Choosing a secondary Travel Credit Card

[Mikamarii]

Hey all,

Thought I'd post this for fun discussion and thoughts. I put this on the budget board but many aren't familiar with Canadian Credit cards.

Ok so background...Me/DW and two kids (7 and 5). Near perfect credit scores and only debt is Mortgage and 2 nearly paid off car loans. We have no other debts and haven't paid interest on a credit card in about 20
years!. We love credit cards....charge everything to them/collect points/pay off on pay day/repeat!

We have 2 credit cards right now. West Jet MC World Elite and Royal Bank Signature Black (US$ CC that replaced another US CC we had). We've had the WJ card for several years and got the Black card less than a year ago. The main reason we got the black card was that we were DVC owners and it was easier to pay dues with a US$ CC and Chequing account. We spent a lot of time in the USA so having a bank account and CC was a big convenience. We sold DVC this year and our plan is do more travelling outside North America now that kids are getting older.
The annual fee on our WJ card (and companion card) is waived by our bank. We pay 40$ US for our US chequing account and CC (about 55 Cdn/year)

We loved having a USD CC to avoid foreign transaction fees on US purchases. It made things simpler and saved us some money. We put about 3K US on our card last trip so that alone saved us about $150 in exchange fees. Plus came with insurance packages so when we rented cars etc it covered that. But the big thing is the simplicity and convenience!

We love our Westjet card and that will remain our #1 card. We will use this card for everyday purchases and book all our flights that we can on Westjet (free checked bags and companion flight). We do travel outside Canada fairly often but only for vacation (no business trips). We usually spend anywhere from 2 to 4 weeks outside of Canada. Next year we have 6 weeks planned out of the country which includes Europe. In the coming years we want to do Japan, Greek Isles, South Pacific....so many places! So ya, this new card is specifically for travel.

So now that we want to travel outside the US more we want to avoid those 2.5% foreign transaction fees as we use CC for most things on vacation (carry some cash but limited). We are looking at one of two Cards:
Scotia Bank Passport Visa and Rogers World Elite Mastercard. There is the homestrust as well but I've heard mixed things about it so not considering it for now.

Roger: Master card charges 2.5% foreign transaction fees but gives 4% cash back on foreign purchases so net is 1.5% CB. 0$ annual fee and some minimal insurance coverage

Scotia Bank Passport Visa has a 139$ annual fee but has no Fx fees, rewards points that can give cash back (equal to about $180 on signup and about 0.75% after.) or travel. It also includes a more comprehensive insurance package and a free yearly subscription to Priority Lounge Access and 6 free airport lounge vouchers per year. Now the Lounge Passes are very intriguing. If it were 'free' we would definitely use them every year but otherwise we would never pay to go to the lounges so its a great perk but not a 'necessity'. But those passes alone are worth more than the annual fee! A supplementary card is free so Wife has her own card. Lastly (and a minor detail) is this card is a Visa so we would have one MC and one Visa. This can come in handy for places that only accept one. Ex) Costco in Canada accepts MC but Costco in the USA accepts Visa.

So anyway...thoughts? Is it worth paying an annual fee for a secondary card? Or just go with the No annual fee and cash back card?? Anything we missed? If we get another card we plan on cancelling the US chequing account so that 'saves us about 55$/year that we would put towards another card.

Thanks!!

 

[deedubb]

I have the WJ and the Scotia card. I love the latter for the lounge passes, but it also has trip cancellation insurance which many cards do not have, so it is a keeper for me. We usually use the lounge passes as well, since the Magical Express leaves 4 hours prior to your flight, so there is often a lot of time spent at MCO.

