A question that has been frequently asked. Which credit card should I use when I am abroad? Different credit card companies have their own ways of selling it. You may see a lot of advertisement about best credit card to use when travelling. However, just to make that distinction, some credit cards are great to use for travel expenses that are spent in Canadian dollars, while other credit cards are better to use on purchases that are in foreign currencies.
Today, I will list the top picks of the best cards to use on foreign purchases.
This is a prepaid card that is used like a Visa credit card. What is great about this card is that you can time when to load the card with a specific currency, so you can take advantage of some currency fluctuations.
For example, if you knew that you were going to Europe 6 months from now, you can watch the fluctuations within the next 6 months to decide when to load your card with Euro funds.
Below is a list of 10 different currencies that you can load, and you can load them all at once:
- Canadian Dollars – CAD
- United States Dollars – USD
- Euros – EUR
- Great British Pounds (UK) – GBP
- Mexican Peso – MXN
- Hong Kong Dollars– HKD
- Australian Dollars – AUD
- Japanese Yen – JPY
- Turkish Lira – TRY
- Swiss Franc (Switzerland)– CHF
When you use your card, even if you have multiple currencies loaded, the machine should automatically detect the appropriate currency to use.
Just note that you can only load this card with either a MasterCard or Visa card only. Unfortunately American Express is not accepted. Personally, I think it would be good to load up on RBC Avion points. Otherwise, you can always get 2% back with fixed reward cards.
The good part is that you do not have to pay an additional foreign transaction fee after your loaded the foreign currency. You get the use that foreign currency as is.
Return: At least 2%
My second choice would be the Rogers Bank Platinum MasterCard. Below are the highlights of the card:
- $29 annual fee (waived the first year or waived so long as you have pre-authorized Rogers payments set up)
- Earn $25 cash back sign up bonus
- Earn 4% cash back on on foreign exchange purchases
- Earn 1.75% cash back on all purchases
- Apply cash back to purchases made in Rogers branded stores or monthly Rogers bill
- 2.5% foreign transaction fee
If you deduct 4% from 2.5% foreign transaction fee, you can still net 1.5% cash back. Just note that you can only use this cash back towards Rogers purchases. So it would not make any sense to have this credit card if you do not purchase anything with Rogers.
Ideally, you will also want to have a recurring bill on file, so that you can continually waive the annual fee.
- No annual fee
- Earn $20 Amazon.ca bonus sign up gift certificate
- Earn 2% cash back on Amazon.ca purchases
- Earn 1% cash back on all other purchases
- No foreign transaction fees
This is a straightforward return, you will get a 1% return on all foreign purchases. What is great about this cash back is that it automatically credits your account after your earn $20 worth. It is a no hassle cash back program that does not require you to use the cash back towards a specific purchase like the Rogers card.
- $120 annual fee (waived the first year)
- No annual fee additional cardholders
- Earn 30,000 sign up bonus points after your first purchase
- Earn 5 points for every $1 spent at Marriott, Ritz-Carlton or Starwood hotels
- Earn 2 points for every $1 spent on airline tickets, car rental agencies and restaurants
- Earn 1 point for every $1 spent on all other purchases
- Earn 15 nights credit every year
- Receive 1 anniversary bonus free night stay at a Category 1-5 hotel every year
- No foreign transaction fees
I value 1 Marriott point at 0.8 cents as piece. So if you spend on Marriott, Ritz-Carlton or Starwood hotels, you are looking at a 4% return at 5 points per dollar. With airline tickets, car rental and restaurant purchases, you are looking at a 1.6% return. Otherwise, all other purchases, you are looking at a 0.8% return.
I classified this as the lowest level card because only specific categories give you higher than a 1% return. Otherwise, you can get up to a 4% return on specific purchases.
Return: 0.8%, up to 4%
As usual, do your personal calculations to determine which card best suits your personal situation.