
An increasing number of Canadians need access to U.S. Dollar banking services — whether for travel, investment, savings or even living part time in the United States. Fortunately, Canadians have never had more choice when it comes to U.S. Dollar Bank Accounts and Credit Cards.
Mr. Thrifty is here to guide you through your cost-effective options.
U.S. Dollar Banking Services with a Canadian Bank.
For the individual who has an occasional need to hold and spend U.S. Dollars, most of the Canadian banks offer perfectly adequate U.S. Dollar banking services, at a (surprisingly) reasonable cost. If you travel fairly frequently to the United States, Mr. Thrifty strongly recommends considering both a U.S. Dollar Bank Account and a U.S. Dollar Credit Card.
Why a U.S. Dollar Credit Card ?
Avoid the Foreign Currency Conversion Fee; Save on the Exchange Rate.
A U.S. Dollar Credit Card is a money-saving option for Canadians who earn income in U.S. Dollars.
First off, you will you avoid the annoying foreign currency conversion fee that many Canadian credit card issuers charge. However, even if you have a credit card with no foreign currency conversion fee, you will lose money on the exchange rate. A U.S. Dollar Credit Card solves both issues. For more suggestions on How to Save Money When Exchanging Currency, read our full article. A U.S. Dollar Credit card will also allow you to readily take advantage one of our strategies to save money on air travel.
But the savings don’t just end there…..
Return Items Without Being Charged (!)
Have you ever purchased and then returned an item charged to your Canadian credit card in a foreign currency ? If so, you may have lost money for, effectively, doing nothing (say what ?). That’s because the purchase and return are converted into Canadian Dollars on their respective transaction dates – leaving open the possibility you will not receive a full offsetting credit on your card when you return an item. Hard to imagine a better example of a pure waste of money. A U.S. Dollar Credit Card solves this issue as well.
Comparing U.S. Dollar Banking Services at Canadian Banks.
The chart below provides a snapshot of the U.S. Dollar Bank Accounts and Credit Cards currently available from the major Canadian banks.
Bank / Product | Monthly Fee | Minimum Balance to Avoid Monthly Fee | Credit Card | Credit Card Annual Fee |
BMO – BMO U.S. Dollar Account | $4 | $4,000 | BMO U.S. Dollar Mastercard | $35 – rebated if annual purchases >=$1,000 |
CIBC US$ Personal Account | $0 | n/a ($0.75 per transaction) | CIBC U.S. Dollar Aventura Gold Visa Card | $35 – waived if you have a CIBC US$ Personal Account or a CIBC Bank USA Smart Account, and a premium CIBC personal credit card |
RBC Canada – U.S. Personal Account | $2 | n/a (note: monthly fee includes 6 debits/month) | U.S. Dollar Visa Gold | $65 |
Scotiabank U.S. Dollar Daily Interest Account | $1 (waived for seniors) | $200 | Scotiabank U.S. Dollar Visa Card | $35 |
TD Canada Trust – U.S. Daily Interest Chequing Account | $0 | n/a ($1.25 per transaction; waived if minimum balance of $1,500) | TD U.S. Dollar Visa | $39 |
TD Canada Trust – Borderless Plan | $4.95 | $3,000 | TD U.S. Dollar Visa | $39 fee – rebated with Borderless Plan |
As you can tell, all of the above packages are pretty similar — however, if you are looking to have both a U.S. Dollar Bank Account and a U.S. Dollar Credit Card (and are not already a CIBC premium card holder), BMO and TD Canada Trust provide cost- effective options which will allow you to avoid paying an annual fee (and we know how Mr. Thrifty likes to avoid annual fees on credit cards). If you are interested only in a U.S. Dollar Bank Account, the TD U.S. Daily Interest Chequing Account and Scotiabank U.S. Dollar Daily Interest Account stand out as value offerings.
But Wait – There’s More
Canadians with more substantial U.S. Dollar banking needs can open U.S. Dollar Bank Accounts and U.S. Dollar Credit Cards directly with U.S. banks – for more detail, stay tuned for Part II of our series. Better yet, sign up for our newsletter and be notified when Part II is published.
Excellent piece! Do you know how Scotiabank defines ‘seniors’? I read that the AARP membership starts at age 50.
According to Scotiabank’s website senior banking discounts are available to persons 60 years and older.