 

[Mikamarii]

I have the WJ and the Scotia card. I love the latter for the lounge passes, but it also has trip cancellation insurance which many cards do not have, so it is a keeper for me. We usually use the lounge passes as well, since the Magical Express leaves 4 hours prior to your flight, so there is often a lot of time spent at MCO.

ohhh that is a great point. The westjet card has a pretty comprehensive package but no trip cancellation/interruption. That alone may be worth putting more of our vacation on the Scotia card. Except flights of course! need those free checked bags

 

[bankr63]

ohhh that is a great point. The westjet card has a pretty comprehensive package but no trip cancellation/interruption. That alone may be worth putting more of our vacation on the Scotia card. Except flights of course! need those free checked bags

May not be as great an idea as you think. Read and understand the conditions of coverage to be certain. I know my TD coverage requires ALL of the trip to be booked on the CC for it to be covered; so if the flights are on the WJ card they would not be covered, and they may decide to deny the entire claim if only part of the trip is charged to the card. Having worked in the CC industry for years, I can tell you that there are enough exclusions in the CC policies to often make it near impossible to collect.

But otherwise it sounds like you are on the right track, and that you are already doing the math. Really it just takes a couple of "what if" spending and usage scenarios to determine which card is the better deal. Don't be overly tricked by things like the lounge passes; these are "nice to haves" that often aren't used by most of the card holders. Really, you have to ask yourself if you would pay to use the lounge if you did not have that card. If you would, then it is a saving to you, otherwise it is just a perk and should not go into the calculation of costs/savings.

In general, cash back cards are preferable to points cards. You can use the cash for anything, whereas travel points are often restricted, and if they get used, it is usually by booking additional travel that the cardholder would not normally take. "Well, we have all these points so let's go to Disney because the flights are free" - but the other $3,000 in hotels tickets and meals is not "free". In other words, using points generally costs the cardholder more than doing nothing with them.

 

[Griffin11]

I have the Rogers Bank World Elite MasterCard. I use it as a secondary card mostly for US $ transactions for the cash back that offsets the currency conversion fees as you mentioned.

I don't think it's worth it paying an annual fee for a secondary card. The Rogers card would do everything you need it to do without an annual fee. It has pretty comprehensive insurance too.

I will caution that the reason it's not my primary card is their systems and customer service are ... quirky ... For example, I tired to subscribe to text alerts and despite responding repeatedly to confirm my phone number, the system never recognized the confirmation. Not a big deal if you're only using it occasionally, but too annoying for me to use it as a main card.

 

[StarSeven7]

We have the Rogers World Elite Mastercard and the Hometrust Visa. We first got the Hometrust Visa to use when we're out of the country but we ended up getting the Rogers card soon after because we're trying to close our out MBNA card (we've had a lot of issues with them - once they wouldn't let us use the card because they thought it was a fraudulent purchase and even after spending several hours on the phone with them to confirm it was us using it, they still wouldn't allow the purchase and it was something that was only on sale through that day so it cost us several hundred dollars! Another time they said someone else was using our cards but every purchase on the card was ours but they made us cancel and reissue new cards anyways!) Rogers has been fine so far but I will warn you that they start you off with a very low limit - MUCH lower than ours is with MBNA. We're guessing that this is because it's a no fee card but we're not sure. We've gotten them to raise the limit a bit but still not much, they seem to be pretty stingy with that compared to other credit cards who are throwing money at us!

 

[cdnSpinalTap]

For me and credit cards, it's all about how I can maximize the percentage cash back on my transactions. I am not worried about insurance as it is covered by my work plan and lounge passes are not important to me. Here is my combination of cards and how I use them:

WestJet World Elite MasterCard - Fee ($0, covered by banking plan), used only to get companion flights every year and use it to pay for WJ purchases to get the full 2% back.

Meridian Visa Infinite - Fee ($99+$30 additional card), groceries (4%), gas (4%), pharmacy (2%)

Scotiabank Momentum Visa - Fee ($120, no additional card), Reoccurring payments (4%)

Rogers World Elite Mastercard - Fee ($0), used for everything else (1.75%), foreign currency transactions (Net +1.5%)

Based on my previous and current spending habits (tracked in financial software for many years), this is the combination that works best for me to maximize my cash back. I considered cancelling the Scotiabank Visa but using it for 4% on reoccurring transactions still nets me $50 more per year, even after the additional fee amount.

