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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 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.

{ 26 comments… add one }
  • Ray @ Financial Highway August 1, 2011, 9:04 am

    I currently have an RBC US account the card functions as debit and a pre-paid credit card. It works great for me, I keep all my US funds in the account and can use it anytime as a visa card. No fees or extra charges. However it does not come with a warranty or insurance plan.

  • Alex_Wan August 1, 2011, 11:32 am

    Like the post – it is a really great level of details – very helpful!

    For me personally it is a choice between RBC and TD card since I often need to rent a car when I am in the States. I am planning to get a U.S. dollar card now, but I am with RBC anyway, so I think the decision will not be that complicated.

    From other side if anybody needs a BUSINESS U.S. dollar credit card, I believe BMO is the only one offering it.

    I used to check the details of my credit cads here – quite useful link:
    http://insureye.com/insurance_toolkit/credit_card_comparison

    Cheers!

  • Scot August 1, 2011, 12:09 pm

    TD/Canada Trust – BORDERLESS PLAN
    If you have the above A/C with TD (holds U.S. funds ONLY) you get the following:

    Tiered interest rates
    Annual fee waived for TD U.S. Dollar Visa Card
    Preferred Foreign Exchange rates
    EasyWeb Foreign Exchange Services on funds transfers between Canadian and U.S. accounts
    Free cheques, U.S. travelers cheques, and U.S. drafts
    Free Paperless or statement Record Keeping
    5% Discount on Travel Medical Insurance through TD Canada Trust

  • Leigh August 1, 2011, 1:10 pm

    I have the CIBC card, shared with both of my parents. We definitely appreciate the 3 free cards. My parents got this card for me before I moved to the US to help me get by until I have enough credit history to have my own reasonable credit card. I pay it by cutting a check to CIBC Visa from my US bank account.

    My main beef with the CIBC card is that you can’t see it in online banking (yet).

    It looks like the TD one might be the best though for the insurance since this is the card I use to book flights and vacations.

  • BadCaleb August 2, 2011, 2:02 am

    I have a TD Select Service acct so that includes the Borderless Plan and the US$ credit card. I just looked it up to see if plan is still the same and it looks like it is plus they have up to a $250 bonus for signing up with Select Service. I rarely use the US acct or credit card anymore but its there if I ever do.

  • JM August 2, 2011, 4:52 am

    I have an HSBC USD Premier Card. I travel a lot for pleasure and us the card a lot.

    I do not pay fees on and get points then I have US bank account with no fees attached and pay the credit card from there.

  • Houska August 2, 2011, 11:50 am

    Ditto on the HSBC USD Premier mastercard. The card avoids the 2.5% forex fee, not only in the US but anywhere in the world. Ditto savings on forex spreads/charges for foreign ATM withdrawals on the US premier chequing (checking) account. There are some spreads for the forex from Cdn to USD so you don’t want to use either for your Canadian dollar banking, but it’s a great solution for the rest of the world.

    Note you have to first establish a Premier relationship in Canada, then leverage that to open these US-domiciled accounts using the Premier international service. It takes some paperwork and time, and HSBC is not the most brilliantly organized bank out there. But I can take some inefficiencies and cluelessness for savings that amount to several hundreds if not a thousand+ dollars per year, depending on your spending patterns.

    To establish a Premier banking relationship, you need to bring $100k of assets and maintain them at HSBC. That would seem to be prohibitive – who has $100k kicking around? and the performance and fees of HSBC investment products are not great…However, if you have an investment portfolio of $100k+ in ETFs, then you can just hold them in their discount brokerage, HSBC InvestDirect. It’s not great for trading, but if all you do is rebalance yearly, who cares….

    The HSBC US Premier Card has no annual fee and a points system that amounts to about 1% cashback (you have some choices).

  • JM August 2, 2011, 12:24 pm

    Just to add to the comments of Houska and of my own.

    HSBC also attaches a free Debit Card to the US chequing account as was discussed which is very handy in the USA for that matter world wide with no fees for withdrawing funds at most ATM’s.

