credit card

Dundas Square - TorontoIn my Monthly Savings Recap for February I said I’d summarize the tips from there in a more clear and concise way. In short, here are the tips and ways of thinking that led me to save during that month (and in my day-to-day life). Today I am talking about the Credit Card.

The first time I saw this credit card was when I was checking out some stuff at A banner said “Get $20 back in this purchase when signing in for the Credit Card”, or something like this, I don’t remember the exact words.

At that time I didn’t like credit cards that much. I used to think about them as a burden, as just one more thing to manage and worry about. I had my bank credit card, why on earth would I want another one? Today I see I was wrong. There are plenty of reasons on why you should want to have another credit card.

Talking about the Amazon.CA Credit Card, specifically, the reason is no foreign currency conversion fees.

The foreign currency conversion fee

Most of credit cards around will charge you with a 2.5% fee when converting your expenses in foreign currency. What does this mean? It means that if you use your credit card to buy something outside of Canada and you are paying in any currency that is not Canadian Dollars, you will pay 2.5% over the purchase total as a conversion fee. This includes, of course, purchases made over the Internet in US websites and stores.

So, if you buy something online at an American store, your credit card will charge you 2.5% more for that transaction. Sweet, eh? Some people claim that the total fees can add up to FOUR PERCENT when considered the exchange rate that Visa or Mastercard apply and the conversion fee your credit card will charge on top of that.

It may seem it’s not much, but think about a small trip abroad. If you pay your tickets, your rental, your food, gifts, shopping, everything with your credit card, you will see the costs of this trip to rise. “C’mon, Dan! It’s only 4%” — you are thinking this right now, I know. So let me ask you something: how hard do you have to work to make your money grow at a 4% a year rate? What would you say if I come by and say “Hey, from now on you will have a 4% cut in your salary”?

If you are anything like me, you use your credit card a lot. When you think about 4% over a lot of things, this 4% is a lot of money. But, heck, even if it’s only $4, THESE ARE MY FOUR DOLLARS, and if I can find a way to avoid companies from taking them from my wallet, I’ll do it! Credit Card

The Credit card does not charge the 2.5% fee over foreign currency purchases, what makes it a great card if you buy a lot of stuff in US$ or if you are planning a trip abroad. Of course, there are better cards for travelling, but as a general purpose card, the Credit Card is a nice option.

Besides, it gives you 1% cash back for every purchase outside of, and 2% cash back for purchases at When you reach $20 in cash back, it’s automatically added to your card statement as a credit. Easy as pie, you don’t have to worry about redeeming points or spend them before expiration: your points never expire.

Another strong point about this card? There is no annual fee.

As my fellow blogger Barry, from Money We Have wisely says:

Final word
It really doesn’t matter how many credit cards you use as long as you’re paying off your full balance on time every month. If you’re only making minimum payments then it might be a good idea to cut up some of those cards and reduce your limit.

* Photo by Flickr user Jamie McCaffrey
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