Apr 27, 2018

Credit cards and fine print

So we are off to Europe for an month in just two weeks.  Do we want to be running to the ATM every day or two?  Not really.  A credit card is the best way to go.

However 99.9% of Canadian credit cards charge 2.5% foreign exchange on each transaction.  What, you say?  So very true.  In fact there are now only two credit cards in all of Canada that do not charge the 2.5% FX per transaction.  One has no charge at all but its reviews are horrific and it takes from 8 – 10 weeks for the card to be approved and delivered.  All the reviews I have read say that customer service is practically non existent.  We went with the second card which has a $139.00 per year service charge and it was clearly the better of the two.

Did you know that some of the credit card companies take whatever currency you are charging, be it pesos or euros and then convert the amount to USD and then convert those USD to CAD which is what you pay 🙁  Some but few,  just go from the foreign currency to CAD dollars which is better.

But then 99.9% of Canadian credit cards add a 2.5% foreign exchange fee to each foreign transaction 😯   You must check the fine print on your credit card introduction paperwork.  That is a huge increase to each transaction, especially if  if you are traveling.  Do you know what your credit card is charging you ?

So I started to research non foreign exchange credit cards.  There are some very good ones that are MasterCard but as I already have a wonderful Westjet MasterCard with RBC we needed a new Visa card for Colin.  After having both of our cards compromised this last winter we have confirmed that we need a MasterCard (mine ) and a Visa for Colin.

So we decided to apply for a Scotia Bank Passport Visa for Colin.  The cost is $139.00 per year.  However one can get a supplemental card at no charge.  We have been going thru hell to get accepted, which is a first for us.  Our credit scores are excellent and we have  never ever been thru the third degree as we have  been, trying to get this card.  It has been a full week.  To date we have had to show our financial information for the past three years as well as all of our investment documents.  Yet they want more blood from our veins.

Our wish is to use the credit card as we travel to Europe in two weeks and then pay the balance off @ each statement and earn some nice travel points for the future.  Logical, si?  So we sit and wait and wait.  Worse case, we will just use our ATM card as we travel.  So here we are @ end of day Friday and no information.  Meanwhile last night I called my RBC Mastercard and asked for a limit increase (something I do on a regular basis with all of our cards. )  I was granted a $7,000.00 increase in less than 5 minutes with no questions asked 😯

Meanwhile we have discovered that part of the reason for the delay in the new Scotia bank card is that our address is different from what the credit bureau has for us.  Because of the different address they could not accept our excellent credit ratings and we had to start from scratch.

We have lived @ 315 since 2003 and moved in 2012 to # 319.  The credit folks still have us living at #315.  We moved to # 319 in 2012.  The only change in the address is one digit, from 315 to 319 and so I had to write a long letter today with many attachments proving our new address.  However here in Canada we have two credit agencies that watch over us, TransUnion and Equifax.  So I had to send a letter to both as I have no idea which or perhaps both have the error.

I spoke to a human at TransUnion today and he exclaimed at how high a credit rating I had, yet he could not change the address issue.  Meanwhile after 7 days we still are not approved for the credit card.  N0t quite true.  We are approved but for only 10K, we want a limit of at least 20K.  So we continue to wait.  The thing is, we don’t need the card but we just would prefer to not have to pay the 2.5% FX rate.  Yesterday I called my Mastercard company and asked for a limit increase.  In less that 5 minutes I had a 7 K increase with no questions asked.  But I don’t want to use that card in Europe as it has the 2.5% FX charge.  Worse case we will just make ATM withdrawals.

All I am suggesting, is that you check if you have to pay the foreign exchange of 2.5% or not on your card.  Secondly, is your credit rating correct or not.  We never thought of it but then when we apply for this new credit card, we were put thru the third degree and did not pass.  The funny thing is, is that with our current cards, our credit limit is just under $100,00.00.  So you just might want to check what your credit rating is.  In Canada there is no charge to obtain the information.  However in our case, the rating for us was fine but our address was mixed up and affected our credit 🙄

That was just one of the things I had to deal with yesterday…. 😕


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10 responses so far

10 Responses to “Credit cards and fine print”

  1. George Yates says:

    Good luck with getting your new card and enjoy your travels.

  2. Al McClughan says:

    I have taken the opposite approach to credit limits on credit cards, I actually had our credit limit reduced after a bank increased it without me asking, my rationale being that if the card is compromised and someone spends $$ they cannot spend a lot. I get around the lower limit by paying off the balance early if needed to give me some more space.

    For our US trips we use knightsbridge to convert C$ into US$, they charge 0.5% above the Bank of Canada rate and they do “bill pay” through the major banks, US$ goes into our US$ account to pay off the US$ credit card. I don’t know if they do other currencies or not.

  3. Remember Traveler Cheques? You won’t get around of having cash on you. In Europ, especially small towns you’ll encounter establishments that do not accept credit cards. They use debit cards which you don’t have from a Euro account.

  4. Barbara says:

    I, too, insisted my credit limit be lowered. They didn’t understand why I’d want it lowered at first – but my rationale was the same as Al’s (above) – and the limit was still high enough I could do whatever I wanted. My other thought was who in their right mind would charge up to that limit, or even near it?

    Also I have always had the same experience as Marlene (above) in Europe (just as in Mexico) – many establishments (other than larger hotels and five star restaurants) do not accept credit cards. It was never an issue to use an ATM every few days.

    Every so often my card company automatically raises the limit and I call again and say please don’t do that.

    Meanwhile have a wonderful trip!

  5. rae says:

    This is a good reminder to have your credit report pulled every year and to have discrepancies corrected immediately! I pull mine from Equifax.

    One thing Equifax explained to me that a lot of people don’t know is how credit score is only a tiny part of an application. You can have a super high credit score and still be considered a bad risk if you already have a huge amount of credit available to you compared to your income and/or if your existing credit is pretty much maxed out.

    I have a CIBC Aventura Gold Visa — the benefits and points I get from far outweigh the transaction fee you mention since I’m not a big spender. The annual free is $120, which is well worth it for the benefits I get — for example, when I was still living in SK and making border runs to MT or travelling to the Mexican border, my card provided me with automatic medical coverage in case of an accident. In fact, this is why CIBC advised me to get the card — the annual fee was much less than I was paying them for travel medical insurance. I’ve so far gotten one free flight out of the card and am close to getting another.

  6. SandyM says:

    Thinking maybe I would have taken the card at 10k and used ATM to fill in with cash if needed while on the trip and asked for an increase to 20k at the proper time.

  7. Dave Davis says:

    The higher your total credit line is, the better your credit rating will be. Your rating is largely based on your balance is your total credit line. Owing 10,000 on 100,000 gives a better rating than owing 10,000 on 50,000.

  8. I’m not a spendthrift by any means, in fact just the opposite, but is 2.5% really that much to worry about? If you have your tickets paid, and some of your hotels, and you spend $2000 u.s. that would be $50 u.s.

  9. We had no problems at all with getting approved with a $15,000 limit. Just had to send them a copy of our drivers licence as proof of address.

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