Choosing a secondary Travel Credit Card

[Griffin11]

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.

It does not include taxes and fees. For Toronto to Orlando for example, taxes and fees would be about $150 round trip (but would vary depending on the exact flight), plus any additional fees for things like baggage and optional seat selection. It's pretty easy to get an estimate of taxes and fees on the West Jet website - when you click through a pretend booking you will eventually get to the point where they split out the base fare from the taxes and fees.

Also, the companion fare will be increasing to $119 effective April 1st. I believe vouchers issued before April 1st can still be used at the $99 rate.

Edit: typo

 

[bankr63]

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.

This is close, but not entirely accurate. Visa and MC use the spot rate (generally the BoC rate) when processing the transaction. I have been tracking mine for years, and the exchange is generally within 0.01% of the posted noon rate (in other words, within rounding error - not a fee). The CC companies then tack on a 2.5% fee (fairly universal percentage. only a couple of lenders do not charge this fee as already noted).

Banks publish exchange rates that are generally 2.5% OR MORE unfavorable than the BOC rate for regular transactions. Some offer discount rates on larger transactions or with special accounts (but the account fees generally offset the advantage). I have actually noticed that more and more of Canada's major banks are creeping up to and above 3% on forex now, making credit cards a better deal. It is very easy to figure out the spread on the US dollar. Go to your bank's website and look at buy and sell rates. Buy C$100 of US$ and see what you get. Then buy back C$ with the resulting US$ number and you find you are probably at C$94-95. This represents approximately a 2.5-3% rate in each direction (5-6% overall loss).

ETA: Current Bank Counter Forex Rates (online check)...
RBC - 2.62% (presumably cash)
TD - 2.6% non-cash
- 3.05% cash
SB - 2.43%
BMO - 2.6%

So I perhaps my comment about rates creeping up are unfounded, however these may be the banks' best rates as I was using their published calculator tools. Only TD made it obvious that they charge different rates for counter cash vs non-cash instruments, although I believe most banks do this.

Having worked in banking for many years, what I will say is the bank will ALWAYS get their money somehow...

 

[Mikamarii]

Also, the companion fare will be increasing to $199 effective April 1st. I believe vouchers issued before April 1st can still be used at the $99 rate.

Not sure if it was a typo but the new companion rate will be 119$ for Canada and Continental US and 399$ for the rest of the west jet network.

Other than that MyPrinceandprincess, what Griffin said was right. Taxes and fees don't amount to too much depending on the flight. We are planning a Europe trip next summer and a roundtrip flight is about 1150 right now with taxes making up 224.08$. So for us the round trip companion flight would cost around $624 (399+225) vs the 1150 regular price.

For fun I looked at flights on a different date with the cheapest flights and for a RT to London it cost 654.08 with taxes staying the exact same. So the tax seems consistent and not depending on a seat sale as GST only amounts to $1.50 with the remaining being made up of airport/security fees.

The best use of the companion flight will be in the continental US and especially in the premium seating.

 

[Mikamarii]

This is close, but not entirely accurate. Visa and MC use the spot rate (generally the BoC rate) when processing the transaction. I have been tracking mine for years, and the exchange is generally within 0.01% of the posted noon rate (in other words, within rounding error - not a fee). The CC companies then tack on a 2.5% fee (fairly universal percentage. only a couple of lenders do not charge this fee as already noted).

Banks publish exchange rates that are generally 2.5% OR MORE unfavorable than the BOC rate for regular transactions. Some offer discount rates on larger transactions or with special accounts (but the account fees generally offset the advantage). I have actually noticed that more and more of Canada's major banks are creeping up to and above 3% on forex now, making credit cards a better deal. It is very easy to figure out the spread on the US dollar. Go to your bank's website and look at buy and sell rates. Buy C$100 of US$ and see what you get. Then buy back C$ with the resulting US$ number and you find you are probably at C$94-95. This represents approximately a 2.5-3% rate in each direction (5-6% overall loss).

