#RSMMoneyWoes with Will Tang

Will Tang

There’s nothing that frustrates me more than paying more for something than I need to. It’s not that I’m a frugal person (okay, maybe I am), but something about being cheated, or better yet, preyed on by the financial system, feels like flushing money down the toilet.

When I think about my money woes, there are a lot of things that I wish I could’ve done better. But as a travel blogger, the ones that come more vividly to mind are the ones that occurred while travelling. As someone who spends more time out of the country than at home, getting ripped off happens more times than not.

For instance, there’s that time I paid way too much for a panini at a street vendor in Europe when it was half the price at a café around the corner.

If you’ve ever been to Europe, you’re probably nodding your head in empathy. And don’t you just hate it when you’re at a restaurant and a plate of bread is put on your table without your consent? If you dare put your hands on a slice, you’ll likely be charged that bogus “bread” charge, even if it was the nastiest, most stale piece of bread you’ve ever set your lips upon.

Then there was that time when a cab driver tried to pull a fast one on me by swapping out a bill and telling me that I underpaid. After a bit of back-and-forth, I luckily got away with only paying the already over-priced fare.

Yes, travel is filled with a ton of financial pot holes that you have to navigate, but I’d categorize these as simply a lack of travel smarts, rather than true money woes.

That being said, you may be wondering what is my actual money woe.

You mean all those years of travel and swiping away and I’ve been throwing away 2.5% of my spend to the bank?

I caught the travel bug back when I was a student on exchange in Sweden. Back then, I only had a basic cashback Mastercard from BMO. So there I was swiping away as I backpacked through Europe. It was super convenient because I didn’t have to worry about exchanging my Canadian cash for various foreign currencies whenever I arrived in a new country.

A swipe of the card at the restaurant. A swipe at the train station. A swipe for another plane ticket. Swipe.  Swipe. Swipe. 

This went on for years. Sounds pretty normal right? And without digging too deep into it, I would just pay the monthly bill, no questions asked. But when I learned from friends that Canada introduced a few foreign exchange fee-less travel credit cards, I realized something was very VERY wrong.

“You mean all those years of travel and swiping away and I’ve been throwing away 2.5 per cent of my spend to the bank?” I asked myself.  I wanted to kick myself in the head. All that time I was too afraid to do the math and realize the extra 2.5 per cent fee added to my every purchase.

For those who are not familiar with foreign exchange or “forex” fees, it’s worth educating yourself on the matter, especially if you travel frequently. Even if you travel once a year and plan on using your credit card, here’s how it works.

Let’s say the exchange rate for USD to CAD is 1.03 according to the market. So if you’re buying something for $100 USD, it converts to $103 CAD. But when a 2.5 per cent forex fee is added to this rate, the effective rate is now 1.55. So that $103 turns into $105.50.

The extra $2.50 doesn’t seem like much, but think about how much money you spend when travelling.  Weekly trips can easily cost you upwards of $1,000. And if that’s the case, you’re dripping away $25 needlessly.

Once again, that may not seem like much to some, but would you just throw away $25 on the street? I wouldn’t.

From right under my nose, the credit card companies were slowly swiping cents away from my bank account.  I was hacked and I was furious!

I eventually signed up for the now defunct Chase Marriott Visa, which had zero foreign exchange fees on all foreign transactions.  Getting this card was quite liberating as I could use my credit card around the world and rest assured I wasn’t being charged that dubious 2.5 per cent on every purchase.

Now, of course, this didn’t mean I could get away from the natural fluctuation of exchange rates, but at least I knew I was paying much closer to market value than before. It was life changing.

Nowadays, it’s still hard to find a Canadian credit card with no foreign exchange fees. However, Scotiabank does offer a new Visa with this feature.

In terms of perks, the Scotiabank Passport™ Visa Infinite* comes with a lot of competitive travel benefits and rewards on everyday purchases. But more importantly, you can enjoy no foreign exchange fees on your international purchases, which is a rarity for credit cards in the Canadian market as of late.

In addition, the Scotiabank Passport™ Visa Infinite* comes with a complimentary airport lounge access (Priority Pass™ membership), with six passes per year from the date of enrollment. This is impressive since not many Canadian credit cards offer more than four lounge visits per year.

So there you have it.  That’s my #RSMMoneyWoe.  I wish I had learned my lesson much earlier, because who knows how much money I could have saved over the years. My advice to readers – beware of all credit cards with additional fees. Always read the fine print and understand how those fees may affect your purchases. And find the best credit card that suits your lifestyle and needs.

The banks may want you to think 2.5 per cent is not much, but it’s a price that is entirely avoidable and unnecessary – just like that plate of bread that they put on the table in Europe.

Related Topics

#RSMMoneyWoes / Credit Card News / Credit Cards / Credit Cards 101 / Lifestyle / Lifestyle News / Personal Finance / Personal Finance News / RSM News / Using Your Credit Card / Your Budget

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