Earlier this year, Chase Canada launched the Amazon.ca Rewards Visa card. At first glance, this looked like just another gimmick rewards card where you earn more points for shopping online at Amazon.ca, and not much anywhere else.
However, a unique feature of this card is when you shop outside of Canada you don’t pay foreign conversion fees – in other words, make a purchase with your Amazon.ca Rewards Visa Card in a foreign currency and pay only the exchange rate.
Save On Foreign Conversion Fees
In addition to exchange rates – which are set by MasterCard or VISA – most Canadian credit card issuers charge a 2.5 per cent foreign currency transaction charge on foreign purchases – which adds up to millions of dollars unnecessarily spent by Canadian travellers.
Sears Financial is also getting in on the act, and as of July 23, foreign currency transaction charges will no longer be incurred on Sears Financial MasterCard and Sears Financial Voyage MasterCard.
This is a welcome change for Canadians who frequently travel abroad and with the strength of the Canadian dollar, will make overseas travel more affordable – especially for those vacationing on a tight budget.
A recent Statistics Canada survey found that during the first quarter of 2012 travellers spent $8.3 billion outside the country, $5 billion spent in the United States alone. These numbers include “snowbirds” who travel to warmer climates, and suggest Canadians pay millions of dollars a year to use their credit card abroad.
Sears Financial spokesman, Peter Kalen says many of their customers are snowbirds and they will benefit significantly from this change.
Despite the new movement toward eliminating foreign conversion fees, some of the bigger Canadian card issuers won’t be following suit. According to Capital One spokesman Andrew Clarke, there’s no plan to change their foreign transaction fee policy in Canada at this time.
When you’re travelling overseas spending $5,000 on your credit card in a foreign currency, you’ll save $125 in conversions fees with the Amazon or Sears cards.
Kalen says that while many travellers will continue to incur additional charges on all their foreign purchases, over two million Sears Financial MasterCard cardholders can enjoy the freedom to spend without being charged an additional 2.5 percent on foreign purchases. He also sees this as a positive move for Sears Travel customers.
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Travelling is expensive enough when you consider the cost of flights, hotels and rental cars. If you’re a frequent traveller, take a look at how much your credit card issuer is charging in foreign exchange and conversion fees and find a way to minimize the fees.