Do you travel to the United States often?

Do you make a lot of purchases in U.S. currency, and have a U.S. Dollar bank account?

A U.S. dollar credit card may be for you. And one of the rare options in Canada is the BMO U.S. Dollar Mastercard.

Whether online or while shopping in the USA, did you know that each time you make a purchase with your Canadian credit card you're charged a high foreign transaction fee (usually 2.5%)?

Here's what this card offers, and how it avoids that 2.5% charge.

BMO U.S. Dollar Mastercard details

There isn't much to discuss in terms of perks and features when it comes to the BMO US Dollar Mastercard.

It's a basic BMO Mastercard that doesn't offer rewards on purchases. As for insurance, it does come with basic extended warranty and purchase protection insurance.

And this package has an annual fee of $49 USD. That said, this fee can be waived every year you have the card, so long as you spend US$3,000 annually.

So if you're thinking, why should I get this BMO credit card? The next section will answer those questions.

Why get a U.S. dollar credit card?

For the right person, a USD credit card can save you on foreign transaction fees.

Most credit cards charge a foreign exchange fee of 2.5% on purchases that aren't made in Canadian dollars. But when you use a USD credit card, this fee doesn't apply, as long as purchases are made in U.S. dollars.

Why? With a U.S. dollar credit card, you have to pay off your bills in U.S. dollars. And this is how they avoid fees – there isn't any currency being converted. You buy something in USD and pay it off in USD.

Just note that if you use your USD credit card in purchases that aren't in U.S. dollars, and you'll be charged the typical 2.5% fee.

Also note – since you're making payments in U.S. dollars, you'll need a USD bank account to pay your bill (the big 5 banks all offer them).

Foreign transaction fee savings

While you might be thinking that 2.5% doesn’t seem like all that much, it can really add up quickly. Especially when you realize that foreign transaction fee is ON TOP of the tax you’re already paying. Plus why pay something when you can get it waived?

Check out this chart to see how much money you could be wasting:

A U.S. Dollar credit card is a nice way to cut back on those fees.

Would this card be good for you?

So, when do U.S. Dollar credit cards make the most sense?

Here's a few instances where a USD credit card may be right for you:

• If you earn or have existing United States currency that you can use to pay off your credit card bill.
• If you make many trips to the United States for work, to escape the snow, or for scooping up deals across the border and have a USD bank account where you keep some U.S. Dollars you got at a good exchange rate.
• If you frequently make purchases online from American retailers.

Not sure a U.S. Dollar card is what you’re looking for?

For many who spend in foreign currency, a U.S. Dollar credit card probably won't be for you.

From needing a USD income or stockpile of U.S. dollars, to requiring a USD bank account, there are hoops to get through to be able to use this card to its full potential.

Perhaps one of the Best Foreign Exchange Credit Cards would be better suited for you.

These cards simply skip the 2.5% fee on any foreign currency purchases – everything gets converted to Canadian dollars without that little fee tacked on.

For most, these credit cards are the way to avoid paying foreign currency conversion rates.

In summary

If you need a U.S. dollar credit card, the BMO U.S. Dollar Mastercard is one of the few options you have in Canada.

And it's a good choice, simply because you can get the annual fee waived every year just by spending at least $3,000 USD annually.

FAQ

How many U.S. dollar credit cards are there in Canada?

There are very few U.S. dollar credit cards in Canada – 4 in fact. You can view more of them here.

What does the BMO U.S. Dollar Mastercard offer for rewards?

Unfortunately, the BMO US Dollar Mastercard doesn't offer any rewards on purchases. It only provides savings on foreign transaction fees for purchases made in USD.

What is the annual fee of the BMO U.S Dollar Mastercard?

The BMO US Dollar Mastercard has an annual fee of US$49, which can be waived every year by spending US$3,000 annually.