Money-Back Rewards on purchases in up to three 2% Money-Back Categories of your choice, and 1% Money-Back Rewards on all other purchases;
  • No annual fee;
  • No limit on the amount of Money-Back Rewards you can earn;
  • Three 2% Money-Back Categories if you choose to have your Rewards deposited into your Tangerine Savings Account, or two 2% Money-Back Categories if your Rewards are deposited back onto your Credit Card (categories include: drug stores, restaurants, entertainment, furniture, gas, grocery, home improvements, hotels, public transportation and parking, recurring bill payments);
  • Earn 4% Money-Back Rewards for the first 3 months in your chosen categories;
  • 1.5% Foreign Conversion Fee (most cards charge 2.5%);
  • Free Cards for Authorized Users on your Account; and,
  • Purchase Assurance and Extended Warranty.

Drawbacks:

  • Limited insurance coverage; and,
  • While 1.5% surcharge on foreign currency transactions is better than most credit cards, it’s still 1.5% more than the cards above.

Final Thoughts

The competition for foreign currency purchases is pretty tight and the best card will really depend on your specific circumstances.  If you are a Rogers customer, I can see the Rogers MasterCard being more attractive than the rest.  The same can be said for Fido.  However, if you aren’t using Rogers/Fido services, then it really comes down to the Amazon Visa and the Tangerine MasterCard.

Personally, although the Amazon Visa has less reward on foreign currency transactions than Rogers and Fido (1% vs 1.5%), the flexibility of the Amazon card wins out for me.  However, I don’t mind carrying and using more than one credit card.  If I were set on only using one free credit card right now, it would be the Tangerine MasterCard (Full review here).

On the topic of credit cards, if you are interested in the generous and free PC Financial World Elite MasterCard (3% cash back at Loblaws group of companies), check out the limited-time $75 gift card sign up bonus (plus $20 in groceries) if you sign up through Rate Supermarket. More details here.

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FT About the author: 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.

{ 15 comments… add one }
  • Jeremy Frank October 3, 2016, 2:56 pm

    Another consideration for foreign currency purchases is the possibility of returns. Years ago, my family booked a cruise in US$ on our Canadian credit card, but shortly after found some problems with onboard services. In the end we got a full refund. Or so we thought. Even though the refund was posted just after the purchase, the credit card company dinged us with an exchange fee amount in both directions. $200 lesson learned. The moral of the story: either ensure you have a card that does not charge an exchange fee, or do like we did and get a $US credit card (free to us as TD all-inclusive customers) which we pay off in US dollars (I control the exchange!).

    • Steve Blaismith October 6, 2016, 10:04 am

      This is a great point. I’ve been using a US$ CC for a while now because I’ve been a victim of this in the past. It’s bad enough you pay 2% fees when you purchase something in a foreign currency on a C$ CC. It’s even worse when there’s an errant charge that’s refunded and you get hit both ways for a product/service you don’t end up receiving.

  • Bernie October 3, 2016, 3:35 pm

    How does PC Financial MasterCard stack up?

    • FT FrugalTrader October 3, 2016, 3:37 pm

      Bernie, unfortunately PC Financial charges 2.5% on foreign currency transactions. So if you are in the US, your net cost would be 1.5% surcharge after counting the 1% cash back.

  • SmilingSaver October 5, 2016, 2:30 pm

    Tangerine is our go to card for travelling.
    Entertainment and Restaurants are the two options on the Tangerine card. This helps to track the “Out money” for our budget when we are in Canada. And it helps reduce the cost when traveling, because Entertainment and Restaurants is the main thing you do during the traveling anyways.

  • WS October 7, 2016, 1:21 am

    What is your thought of Scotiabank Momentum MasterCard? Previously it was Sears Financial MasterCard. I believe this card does not have any surcharge for out of country purchase.

    • FT FrugalTrader October 11, 2016, 8:54 am

      Hi WS, Are you sure the scotia card was previously the Sears card? My understanding is that the Scotia card charges a 2.5% surcharge on FX transactions.

      • WS October 16, 2016, 3:02 pm

        @FrugalTrader – Yes, I have this card though I do not use it. It was Sears Financial MasterCard with Chase Bank but last year Scotiabank acquired it from the Chase Bank.

        http://www.greedyrates.ca/blog/scotia-acquires-sears-canada-credit-card-portfolio/#.WAO43-UrJdg

        • RLBKER November 11, 2016, 11:13 pm

          I also had the Sears Chase credit card when Scotiabank took over the Chase accounts and issued me a Scotia card and the information provided said there was no surcharge for foreign exchange conversions. I have used the card a number of times for $US purchases with no surcharges. Now do not know if the provision is only for previous Chase/Sears customers but would think not.

  • Uncle Scrooge October 21, 2016, 9:38 pm

    How about Marriott Visa? It does not charge any fx charge.
    It’s not a cash back but one gets enough point to stay in Marriott.
    There is a $99 annual fee associated to it but it does give a night free at the beginning of year so it pretty much cover its fees.
    I do not know if they still have the offer but the new members get 50,000 points and that’s good enough for 6-7 nights in Courtyard Marriott plus they honor the upgrade if the suites are available.

    • FT FrugalTrader October 22, 2016, 6:49 pm

      I like the Mariott card for the sign up bonuses, but not so great as an everyday use card. Do you have the Mariott card?

  • Samantha October 25, 2016, 4:24 pm

    I got an USD RBC Visa a couple of months ago and I use it for all my purchases in USD, no matter if they are done in Canada or US. This will probably save me a couple of hundred dollars in forex exchange fees over one year.

  • Jason October 26, 2016, 3:54 am

    Best card out of all of them is the Rogers Card.

    Amazon: there is no Online statements so thats an easy lost fail.
    Tangerine: Is a great card for low spenders but it has a 1.5% FX fee.
    Fido: its 1.5% which is good but its for low spenders less than $12,000
    Rogers: even if u had to pay $30 its worth having once u spend over 12,000 annually.

    If u spend about exactly $12,000 u should be getting $180 in cash back from Tangerine, Fido and Rogers (after $30 fee). The rogers is the card to get for those who spend more.

  • aB October 26, 2016, 11:34 am

    Does the Tangerine card categories work out of country?

    • FT FrugalTrader October 27, 2016, 11:04 am

      I don’t have first hand experience, but my understanding is that it does work providing that the store has the correct merchant code for the category.

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