I also got my 15 yr old daughter a supplementary WJ Mastercard that she uses so we can at least get 1.5% back on her purchases, as opposed to using her debit card where we would get nothing.

I talk to a lot of people that love Avion points or other point programs, but at the end of the day the percentage pay back return is no where near what you would get with the above combination, at least based on my research.

The caveat to all of this is that you have to do what works best for you. So this is not a recommendation as to what you should do - just what works for me.

 

[Mikamarii]

May not be as great an idea as you think. Read and understand the conditions of coverage to be certain. I know my TD coverage requires ALL of the trip to be booked on the CC for it to be covered; so if the flights are on the WJ card they would not be covered, and they may decide to deny the entire claim if only part of the trip is charged to the card. Having worked in the CC industry for years, I can tell you that there are enough exclusions in the CC policies to often make it near impossible to collect.

for us insurance is always a tough one. I’ve never purchased any type of insurance for travel (we have great travel medical through work). Insurance is always trying to get out of a claim. There’s a reason they are for profit! We bought the warranty package on both our vehicles and the last two times we needed a repair they came up with some reason it was in the exclusion. I read all insurance packages pretty thoroughly and was sure those repairs would be covered!

insurance packages on CC are intriguing to us because we wouldn’t buy It otherwise. So if something happens and the package covers only a small portion it’s still better than what we would have had otherwise. I would never get a cc for insurance but the coverage adds a level of interest to it. I’m sure the collection rate is low but there are success stories with CC insurance so even a 1% is better than the 0 we would have had Otherwise.

i read through all the scotia bank terms and looks like what ever travel is put on the card only 75% has to be paid with that card. I know WestJet is 100% so we couldn’t pay 25 with WJ and 75 with scotia and get the free checked bags AND insurance coverage. But if we just put a hotel on the visa or cruise that would be covered. I’ll add that a lot of coverages I’ve read actually don’t include cruises as a common carrier. However this visa does.

If you would, then it is a saving to you, otherwise it is just a perk and should not go into the calculation of costs/savings.

its not so much that we calculate for savings but something that we would use. For example when we fly if WestJet we would never pay for 4 checked bags. We’d cram everything in to 2 or 3. But since we get it for free we will use the 4 free bags. So with lounge passes we would never pay for it. But if we had them we would definitely use them and it adds a level of comfort to the trip that we would otherwise not get.

I will caution that the reason it's not my primary card is their systems and customer service are

we've had a lot of issues with them

this is One reason we are leaning towards cards from a major bank. There’s a little more feeling of security that want plague us if we are abroad.

In general, cash back cards are preferable to points cards

one nice thing about the scotia bank card is that the points can be converted to cash back. The 25k welcome bonus equals 250$ travel but the scotia rewards site shows it can be used for cash back of 180$. That works out to less than 1% cash back so not quite as good as the Rogers but comes with other stuff. But...then the annual fee offsets some of that......

thanks all for the input.

 

[von Monster]

one nice thing about the scotia bank card is that the points can be converted to cash back. The 25k welcome bonus equals 250$ travel but the scotia rewards site shows it can be used for cash back of 180$. That works out to less than 1% cash back so not quite as good as the Rogers but comes with other stuff. But...then the annual fee offsets some of that......

Not entirely true - if you claim it as a statement credit it's worth $180, however you do have the option to apply it to travel booked with the card for the full $250.

Much easier than booking through the Scotia Rewards website - we use this card for all our USD and travel expenses and it works quite well, but as DVC members paying dues and APs as well flying almost exclusively from BUF for our trips our usage is likely higher than most.

We dropped the WetJet card as no matter how I try to arrange things even if we fly from YYZ Air Canada always winds up less even after the voucher. YYMV of course.

 

[Sue M]

Just wanted to chime in, the Costco in the US does accept our Costco MC.