    Also when I transfer CDN to US via my chequing accounts I appear to get a very competitive exchange rate.

  • Terry August 2, 2011, 1:40 pm

    Are Canadians allowed to apply for US cards from US banks? The credit reporting agencies are the same on both sides.

    Obviously, to justify the annual fee, 2.5% of your annual US spending should be greater than the annual fee.

    Dealing with HSBC is like pulling teeth without anesthetic.

  • JM August 2, 2011, 3:51 pm

    Terry

    I am a little surprised at your comments? I have dealt with ever low life bank in Canada over the years.

    I have found HSBC to be one of the best mind you I have only been a customer for 3 years. But I am a demanding SOB so they need to be good!

    OR

    Maybe I have False Teeth (only kidding)

  • DG August 2, 2011, 5:11 pm

    Terry: The problem with getting a credit card from a US bank is that you have no US credit rating nor any means to generate it.

    A few years ago I opened an account at Wells Fargo and considered getting a secured credit card but just went with the debit card instead. That worked out okay, but I was constantly worried about their ridiculous overdraft fees so I am in the process of switching to a Canadian based USD credit card.

    Dan.

  • Sampson August 2, 2011, 6:40 pm

    We use the TD Select Service account – and since we only earn US$ in the form of dividends, we mainly use ‘the gambit’ to convert CAD to USD.

    @ the HSBC members, what is the spread they give you?

  • Houska August 2, 2011, 10:01 pm
  • Sampson August 3, 2011, 12:31 am

    Thanks, 0.2-0.5% is very good indeed.

  • Pete August 3, 2011, 5:43 pm

    There is only ONE solution available to Canadians who travel FREQUENTLY in the US or are snowbirds and wish online banking to move $ across the border easily. That is the Royal Bank Access USA account. No other bank facilitates the movement of money between countries online (that I can find). The Access pkg includes 2 Cdn accounts – a Cdn $ chequeing and US $ savings at a Cdn branch and issue you a convenience card. If you are over 55 yrs or so, no fees apply. At the same time, they open, for you, an account with RBC Bank in the US which is chequeing and a combo debit/visa card is issued from the US. RBC Bank has been sold recently but, the relationship with Canada remains intact. In Canada, deposit your Cdn $ into the Royal Bank chequing, then on their website move to the Royal Bank US$ acct when rate is favorable. On that same Royal Bank website is a link to RBC Bank in the US and you can simply transfer US funds between the banks, A $3.95/mo fee applies but small price for the convenience. In the US, you can use the RBC Bank debit card for purchases or withdraw from an atm. As their machines are scarce in some areas, the atm’s at all Publix food stores charge no fees for cash withdrawals. Also, you now have a US$ cheq account (based in US)to pay private rental fees or whatever including paying for that Cdn issued US$ credit card. I have a BMO US$ MC with Airmiles (no longer available) and simply cut them a chq each month from the US acct……no problem. Opening the initial accts takes a bit of time in a Royal Bank branch but, worth it.

  • The Wealthy Canadian August 5, 2011, 2:38 pm

    Interesting post.

    I don’t have a US dollar credit card yet, but the BMO card would probably be my choice due to lower costs and it seems as though it’s one of the few available for businesses.

    I wonder if the BMO credit card has the option to link to your online banking so you can make payments from your US dollar account to pay off the MasterCard?

  • Scot August 5, 2011, 3:55 pm

    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

  • The Wealthy Canadian August 6, 2011, 5:23 am

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

  • Curlygirl November 25, 2011, 3:33 pm

    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.

  • invisible69 September 23, 2012, 1:42 pm

    @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)

  • Tahir Khawaja November 19, 2012, 2:29 pm

    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.

  • M January 25, 2014, 4:47 pm

    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?

  • victoria March 14, 2014, 2:55 am

    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.

  • KW April 1, 2014, 7:16 pm

    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.

  • Ron August 26, 2014, 11:54 pm

    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

  • Rishi March 19, 2016, 9:05 pm

    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.

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