The Scotiabank Passport Visa Infinite is the only credit card without foreign transaction fees issued by a Big 5 bank. This product launched early last year, and is a good step towards eliminating foreign transaction fees on Canadian credit cards.

Scotiabank Passport Visa Infinite – Increased Offer

The Scotiabank Passport Visa Infinite now has a signup bonus of up to 40,000 Scotia Rewards points. You earn 30,000 Scotia Rewards points after spending $1,000 in the first three months of card membership. As well, the card offers a 10,000 points bonus if you spend $40,000 in a cardmember year and 2,000 points each additional $10,000. This offer ends June 30, 2019.

Of the different bank point programs, Scotia Rewards is the most flexible, because you can use points to credit travel purchases put onto the card. By redeeming your points this way, each Scotia Rewards point is worth one cent. Generally, the credit takes 2-3 weeks to post. The Scotiabank Passport Visa Infinite earns one point per dollar on all eligible purchases.

Using points for travel purchases comes in handy with award redemptions. Recently, I used my Scotia Rewards to offset the taxes on an Aeroplan ticket. My Scotia Rewards balance was 7,025 points at that time, which translated into a $70.25 credit. I used this towards the $76.61 in taxes for my business class flight from Vancouver to Osaka. My out of pocket cost ended up only being $6.

The card also earns 2 Scotia Rewards points per dollar on purchases on Grocery Stores, Dining, Entertainment, and Transit. This applies worldwide to all merchants, so you can earn bonus points and save on foreign transaction fees. Stacking this with the spend bonus, you earn up to a 2.25% return if you hit the $40,000 threshold.

Scotiabank Passport Visa Infinite – Worth It?

I don’t use Canadian credit cards for foreign transactions because I have access to US credit cards. Most American credit cards don’t have foreign transaction fees. Eligible individuals may be able to use American Express Global Transfer, which offers a simplified (and now online) process to transfer your AMEX history to the United States.

This gives you access to cards such as the Hilton Aspire American Express, which offers unique benefits that are far stronger than any credit card in Canada. My foreign purchases are mostly in travel and dining, so I use the Chase Sapphire Preferred and Chase Ink Preferred to earn 2x/3x on these categories.

On everyday spend, the strongest card is the American Express Business Platinum, which also has an increased signup bonus. It earns 1.25 Membership Rewards per dollar, convertible to Aeroplan and Avios. I value Aeroplan at a minimum of 1.55 cents (USD), which means you can get well over 2% in value per dollar spent. I use the Cobalt Card to earn 5x points on Dining and Groceries.

However, the Scotiabank Passport Visa Infinite is a balanced card. It has decent category bonuses, lounge access, and comprehensive insurance benefits. It is also one of the few cards with price protection. As I have said, this is the optimal solution for those who only want one card. The other card I recommend is the Home Trust Preferred Visa, which is the only credit card with no foreign transaction fees and no annual fees.

Foreign transaction fees can add up if you are currently incurring them. The fee on most cards is 2.5%. If you spend $10,000, that is $250 in fees. For advanced rewards users, this card may also be appealing as issuers crack down on repeat card bonuses. Overall, it may be useful for you – but only if you fit the target demographic.

The HSBC World Elite Mastercard also has no foreign transaction fees, but the application process is a pain. I have heard many reports of readers that are declined for this product (where they have opened my accounts else with no problem). Overall, I find the customer service to be very poor, especially for non-Premier clients.

The Rogers World Elite Mastercard also offers a de facto 1.5% rebate on foreign purchases, but I dislike their earning structure because any refunds you make still incur the fee. As the vast majority of my foreign purchases are for flights, hotels, and car rentals, refunds and credits for deposits and changes are significant for me.

The Basis for Foreign Transaction Fees

There are two reasons card issuers tack on these bogus fees. First, the transaction on your statement adds the forex fee, rather than having it broken out separately. Thus, many people don’t realize the marginal difference on their transactions. Further, a major component of credit card revenues are from interchange – the fee a bank takes every time a card is swiped.

Interchange Fees Diagram

As card issuers in Canada have voluntarily agreed to lower their interchange rates, they have to make up the difference with fees. Foreign exchange fees are large moneymakers, directly charged from by the bank to the cardholder, which is why financial institutions are loath to given up this monetary stream.

Additional Reading: The Economics of Credit Cards

That being said, we have come a long way in the past few years where only Chase Canada offered products without foreign transaction fees. Since they closed their entire portfolio in March 2018, the populace could have been really screwed. Thankfully, we now have cards like the Scotiabank Passport Visa Infinite and the Home Trust Preferred Visa instead. We even have a debit product, the Stack Mastercard, that has no foreign transaction fees and no ATM withdrawal fees.

Application Link: Scotiabank Passport Visa Infinite – Increased Offer: Earn up to 40,000 Scotia Rewards