Credit Cards & Cash – 34 days to go

Foreign Conversion Fee Credit Card

We have had a couple posts about the fun stuff, now it is time for some money matters Any dollar I can save is something Isabella can spend later at LEGOLAND. For some reason, I showed the kids LEGOLAND clips on YouTube and now we have to fit that into the budget. So here are two ways we plan to stretch our dollar.

Let’s start with credit cards. From the beginning, we wanted two different branded cards on the trip (a Visa and an Amex). If one particular card was not accepted, or one got compromised then we would always have a backup. This never was a necessity in our daily life so we needed to go hunting for a new card. Where to begin? Fortunately, there are amazing sites out there that showed us the pros and cons of the different credit card offers. Type “best credit cards in Canada” into Google, and you’ll have enough reading material for weeks. During our research, we realized we should have cards we used BEFORE we travel (i.e. during the planning) and then cards we should use when we were ACTUALLY TRAVELLING. This was new for us and so far it has saved us a large bucket of money.

Now let’s talk about the card we wanted BEFORE we went travelling. For us, the decision was centered on getting a card that would earn as many points as we could. But the points needed to be valuable, meaning we could and would use them. Sorry, but movie theatre points do not mean anything to us! We signed up for a couple lucrative bonus offers for a couple credit cards and put those points towards flight and hotel redemptions for the trip. The bonus offers essentially paid for planned flights across the pacific.

Getting the credit card we actually wanted to use when we TRAVELED was a different scenario. I fell down a wormhole here. The strategy for this card was to avoid as much “cost” as possible. This card was NOT about points. In the beginning, I had no idea how foreign exchange rates were calculated and then passed on to the Canadian cardholder. If I understand correctly, if you make a purchase in a foreign currency, the price gets converted to US dollars first and then converted to Canadian. Think of trying to do that math every time you make a purchase. Mathemagics aside, the part that really hurts is that for every one of these transactions our credit card provider tacked on a 2.5% fee. I don’t have any points program that can consistently offset that type of markup. And since 75% of our purchases were going to be in foreign countries over the next year, I didn’t want to pay an extra 2.5% on our big tickets expenses. Or look at it differently, that’d be like 4 days of travel being spent solely on foreign exchange fees on a card. That hit home hard. So we went ahead and got ourselves one of the few credit cards in Canada that charges no foreign transaction fee. Yep, the paper actually shows 0%. Whatever is the exchange rate that day is what you get charged. Just got those 4 days back. The only real drawback is the actual other perks of the card are kind of meh, nothing really exciting. But sometimes 250bps is all the excitement I need (I will miss my day job).

Kick myself moment #1: All the times I purchased Christmas gifts from US websites not realizing I was paying an additional 2.5% every time.

Kick myself moment #2: On my recent vacation thinking it was better to pay with my credit card instead of paying cash because I was getting 1.5% back in points. Even Julie knows that one is less than two.

The second piece was how to get cash when travelling? Cash is more widely used in some of the countries we are going to visit so we can’t put everything on our credit card. When I first went travelling almost two decades ago, travelers cheques were a viable consideration to get cash, but now the ATM is the leader. And we all love ATMs don’t we?

In Canada, some ATM fees are pretty steep and we try to avoid them. Internationally it is next to impossible to avoid but we’ve gone ahead and given ourselves the best chance to do. We opened a bank account with a bank that gave us access to the Global ATM alliance. It is a group of international banks that let you use each other’s ATMs without a fee. Not all of the countries we go to have banks affiliated with the alliance but it is a good starting point. I can’t wait to see a WestPac bank in Australia. Yep I’m a nerd like that. On top of the new bank account, I also got $350 for jumping through some hurdles and automating some bill payments with this new bank. I love when I get paid to take advantage of a service. More money for the trip.

Confession time. I showed Isabella the LEGOLAND clips because I was the one who really wanted to go. They have a water park there with floating bricks in the lazy river. How cool is that? A ticket costs $43.40 or $44.52 depending on if you wanted to pay more.

Ciao for Now

Mike

One thought on “Credit Cards & Cash – 34 days to go

  1. Muhammad Abbas June 1, 2022 / 9:56 am

    I hate the 2.5% fee too! I’ve always used my Bank of America Travel Rewards card for foreign travel. No annual fee and no foreign transaction fee. When I need to pay the bill, I transfer money from my RBC x-border account.

    Like

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