Between crowded airports and rising prices, travellers have plenty of aggravation to contend with this summer.
Here’s a way to lighten the load if your travel takes you outside Canada: Get a travel reward credit that that does not charge the usual 2.5 per cent fee on purchases in foreign currency.
With inflation running at 7.7 per cent, saving 2.5 per cent on travel costs sounds almost inconsequential. But that forex markup really adds up on substantial trips where you’ll pay for hotels, restaurants, attractions and shopping with your credit card. Is that the kind of trip you’re planning in the second half of 2022 and beyond?
Credit cards without forex markups used to be a fringey niche in the travel reward category. But in the past few years, quite a few new competitors have come into the market from both banks and smaller competitors. To help you sort through the options, I found some online reviews and resources:
- A travel blogger picks the six best cards with no foreign transaction fees
- The Savvy New Canadians blog’s list of best cards includes a prepaid Mastercard with no forex fees
- CreditCardGenius does its usual thorough job of highlighting the features of the various options available – plus, there are user reviews
- Budget travel expert Barry Choi’s survey of the best cards in this category
- The Rates.ca list includes full details on the other features of cards with no forex fees
- GreedyRates offers a handy comparative chart
There are a few no-fee options for cards without forex fees, which means they’re ideal for people who already have a primary reward card and are looking for a backup. If you have any thoughts or tips on cards without forex fees, I’d love to hear from you. As ever, I can be reached at rcarrick@globeandmail.com or on Twitter at @rcarrick.
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Rob’s personal finance reading list
‘Are you latte-ing away your future?”
A look at the origins of the advice to stop wasting money on lattes so you can afford a house. It all began with a popular U.S. personal finance guru named David Bach. On lattes, listen to Ramit Sethi’s advice.
A rental affordability debate
A question asked on Reddit: Am I being financially irresponsible to pay $1300/month rent on a $65,000 gross salary? An old rule is that rent should max out at 30 per cent of gross income, so this particular rent seems doable.
How to buy a mattress
A New Yorker writer takes you through the latest in mattress technology, including the kind you order online. I have heard it argued that splurging on a mattress is justifiable because you spend so much of your life sleeping. Also in this article is a discussion of online reviews and how reliable they are.
Inflation in the grocery store
CBC reports on how much prices have risen for specific grocery items, from bread to protein. Now for a look at how a dozen women across the country have banded together to create online and social media resources that help people fight inflation with coupons, daily deals and shopping tips.
Ask Rob
Q: I have come across the TD Canadian Banking & Utilities GIC. I am sure other banks have a similar product. My understanding is that the principal is guaranteed and the GIC value is determined by the banking and utilities index. What are the advantages and disadvantages of this product?
A: Advantages of index-linked GICs: None worth noting. Disadvantages: Covered thoroughly here. Conventional GIC rates are up a lot this year. I suggest them.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
A debt consolidation calculator: How it can make sense to pay off multiple high-rate debts like a credit card balance with a loan at a lower rate.
The Money-Free Zone
I’ve been meaning to mention this 2021 album for a while – Black Acid Soul, by Lady Blackbird. More mellow than acid. I really like the song It’ll Never Happen Again, but this is an album to listen to from start to finish.
Watch this
Repeating this one from last week because the link got left out: Salman Ahmed, chief investment officer at Steadyhand Investment Funds, explains why Elon Musk is wrong in calling socially responsible investing – known as ESG, for environmental, social and governance factors – a scam.
What I’ve been writing about
- The next round of parental finance support to adult kids: Help paying the mortgage
- Rising interest rates have brought back the 5 per cent GIC
- Is life getting too expensive for retirement saving?
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Is the middle class dead for millennials and Gen Z? • Gas prices are soaring. Are electric vehicles an affordable solution? • Crypto is booming, but should you invest? • How are young Canadians dealing with soaring rents? • Inflation is squeezing our finances. What can we do about it? • Is a hot housing market squeezing Canadians out of their small towns?
- ✔️ The housing file: How bad is housing affordability? Even a crash won't help • Sell the family home to lock in profit and then rent? Better not • Why young adults can't afford houses: Hard work got you more in the past than it does now • Five reasons you should not buy a house till you're at least 30 • Now more than ever, owning a house is not a retirement plan
- 📈 Investing: The 2022 ETF buyer's guide: Best Canadian equity funds • The 2022 Globe and Mail digital broker ranking: Does the zero-commission revolution flip the script on who's best? • With bonds sinking, conservative investors are waking up to risks they never saw coming • A five-step plan for dealing with the sad fact that almost every investment is falling lately • The best financial advice in advance of retirement? Work on your marriage • One-year GICs are the best deal in town for safety seekers • What to do if the financial plan you paid thousands for disappoints
- 💰 Your money: Are you prepared for the pandemic wealth boom to blow up in our faces? • This hard-working 24-year-old is nailing it financially. But where's the happiness? • Who should and shouldn't worry about the wave of rate increases this year, and what every stressed-out borrower should do right now • Don't make this potentially costly assumption about the CPP Survivor's pension
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob Carrick