I have a US checking and Visa with CIBC, so although I don’t pay exchange on purchase with US Visa, I do with buying USD to deposit to my US checking acct.

I have a Alaska Airline World Elite MC I use. Gives me 1 companion fare a year, free luggage, etc.

 

[CdnKayDee]

Also, you do not need to book your flights on the WestJet card to get free bags you just need to have the card. It is all linked to your WestJet ID.

 

[Mikamarii]

Not entirely true - if you claim it as a statement credit it's worth $180, however you do have the option to apply it to travel booked with the card for the full $250.

thats good to know especially since this will primarily be a travel card. Thank you.

We dropped the WetJet card as no matter how I try to arrange things even if we fly from YYZ Air Canada always winds up less even after the voucher. YYMV of course.

we exclusively fly west jet. I have always had bad experiences with AC haha. The nice thing is our WJ card annual fees are covered otherwise I wouldnt pay the high fees for two cards. If I was diligent enough I’d take the cash back and put it aside for travel...but we aren’t haha. The one thing I like about travel points cards is that when it comes time to book its “free” so to speak. we will have enough points next year to cover all four of flights to Europe. Plus we have points for about half our hotels so far and have some Expedia points to save us money on others. So the bulk of our 4 week trip will be just be taxes (And a lot of spending money)

when DVC owners we’d get annual passes so with all our saved points the years second trip we didn’t have to pay for hotel, flights, or park passes. Basically just spending money. Always felt like a “free trip”.

I have a US checking and Visa with CIBC, so although I don’t pay exchange on purchase with US Visa, I do with buying USD to deposit to my US checking acct.

I’m not quite sure I understand what you are saying. We are trying to avoid the 2.5% transaction fee on the CC for foreign exchange since that’s how we pay for majority of expenses outside of Canada. . Right now we also have a US chequing account and visa. When we transfer our money to the US account we have to pay foreign exchange but we save on the extra 2.5% tacked on to the CC When we use that. Last trip alone that saved us about 150$

Also, you do not need to book your flights on the WestJet card to get free bags you just need to have the card

i was about to argue this but I went back and checked the terms and conditions and you are right it says nothing about actually having to charge the flights To the card. Have you done this before? when you do online check in does it show 0$ for bags even though it was purchased with another card?

†Valid for primary cardholders of the WestJet RBC World Elite Mastercard and up to eight (8) additional guests travelling on the same reservation; not valid for companions when travelling on a group booking (10+ guests on the same reservation). Eligible member's 9-digit WestJet Rewards ID must be on the reservation at the time of check-in. Valid on itineraries marketed and wholly operated by WestJet; not valid when travelling with WestJet's code-share or interline partners

It’s actually quite intriguing and reason for us to keep WJ card and use the another card as a primary card.

 

[Sue M]

thats good to know especially since this will primarily be a travel card. Thank you.



we exclusively fly west jet. I have always had bad experiences with AC haha. The nice thing is our WJ card annual fees are covered otherwise I wouldnt pay the high fees for two cards. If I was diligent enough I’d take the cash back and put it aside for travel...but we aren’t haha. The one thing I like about travel points cards is that when it comes time to book its “free” so to speak. we will have enough points next year to cover all four of flights to Europe. Plus we have points for about half our hotels so far and have some Expedia points to save us money on others. So the bulk of our 4 week trip will be just be taxes (And a lot of spending money)

when DVC owners we’d get annual passes so with all our saved points the years second trip we didn’t have to pay for hotel, flights, or park passes. Basically just spending money. Always felt like a “free trip”.



I’m not quite sure I understand what you are saying. We are trying to avoid the 2.5% transaction fee on the CC for foreign exchange since that’s how we pay for majority of expenses outside of Canada. . Right now we also have a US chequing account and visa. When we transfer our money to the US account we have to pay foreign exchange but we save on the extra 2.5% tacked on to the CC When we use that. Last trip alone that saved us about 150$

What I was trying to say is I can’t seem to get away from paying Forex, I either pay it when buying USD to put in my USD checking, or I’m paying it if I use my Canadian credit or debit card. Either way I’m paying.
I don’t pay Forex using my USD Visa, but I have already paid with buying USD to put in my USD checking.

