Living in Canada and spending in the US can be a tough call due to unattractive exchange rates, conversion rates, and foreign transaction rates that the users have to bear. Fortunately, there is a way out for you to finally own a USD credit card to manage your USD transactions while you live in Canada.
Wondering why is it important for users to pay in USD and why can't they do it with their Canadian credit cards. Well, you are going to find it all in this article along with some great USD credit card options that you can have in Canada. So, let's unveil some of the best USD credit cards Canada has to offer you.
Why have a USD credit card as a Canadian?
Well, some users earn in USD and want to spend in USD which is why they like to have a USD credit card. The major reasons users need a USD credit card include:
Frequent traveling: Some users travel quite often to the US for their business or leisure needs. If you are one of such users who is running a business in the US and needs to spend 6-7 months a year in the US then it is a preferable way to own a USD credit card to manage your expenses.
Currency diversification: Some users want to have currency diversification at their hands to manage their savings and keep another strong currency at their disposal.
Online shopping: if you just love to shop online at US stores then you might as well have an easy way to pay in USD without bearing any additional cost.
Why shouldn’t you use a Canadian credit card to pay in USD
The credit cards issued by Canada’s financial institutes surely allow you to make payments in multiple currencies but that comes at a cost. Usually, the cost involved with transactions in foreign currency including USD that users have to bear in Canada includes:
Conversion fee: Every time you use a Canadian credit card to pay in USD you are charged a conversion fee for converting Canadian dollars into US dollars. The fee is usually 1% but when charged for every single transaction it can cost you some huge bucks.
Foreign transaction fee: Many people confuse the conversion fee with the foreign transaction fee. In reality, these two differ in their purpose and amount. A foreign transaction fee is charged by your bank for conducting any foreign transaction. In Canada, most banks charge 2.5% of the total amount as the foreign transaction fee which can end up costing you hundreds of dollars a year.
Exchange rate: As you can expect, the credit card issuer converts the Canadian dollars into US dollars based on the inter-bank exchange rate which you will have to bear.
It's worth nothing that exchange rate doesn’t affect you much as it is charged on the inter-bank rate. However, if you sum up the conversion fee and foreign transaction fee then you will pay 3.5% additional charges on every transaction you incur which is quite substantial and no one wants to spend their hard-earned money just on the processing fees. This is why it is better to have a USD credit card if you frequently have to pay in USD to save these additional charges.
USD credit card Canada
Breaking the suspense now, here are some best USD credit cards that you can get in Canada. You can check out the features of all these best credit cards and decide which one suits your usage and needs.
BMO USD MasterCard
BMO also allows users to open a USD bank account with which they can link their credit card. This way you won’t have to go through the trouble of opening a USD bank account to pay your balance with.
The BMO USD MasterCard comes with an annual fee of $35 USD but it is subject to a spending offer. If you make purchases of USD 1000 or more in a year then your annual fee is waived. Isn’t it a great way to refrain from paying the annual fee, It is surely a piece of good news for frequent spenders.
You won’t get any attractive reward offers with this credit card but it is still loved by the users owing to its low eligibility criteria. The eligibility criteria for the card don’t require the user to have any specific annual income, a credit score of 600 is desired (which is quite low), the user has to be a Canadian resident at the age of majority, and must not be declared bankrupt in past 7 years.
This card also offers purchase protection and extended warranty which is a great relief for users. The purchase interest charged on this account is a whopping 20.99%.
RBC Visa Signature Black
If you don’t like to have the trouble of annual fee and also wants to earn great rewards then the RBC Visa Signature Black card is the way to go. This card comes with a $0 annual fee and offers RBC 1 as a reward point for every dollar spent. It also offers a Visa concierge service that helps in devising the travel plan including accommodation, dinner reservations, car rentals, and tickets to special events. The best part is that you can avail all these travel plan purchases by redeeming your RBC reward points.
And wait it gets even better. It also offers you travel insurance which provides coverage from flight delay to any sort of medical emergency during travel.
Also, the interest rate is 0% for the first 6 months. Afterward, you will be charged a prime rate plus a margin that depends on your creditworthiness and ranges from 9.99% to 16.74%.
Scotia USD Visa Card
This card known for its travel perks is available with an annual fee of $35 only. It comes with an extended warranty and purchase protection for every purchase. It offers you to save 25% on rental cars and AVIS. The best part is that you can add additional cardholders without paying any additional charges.
The interest rate charged on this card is 19.99 % on purchases from the card and 22.99% on cash advances. The eligibility criteria only require you to be a Canadian resident at the age of majority with a credit score of 660 which is quite achievable.
CIBC USD Aventura Gold Visa Card
For an annual fee of $35, you can enjoy the amazing offer of a CIBC credit card. The great thing is that the annual fee is waived for the first year. You can earn 1 point for every dollar spent on travel purchases and also 1 point for every $2 expense on other purchases through this card. This way you can earn reward points in two ways.
The card offers you accident insurance. The interest rate charged on purchases is 20.99% whereas for cash advances it extends to 22.99%.
To be eligible for this card you need to have an annual income of $15000, a credit score of 700, and a certificate proving you are a Canadian resident.
Meridian Visa USD Card
The annual fee of $65 seems like a lot for this card but the good news is that it is waived off for the first year. It comes with comprehensive travel insurance from trip cancellation to car rental insurance. This card also comes with a USD bank account. The interest rate for purchases is 19.50% whereas for cash advances it is 21.99%.
This card comes with a great reward system whereby you can earn 1 point for every dollar you spend. You can redeem these points for traveling, purchasing, gift cards, and as statement credits.
To be eligible for this card you need to have a credit score of 660 and be a resident of Canada at the age of majority.
What do you need to have a USD credit card?
Getting a USD credit card is not that simple in Canada. To apply for one, you need to have a USD bank account, an American address, and an American social security number. If you fail to provide all these required documents then you won’t be able to get your USD credit card in Canada. Luckily, many banks in Canada offer an easy way out to open a USD bank account but for that, you need to provide them with a source of income in USD with which you are going to operate the account. Though some credit card companies also allow you to have a USD credit card without having an American address you need to check it first with the credit card provider.
With these essential documents, you can get your USD credit card and use it without worrying about conversion costs and foreign transaction fees.
With the USD credit card, you can shop with greater ease when visiting the stores in person. For online deliveries, there might be the issue that they deliver your parcel to an American address. But do not worry because you can use package forwarding services in America that will ship your package safely to you at your address in Canada.