If you use a credit card when you travel—as many Canadians do—you may be paying for more than you think. The fact is, most regular credit cards charge extra fees, especially when you make purchases in foreign currencies. The fees can really add up—and they’re not something travellers typically budget for.
How can you avoid credit card fees? When you use a prepaid card for travel like the EQ Bank Card, there’s no extra foreign exchange (FX) fee or international ATM withdrawal fee added by EQ Bank, helping more of your budget go towards travel instead of bank fees. To discover how much more money you could put towards your trips, take this travel challenge: can you reclaim $100 in wasted fees? (And what will you buy with this extra cash?) Let’s get started.
Fees to watch out for while travelling
Here are some of the top money traps where using your credit card will cost you—and how to avoid them.
Online bookings
When you use a regular credit card to book a flight, accommodations or a tour in a foreign currency, you might have to pay an additional foreign exchange fee (FX fee), usually 2.5% on top of the purchase price. This includes purchases made online and in advance. On a hotel booking of $500 for two or three nights, for example, 2.5% amounts to $12.50 in extra FX fees—maybe enough for an extra appetizer at dinner.
Cheat code: The EQ Bank Card does not charge extra FX fees—just the Mastercard exchange rate—and gives you 0.5% cash back on every purchase.
Airport currency booths
The first thing you’ll need when you land at your destination is local cash, so you might head to an airport currency exchange kiosk. Tourist, beware: you might end up paying hidden fees and lose money on the exchange. As a general rule, airport kiosks tend to offer poor exchange rates and extra FX fees. And, if you use your regular credit card at an airport kiosk for the purchase, you’ll likely be on the hook for an extra 2.5% FX fee on top of everything else.
Cheat code: Instead of airport currency booths or a regular credit card, consider loading your spending money onto a prepaid card. With the EQ Bank Card, your currency exchange is always at the standard Mastercard rate, and there are no extra FX fees when you make a purchase.
Automated bank machines
At smaller businesses, at the market or in remote locations, you might have to pay with cash. The problem is, when you use foreign ATMs to withdraw funds with a debit card, you can get hit with a bunch of fees. There may be a 2.5% FX fee, plus a service fee from the foreign bank or ATM network, and potentially even a service fee from your home bank. Together, these fees can stack up significantly, depending on how much you take out.
Cheat code: EQ Bank does not charge you an added service fee to use an ATM internationally. Even better, it will reimburse you for any ATM service charge added by other banks within Canada—perfect for staycationers.
Foreign point-of-purchase sales
If you whip out your regular credit card to pay for restaurant meals, shopping, taxis or other expenses on a POS machine, you guessed it right again—you’ll likely be hit with that 2.5% FX fee.
Cheat code: Your EQ Bank Card is accepted everywhere that takes Mastercard, and there’s no extra 2.5% FX fee. You’ll earn 0.5% cash back on every purchase, and your money accrues the same interest on your card as it does in your EQ Bank Personal Account. That’s 1.25% on every dollar, or 3.5% if you set up direct deposit for your paycheques (minimum of $2,000 per month). The EQ Bank Personal Account has no minimum balance and no fees for everyday banking.
EQ Bank disclaimer
Interest is calculated daily on the total closing balance and paid monthly. For the EQ Bank Card, interest is paid into the linked Personal Account. Rates are per annum and subject to change without notice. For the Personal Account, Joint Account and EQ Bank Card, the current base interest rate is 1.25% (the “Base Rate”). Customers who add and maintain qualifying recurring direct deposits of at least $2,000/month to a Personal Account or Joint Account are eligible to earn a bonus interest rate of 3.50% (the Base Rate plus an additional 2.25%) for the eligible accounts (the Personal Account, Joint Account, and the EQ Bank Card balance). Conditions apply. Please review the EQ Bank Bonus Interest Offer Terms and Conditions for details.
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EQ Bank Personal Account
- Monthly fee: $0
- Transactions: Free, unlimited transactions
- Interest earned on balance: Up to 3.50%
- Welcome offer: None at this time
Reclaiming your money: How much can you save?
Now that you know where the travel traps are, it’s time to see what you can reclaim. If you need a target, try for $100 in fees and charges—enough for a fancy meal, an extra night in a hotel or an exciting excursion. Get started with the EQ Bank Card. Signing up is easy:
- Open and fund a Personal Account at EQ Bank.
- Order a free card in a few quick taps.
- Once you receive and activate your card, add money to your card from your Personal Account.
- Use your card for purchases during your travels and keep more money in your pocket.
Your dream trip will require a lot of expenses, but fees shouldn’t be one of them. Use your EQ Bank Card for travel and put your savings to better use.
This article is sponsored.
This is a paid post that is informative but also may feature a client’s product or service. These posts are written, edited and produced by MoneySense with assigned freelancers and approved by the client.
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Read more about travel:
- Top ways that credit card fees sneak into your trip
- Prepaid cash back cards: A new way to manage your spending
- How to find cheap flights to anywhere
- 5 inexpensive travel destinations while the Canadian dollar is weak
The post Travel challenge: How much can you save in FX fees this summer? appeared first on MoneySense.