Goodbye BMO US Dollar MasterCard, You’re No Longer a Good Buy for Us

A couple of years ago we took our first family trip to the US. We saved the money we’d need for hotels, shopping and activities for a few years ahead of departure day. When the Canadian dollar was above parity, we bought US dollars and stored them in an ING Direct US dollar savings account. Before the trip, I applied for a BMO US Dollar MasterCard. Now, though, it’s time to say goodbye to it.

Why a US Dollar Credit Card May be Beneficial


We could have used our regular Canadian dollar credit card for our US expenses. We didn’t because it would charge us a hidden fee on every dollar we spent.

Like many other credit cards, our Canadian dollar card charges a fee on top of the actual Canadian/US Dollar exchange rate. At the time we travelled, this fee was 2.5% of the cost of the transaction. For example, if we paid $100 USD for lunch, we would have to pay a fee of $2.50 in addition to the actual amount it would cost to buy $100 US dollars with Canadian dollars.

There are some Canadian credit cards, like the No Fee Sears Financial MasterCard that do not charge a foreign exchange transaction fee. Instead of one of those, though, we got a USD card.

Why We Preferred a US Dollar Credit Card

The second reason we got the USD card was to control what we paid as our foreign exchange rate. As I mentioned, we actually bought US dollars ahead of time when the Canadian dollar was stronger than the American. That meant we wanted a card where we could make our purchases in US dollars, then pay the credit card bill directly in US dollars.
For us, the BMO USD MasterCard worked perfectly. We paid no hidden fee and we knew what our exchange rate was because we pre-bought our US dollars.

So Why Cancel the BMO US Dollar Card?

Why, then, did I cancel the card today?
Because the card has an annual fee.

When we signed up for the card, the fee was $25 per year. If you spent $1000 in US funds during the year, they reimbursed the fee. For the first two years we had the card, we did have spending of over $1000 a year. This year, though, we won’t. We don’t plan any travel to the US for several years at least. And the fee is now $35 a year.

I did phone and make a half-hearted effort to have the fee waived. I received at least 6 apologies but no price reduction. So I terminated the card.

Be Careful Cancelling Credit Cards

In our case, our credit rating is fairly good. We also haven’t borrowed any money in many years. Cancelling a credit card can have a negative impact on your credit score. In our case, we didn’t care. If your credit rating is weak, however, be careful. Try to find out what impact, if any, the cancellation will have on your rating before deciding whether to cut up the card.

Related Reading

Join In
Do you use a US dollar credit card? Do you travel or just shop online? Please share your experiences with a comment.

15 thoughts on “Goodbye BMO US Dollar MasterCard, You’re No Longer a Good Buy for Us

  1. Also the BMO US Dollar MasterCard statements indicate “You have many convenient ways to pay: Preauthorized Debit, telephone, internet.” But when tried setting this up, have been told that there is no way to pay a BMO US Dollar MasterCard from any other financial institution in Canada, other than old fashion cheques.

    • That sounds like BMO! Sorry to hear they still are making it difficult to pay. (When I cancelled, I lost a few cents, too, because I had to pay the bill to the next highest dollar since they wouldn’t accept US or Cdn coins in payment!)

  2. I recently got a USD BMO MasterCard for a trip to the US. The teller sold me the card by telling me that I would get a better exchange rate because I could buy US dollars when the rate was good and pay the card directly with US dollars in order to avoid the additional service fee of 2.5%. I bought into what she was selling, got the card and happily shopped in the US.
    However when I got home, I prepared to start watching the exchange rate to see how I could get the best rate to purchase the US dollars I needed to pay down my card. I did not have any US dollars prior to getting the card. When I began shopping around to see who could give me the best rate for exchange, I found that credit card companies offer lower exchange rates than banks. I also then learned that the 2.5% service fee is not 2.5% of the purchase, but an additional 2.5% on the exchange rate. It works out to be only a nominal amount when talking about a couple thousand dollars. I was on the phone with BMO and MasterCard confirming my calculations.
    In the end, I argued with BMO that unless I had prepurchased enough US funds to cover my purchases, it would never be to my benefit to buy US dollars from the bank to pay my US MasterCard, because even with the additional 2.5% added to the exchange, it is still be a better rate to let MasterCard deal with the exchange.
    The last detail to consider as well is that the BMO USD MasterCard has no rewards program. If you use your Canadian MasterCard you can apply for any kind of rewards program youd like. It is always to your benefit to do so, because retailers have a markup on their prices to cover the cost of these programs, so your paying for the points whether you collect them or not. If you calculate the return value on points and consider the better exchange rate offered by canadian credit cards, having a USD MasterCard doesn’t have as much benefit as BMO would like you to believe.

