Essential tips on using credit cards for international travel

Which card is best for international travel?

The first important factor to consider is the card’s features. For frequent international travellers, look for a card that offers no foreign exchange fees or cash back on the fees. Many cards charge 2.5% of the purchase amount to charge a foreign currency back onto your credit card, on top of the credit card network’s exchange rate.

Credit cards that boast no foreign exchange fees include:

Moreover, keep an eye out for travel perks and insurance. Many travel credit cards offer tangible benefits like Priority Pass or DragonPass lounge access, concierge services and travel-related insurance protection in case your journey is disrupted by an unforeseen event. These cards can provide significant value on a purchase you’re making anyway, but it’s essential to research and find the right card for your needs.

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What is the most accepted credit card for international travel?

When determining what card you need for international travel overseas, you’ll want to consider flexibility and acceptance. While you won’t have to worry about which bank your credit card is from, the network is what matters. Visa and Mastercard credit cards are widely accepted internationally, with American Express cards — that typically offer exceptional reward programs — less accepted but growing in popularity outside North America.

A good rule of thumb is to have a backup payment option on a different payment network in case the card you’d prefer to use is not accepted by a merchant.

What are international credit cards?

An international credit card is just like an everyday credit card in Canada but enabled for use abroad. Most domestic credit cards — credit cards issues by Canadian banks, fintechs and financial service providers — can be used internationally. They are enabled by default or with a simple authorisation on your bank’s mobile app or call centre. Simply go online, or call, to alert your card provider of your travel dates and countries, and a note will be added to the account so their fraud detection systems don’t lock your card while travelling.

Transactions can be identified by type of charge, country of use, and foreign currency charged back.

For travellers looking for a credit card for travelling, good options include:

• American Express Platinum card: Cardholders get a $200 annual travel credit plus $100 NEXUS statement credit as well as discounted parking and air fare (when booked through Amex).
• American Express Gold card: Cardholders get a $100 annual travel credit and a NEXUS statement credit, along with complimentary Priority Pass access to airport lounges and a lower annual fee.
• BMO Air Miles World Elite Mastercard: Rack up Air Miles points quickly with 3x the miles earned at participating partners. Cardholders also get concierge services, lounge access and emerency travel insurance coverage.
• Rogers Red World Elite Mastercard: Explicitly designed for use abroad with unlimited 3% cashback on US dollar purchases, or 1.5% cashback on all other purchases.

Is it worth it to have a US dollar credit card?

Many central banks offer US dollar credit cards for those who frequently spend south of the border in the United States. These cards enable you to make purchases in US dollars without credit card foreign currency conversion fees, ideal for those who live part of the year in the US, spend online in USD, or have a US dollar bank account.

As getting a US credit card requires a Social Security Number or Individual Taxpayer Identification Number, this becomes a major barrier for Canadian citizens and permanent residents to access competitive products offered in the US. Having a domestic credit card that offers many of the same features and perks will allow Canadians to save on foreign exchange fees and conversion rates along the way.

Bottom line

Once you have a credit card that offers no foreign exchange fees or cashback on charges made in a foreign currency, be mindful always to select to charge the fees in the local currency when checking out. Banks will automatically convert the charge to Canadian dollars using their exchange rate. However, it will still be cheaper than if you choose to do the conversion on the charge terminal before it’s posted to your account.

If you frequently make international charges, consider choosing the right credit card, which offers an attractive suite of features like lounge access, travel and purchase protection, and medical insurance if something unexpected happens.