ETA: Current Bank Counter Forex Rates (online check)...
RBC - 2.62% (presumably cash)
TD - 2.6% non-cash
- 3.05% cash
SB - 2.43%
BMO - 2.6%

So I perhaps my comment about rates creeping up are unfounded, however these may be the banks' best rates as I was using their published calculator tools. Only TD made it obvious that they charge different rates for counter cash vs non-cash instruments, although I believe most banks do this.

Having worked in banking for many years, what I will say is the bank will ALWAYS get their money somehow...

Thanks very much for posting this analysis.

 

[Mikamarii]

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.

That's interesting. Thank you. We aren't planning on getting a new card for a few months anyway. Based on the way it is now we think the Scotia bank Infinite Visa is the best for us in conjunction with our WJ mastercard. Especially if there will be a minimum spend on the Rogers card as we won't reach that. But if they change the Scotia Card we will have to reevaluate our thinking on that too!

 

[Griffin11]

Not sure if it was a typo but the new companion rate will be 119$ for Canada and Continental US and 399$ for the rest of the west jet network.

Other than that MyPrinceandprincess, what Griffin said was right. Taxes and fees don't amount to too much depending on the flight. We are planning a Europe trip next summer and a roundtrip flight is about 1150 right now with taxes making up 224.08$. So for us the round trip companion flight would cost around $624 (399+225) vs the 1150 regular price.

For fun I looked at flights on a different date with the cheapest flights and for a RT to London it cost 654.08 with taxes staying the exact same. So the tax seems consistent and not depending on a seat sale as GST only amounts to $1.50 with the remaining being made up of airport/security fees.

The best use of the companion flight will be in the continental US and especially in the premium seating.

Sorry, yes, typo, I will edit!

 

[Rinstah]

When I was paying for our most recent trip I wanted a way to avoid the foreign exchange %. I asked my advisor at Scotiabank and she recommended the Infinite Passport visa. With the type of bank account we have through Scotia we got the first year free. We will decide next January if it’s worth keeping or not as the annual fee is much higher then our current Momentum visa.
So far we like it although I tried to register it for the free lounge access and the website told me we don’t qualify and to call the 1 800 number. We looked at different locations to cash our points in and a trip to Vegas for one would cost roughly 90,000 points. I also like that we are covered for trip cancellation. I wish we had of known about this card before we paid for our fights, if you use it to pay for flights you get free baggage coverage too.

 

[efrant]

I've posted something similar in another thread. There are only a handful of credit cards that don't charge the 2.5% foreign transaction fee and provide rewards:

Scotia Passport Visa Infinite
Scotia Amex Gold
HSBC World Elite MasterCard
Brim MasterCard
Brim World MasterCard
Brim World Elite MasterCard

Using one of the above cards is the most cost effective way to pay for USD expenses (unless you are paying Disney expenses using Disney gift cards purchased in Canada).

If you spend a lot in non-CAD, the two best cards in my opinion are the Scotia Passport Visa Infinite and the HSBC World Elite MasterCard. Both have very comprehensive travel insurance packages, and a number of perks (which very between the two cards).

For those that have a U.S. residential address, are able to purchase USD cheaply (or have USD income) and are willing to enter the U.S. credit card scene, there are much better options, but as far as Canadian cards, the ones listed above are the best options.

The USD credit cards issued by Canadian banks are probably the worst option one can use, as they don't give rewards, and unless you are able to purchase USD cheaply (or have USD income), you still end up paying the 2.5% fee when you buy USD to pay off the card.

 

[Mikamarii]

I've posted something similar in another thread. There are only a handful of credit cards that don't charge the 2.5% foreign transaction fee and provide rewards:

Scotia Passport Visa Infinite
Scotia Amex Gold
HSBC World Elite MasterCard
Brim MasterCard
Brim World MasterCard
Brim World Elite MasterCard

thanks for the info. I think we’ve settled on the scotia passport visa. We will use all the features on it so seems to fit our needs the most!