If you’re a Canadian who spends time in the United States, you already understand the hassle and cost of dealing with foreign currencies. Exchanging cash can be expensive—and carrying it insecure. Although Canadian credit cards are accepted in the United States, there’s almost always a pricey foreign currency conversion fee tacked onto your purchases. Routinely coming in at 2.5% of your purchase value, this means you’re paying $51.25 for a $50.00 meal. This might not seem significant, but it can add up quickly. That $1,000 you spent in the States costs you an extra $25.00 right off the bat. Luckily, there’s one way to get around this extra cost: apply for a U.S. dollar credit card.
The Best U.S. Dollar Credit Cards for Canadians
|Credit Card||Annual Fee||Special Feature||More Info|
|BMO® U.S. Dollar Mastercard®*||$35 USD||Spend $1,000 USD in one year, and the annual fee for the following year is free||Learn More|
|Scotiabank ® U.S. Dollar VISA* Card||$35 CAD||Purchase security and extended warranty protection||Learn More|
BMO® U.S. Dollar Mastercard®*
The BMO® U.S. Dollar Mastercard®* from the Bank of Montreal features a low annual fee of $35 USD, plus an incentive that if you spend $1,000 USD on the card in a year, the following year’s annual fee is waived. Additional perks are aimed at the consumer/traveller—perfect for your cross-border shopping journeys:
- Free extended warranty and purchase protection
- Zero Dollar Liability which protects you from unauthorized use of your credit card
- 24-hour, out-of-country emergency assistance with GlobalAssist
These perks combined with an accessible $15,000 minimum income put this card near the top of our list for low-barrier U.S. dollar cards.
Scotiabank ® U.S. Dollar VISA* Card
Similar to the BMO card above, the Scotiabank ® U.S. Dollar VISA* Card combines a low $35 CAD annual fee with standard perks for a basic U.S. dollar card:
- No U.S. dollar currency conversion fee
- Purchase security and extended warranty protection
- Free supplementary cards
- Up to 20% off base rates at participating AVIS car rentals
Plus, if you’re a cross-border shopper who uses a car rental service, the partnership with AVIS could make this a winning combination.
Why Get a U.S. Dollar Credit Card?
Several banks in Canada offer U.S. dollar credit cards, and the benefit is clear. With frequent purchases and payments done in U.S. dollars, you’re able to avoid exchange rate surprises and skirt the costly conversion fees altogether. They’re aimed at Canadians who spend a lot of time south of the border, or who spend a lot of time shopping online at U.S. retailers.
It’s geared for people who are regularly making purchases in the United States. This can include:
- Canadians who travel frequently to the U.S. (whether it’s 3 times a year or weekly)
- Canadians who charge work-related or personal purchases from U.S. retailers and vendors
- Canadians who also have a U.S. dollar bank account
- Canadians who live in the States for more than a quarter of the year
Getting a US dollar makes good financial sense if you have a US dollar bank account and have the money to pay off your credit card in US dollars without converting currency. For example, if you have a steady source of US clients that pay you in USD, you can just make a payment to your US credit card and avoid converting the currency (which often means losing some money during the process) and incurring fees. Just remember: having a stream of USD dollars is important because otherwise, you’ll need to constantly convert Canadian dollars to US dollars – which will end up costing you in foreign transaction fees.
US Dollar Credit Cards vs No Foreign Transaction Fee Credit Cards
Although both are geared towards making foreign purchases, US dollar credit cards and no foreign transaction fee credit cards are quite different.
When you make a purchase using your US dollar credit cards, the charge appears in US dollars and you pay the balance in US dollars. US dollar credit cards are perfect for Canadians who are frequent travellers or shoppers in the US and/or get paid in US dollars.
In contrast, no foreign transaction fee credit cards charge your non-Canadian purchases (whether from the US or abroad) in Canadian dollars, and you pay off the balance with Canadian dollars. The benefit is that they don’t charge a foreign transaction fee to make the currency conversion, whereas other credit cards will often ding you a certain percentage (usually 2.5%) for non-Canadian charges to your card. Using a no foreign transaction fee credit card in Canada won’t cost you a dime, so it’s totally worth having one in your wallet.
How to Get a U.S. Dollar Credit Card
Applying for a U.S. dollar credit card issued by a Canadian bank is a cinch. It’s the same process as applying for a Canadian credit card: complete an online credit card application or go into a local bank.
However, if you’re applying for a credit card issued by American banks, you may need to have a U.S. address to get approved.
The Verdict: Should You Get a U.S. Credit Card?
It really depends on your circumstances. You may need to do a little math to figure out if it’s worth it for you to get a U.S. credit card. One thing to notice here is that almost all of the cards on our list have an annual fee, so it’s wise to compare your spending habits against the cost of using a U.S. dollar card. Crunching the numbers, it may also make more sense to get one of the best travel rewards credit cards in Canada instead.
As a general rule, there’s a benefit to using a U.S. dollar card once your spending reaches around $3,000 USD annually. The quick math on this: at a 2.5% currency conversion rate, you’re paying $75 yearly —just a bit more than the annual fee of most of these cards. If you’re spending more than that (and remember: this includes online shopping), it may be worth adding a U.S. dollar card to your wallet.