Are you someone who has some income in U.S. Dollars and a U.S. Dollar bank account? Do you also make a lot of purchases in American currency?

If so, a U.S. Dollar credit card could be a great addition to your wallet.

Each time you make a purchase in foreign currency, the majority of credit cards will charge you a foreign transaction fee of 2.5% (find out more about Canadian credit cards with no foreign transaction fees here).

If you would prefer to avoid exchanging at least some of your U.S. currency (banks don't always have great exchange rates either), a U.S. Dollar credit card could be a great option.

How U.S. Dollar cards work

How do U.S. Dollar cards work? You make all of your purchases in American Dollars. When it comes time to pay your bill, it also has to be paid in USD, from an account that has funds in USD.

This is how they save the currency transaction fee – everything happens in USD. If you make purchases that aren't in USD (including Canadian dollars), you'll get charged the normal 2.5% currency conversion.

You can learn more about U.S. Dollar cards here.

There aren't many USD cards in Canada, but here's a top option:

TD U.S. Dollar Visa card

This card may not offer rewards, but if you frequently make purchases in USD and have a USD bank account, it will save you on currency exchange fees.

What's more, the already-low annual fee of US$39 is waived as long as you have a TD Borderless Banking account. This plan has a monthly fee of $4.95 USD, which can also be waived by maintaining a daily balance of $3,000 USD.

Despite having a low annual fee, this card goes above and beyond when it comes to its insurance package. 7 different types of travel and purchase insurance are included at no additional cost.

On top of all that, this U.S. Dollar card will help save you money when you rent cars at Avis and Budget locations worldwide.

If you're tired of paying foreign transaction fees because of your U.S. shopping, this could be a great option for you.

Credit cards that waive foreign exchange fees

If you don't have a U.S. Dollar bank account, this card won't be for you, since you won't have an efficient way to pay it back.

And if you're thinking "I can just get a U.S. Dollar bank account and transfer funds to it" – the banks don't have the greatest exchange rates either. These types of cards are really only useful if you also have an income source in U.S. Dollars and want to save having to convert it to Canadian currency.

If that doesn't sound like you, check out our listing of the top credit cards that have no foreign exchange fees instead. On top of saving 2.5% on your purchases, you'll also be able to earn rewards with them as well.