I’m of the opinion that everyone should have the least amount of credit cards they can get away with in their lives. Credit cards, for the most part, are not your friends. Despite this personal mantra, I am thinking about getting another credit card. Hear me out. In this case, I might get a credit card that is billed and paid in U.S. dollars. Of course, this type of card is only useful if you plan on traveling to the United States. There is a chance I might have two trips to America in the next twelve months or so.
If you take your Canadian credit card to the U.S. and use it, there are several disadvantages to that. First, you incur the wrath of the currently very unfavourable exchange rate. Second, your bank will tack on a 2.5% exchange rate fee on top of the terrible exchange rate. How does a U.S. dollars credit card avoid these pitfalls? These cards don’t have the 2.5% exchange rate fee because all transactions are done in American dollars. There is no exchange of currencies. Unfortunately, these cards can’t directly avoid the bad exchange rate. There is no way around that. It does allow you to pay for your credit card bill with the American greenback though. This means that if you have a stash of American cash lying around, nothing ever gets converted. You are billed in U.S. dollars and you pay with U.S. dollars. Fortunately for me, I already have a U.S. dollars savings account that I put all my proceeds from selling EA stocks. Because of this, I would be completely insulated against the bad exchange rate and any additional fees.
Of course, nothing is ever perfect and in this case, these type of credit cards always have an annual fee, ranging from $35 to $65 USD depending on which card you get. If I were to spend very little using the U.S. credit card (by using cash instead for example), then it wouldn’t be worth it. Still, it’s something I will consider.