 

[MyPrince&Princess]

I may be wrong but I think there is some confusion about the actual FX (difference in the inherent value of the Canadian vs US dollar), and an FX fee, which is on top of the usually unfavourable foreign exchange rate.
We have an FX hit whether we use US cash or a US CC.
We know that CC have an additional fee on top of paying FX, of around 2.5%. Is there a similar fee tacked on by banks when purchasing US cash? I think there is. If that's the case, then as a Canadian, we have to pay that fee either way.

 

[CdnKayDee]

Yes, I have done the bags without using the credit card. Shows nothing owing when you go to do your bags. Its all linked to your WestJet ID so as long as you have added that to your reservation you are golden!

 

[Mikamarii]

I may be wrong but I think there is some confusion about the actual FX (difference in the inherent value of the Canadian vs US dollar), and an FX fee, which is on top of the usually unfavourable foreign exchange rate.
We have an FX hit whether we use US cash or a US CC.
We know that CC have an additional fee on top of paying FX, of around 2.5%. Is there a similar fee tacked on by banks when purchasing US cash? I think there is. If that's the case, then as a Canadian, we have to pay that fee either way.

my belief of the way it works is the Bank of Canada has the posted rate of the value of our dollar

banks then give a rate for us to convert cash. The bank rate is less favourable than the BOC. If you purchase cash directly from the bank then the rate is even less favourable than an online transfer from say a Cdn to US account.

visa/mc etc also have a rate less favourable to the BoC. I’m sure all banks/cards are different but the rates are fairly close.

if using a cdn card outside Canada you pay whatever the cards posted rate + 2.5% conversion fee. So the best way to use money outside the country (US for example) is to Have a US chequing account and US credit card. Using the us card there is no conversion fee and by transferring money to a us chequing account you get the banks better rate.

for us, because we want to travel outside NA we want a card to eliminate that extra 2.5% because we use our cards heavily. We will still have to pay the cards posted rate which is less favourable than BoC but we avoid paying the additional 2.5% charged by the credit card company for converting the funds. By not paying that additional fee The cards posted rate would be less than converting to cash in the various currencies.

 

[Mikamarii]

Yes, I have done the bags without using the credit card. Shows nothing owing when you go to do your bags. Its all linked to your WestJet ID so as long as you have added that to your reservation you are golden!

that’s awesome! I was looking in to it more and the same goes for the companion fee. I never really thought about it since we’ve only ever had the one card.

 

[CdnKayDee]

Also, its not a huge savings but a bit of savings on foreign exchange. We try to buy our US money from Knight Bridge to put our US account. The first time is a bit more work but after that I find it quite easy.

 

[Griffin11]

Rogers is devaluing the Rogers World Elite MasterCard as of June 2nd (details here: https://www.rogersbank.com/legaldocs/en/change_in_terms_world_elite.pdf). Overall cash back is decreasing from 1.75% to 1.5%, and cash back on USD transactions is decreasing from 4% to 3%. Perhaps more significant for those of us using it as a secondary card, you will need to spend $15,000 on it annually to keep the card.

Westjet is also devaluing their card (with increased fees for companion fares), so I think this is an overall trend in response to the credit card companies decreasing their merchant fees in April 2020.

For those in the market for a new card, if you're not in a rush it's probably best to wait a few months to see how things shake up, I wouldn't be surprised to see other similar cards changed as well.

 

[MyPrince&Princess]

that’s awesome! I was looking in to it more and the same goes for the companion fee. I never really thought about it since we’ve only ever had the one card.

Is the companion fee 99$ for North America and does it include taxes and fees? If not, what are we looking at for taxes and fees, on average, to the US? I suspect it's high.