![]() If you focus mainly on domestic Canadian travel, there might still be a place for these cards as they offer benefits beyond no foreign exchange fees, which can offset the annual fee. The money that you would use to pay foreign transaction fees can quickly add up to a nice dinner out in most destinations! This often means paying for hotels, food, and activities in foreign currency.įor example, if $5,000 in foreign transaction expenses are put on the HSBC World Elite MasterCard, that’s $125 saved that you would be out of pocket when using a credit card that charges foreign transaction fees. For most points enthusiasts, we enjoy maximizing our points with First Class, and Business Class trips across the globe. This question will have to be answered by every traveler individually, as it does depend on where you’re traveling and what your spending patterns look like. Is Signing Up for a No Foreign Transaction Fee Credit Card Worth It? If we have a $1,000 CAD hotel bill paid with the HSBC World Elite card in foreign currency, we end up with a $30 return, and $30 ahead of the RBC Avion Visa card. ![]() Hotel rooms are often paid in the local currency of that hotel and make up the most significant expense of traveling aside from flights. The RBC Avion card earns 1.25 points per dollar on travel spend, for a return of 2.5%, but also includes a 2.5% foreign exchange fee for a net zero return. The HSBC card earns 6 points per dollar spent on eligible travel purchases, even in a foreign currency, for an effective 3% return. The savings go even further if we take the example with bonus multipliers on popular spending categories. Using credit cards with no foreign transaction fees puts more money back in your wallet. Considering that this traveler is saving on the $25 in foreign exchange fees, it’s a $15 net positive using this card! That’s not the kind of rewarding spending we discuss in the points and miles world!Ĭomparatively, if the traveler puts that $1,000 of spend on the HSBC World Elite Mastercard, they will earn 2,000 HSBC Rewards points worth $10 when redeemed as a statement credit against travel. Factoring in the 2.5% foreign exchange fee of $25, this traveler came out $5 behind. They would earn 1,000 Avion points worth about $20, depending on how you redeem them. Let’s say a traveler uses the ever-popular RBC Avion Visa Infinite card to pay for $1,000 CAD of uncategorized spending while abroad. For every $1,000 spent, $25 will be charged over and above the goods and services purchased. The first step is understanding how much a user is charged in easy-to-understand terms. However, it can be staggering if we do the math compared to a card that does not have these 2.5% fees. How Much Will I Lose to Foreign Exchange Fees on an International Transaction?Īt first glance, a 2.5% fee on each transaction may not seem like a big deal. These fees almost exclusively come in 2.5% denominations and quickly erase any value earned from spending on most cards, which makes avoiding them easily profitable.
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