Today, I will post about choosing the best credit cards to save money to travel and while travelling.
As in my earlier posts, Canadian’s unfortunately have few credits card to choose from that have little or no fees. Canada has three commonly used types of credit cards: MasterCard, Visa, and AMEX. As I go out of my way to pay no annual fees and get points, I will stress no fee credit cards and their different purposes.
I recommend the no fee “Aspire Travel platinum MC”. Namely as it is the only credit card with no fees but still provides travel insurance and car rental insurance. You are also given travel points at a $1 to 1 point rate. On your first purchase you get 5000 points and anniversary points thereafter. I found that 10000 points equated to around $85 cash back.
Now this card but not give you a lot of travel points, but what other card is free and gives you car rental and travel insurance?
I find that relatively few retailers use AMEX in Canada. However, I got it as AMEX offers the Gold Reward Card. And its pretty awesome card.
For the first year, the annual fee of $125 is waived. If you spend $1 on day to day transactions you get 1 point. If you spend $1 on travel you get 2 points. If you spend $1 on gas and groceries you get 3 points. As a day to day credit card you get quite a few points quite easily. And if you spend $1000 on the first 3 months you received 15000 miles. I like these points because they transfer 1:1 with aeroplan points which I collect. 15,000 aeroplan points equate to a round trip around BC. Transferring points to Aeroplan is very painless and fast.
On top of that you get free travel insurance , and car rental insurance.
While this is a fee card, as I have had it for under a year I plan to rack up as much points as possible and cancel it before the one year is up. As we will be travelling extensively in Europe and Asia, AMEX is of little use to me.
Amazon.ca has a new Rewards Visa card. This card is going to be my go to card when I travel because of one feature found in no other Canadian credit card: No foreign transaction fees. Almost every other card I have seen charges 3% foreign exchange fee.
Here is what you can save by having 0% foreign exchange fees:
This is the float rate, the rate banks exchange at. That is when banks exchange millions of dollars per transaction. No individual gets this rate, well, maybe Bill Gates does.
This is the rate Visa is charging along with a 3% transaction fee your bank charges:
And this is the rate with 0% transaction fees, that’s pretty good! It is much better than the rate you would get withdrawing from the ATM.
What does this all mean?
Well say on an average month you are travelling you spend $1000 Euro on your credit card. At a 3% transaction rate on top of the exchange rate listed above you would be paying $1341.93Cad while at 0% transaction rate I would only be paying $1302.84Cad. That is a $39.09 saving PER MONTH. In a year your savings would be $469.08!!!
So there you have it. If you are saving money to travel long term and then spending it.
1) Get the AMEX a year before departure and rack up some points buying flights, gas, and groceries. Make use of the insurance during your day trips and short breaks out of the country. Transfer those points and cancel the card before the annual fee starts.
2) Get the Capital One card for times when AMEX don’t work at retailers (frequently in small stores). Also bring this card for travelling when a Visa card is not accepted. Use this card for day to day banking for the times before you have an Amex and after you cancel your Amex to get points.
3) Get the Amazon card as your travelling card.