    • Thank you for your detailed comments!

      Yes, a USD credit card is usually most useful for those who are spending money regularly over the years in the USA. There is a fee, for instance, for most USD cards unless you spend several thousand dollars per year.

      I’m not sure that the credit card exchange rate is better than the bank exchange rate. Usually the two rates are very similar but then the credit card adds 2.5% on top of the exchange rate as a fee, making it the worse deal.

      Usually, though, to get USD to pay the card, people are
      a) pre-buying USD when rates are good and keeping them in a bank account like the one at Tangerine.ca/ING Direct that pays interest
      b) using “Norbert’s gambit” or trading inter-listed stocks to get USD at cost in their brokerage accounts then transferring the money out in USD to pay for their credit card bill
      c) getting paid in USD for work sold in the US and using that money to pay their credit card bill
      d) keeping USD from previous trips to the US and using that to pay the credit card bill

      If a person is not planning to get and use USD these ways, you’re right it may not be worth getting a USD card.

      Thank you for sharing your experiences and why it’s not a good deal for you (and many others)!

  3. The comment above stating the 2.5% exchange fee is not on the full purchase price but on the exchange rate is the exact same thing. The exchange rate today is 12% so they would charge you 14.5% on the whole amount you are purchasing. Basically 2.5% on the whole amount you charged in the usa. Thats the way I see it?

    • Yes, you’re right. You can check the details at the Mastercard website https://www.bmo.com/home/popups/business/credit-cards/faqs which says “Our purchase exchange rate means the rate we pay to MasterCard International Incorporated on the day the transaction is posted to your account plus the markup percentage shown on the card carrier (for example, 2.5%) or in any notice we may send you.”

      I think someone may have been trying to say that to the customer but it ended up sounding like the 2.5% was only applied to the actual foreign exchange surcharge, which would make it a very small amount. For example, if the exchange rate was 5% and the purchase cost $100, the foreign exchange surcharge would be $5 and 2.5% of that would be 12.5 cents. Unfortunately, that’s not what they do. They apply another 2.5% to the $100 cost for an additional charge of $2.50.

  4. BMO U.S.DOLLAR MASTERCARD PHONED ME TO INTERROGATE BEFORING NOT ISSUING A CARD.
    I believed that BMO U.S.Dollar Mastercard’s goal is to make money.

    • Just to clarify, you are not posting a comment to a BMO site. I don’t work for BMO nor do they pay any attention to my personal website. I’m sorry you have had some problem with their US Dollar card. I personally also didn’t like it because it was going to cost me more to keep the card than I could save by using it.

  5. Before getting the care, I was told I could pay the BMO US $ credit card through online banking from any other financial institution as long as it was paid in US dollars. That’s not true.
    I’ve tried unsuccessfully to register the BMO US$ credit card as a payee through online banking for another financial institution and after a long phone call was told by my financial institution, you cannot pay a Canadian Merchants US$ credit card unless the credit card is from your own bank.
    When I called BMO, they have never heard of this issue before and couldn’t help at all. But her solution was to withdraw the US $ from my bank, walk over to BMO and pay the teller.
    Will be cancelling this card – asap!!!

    • Interesting! I’m sorry you had this issue. I was told that I had to pay the balance at the teller when I got my card, but that was a couple of year’s ago so things must have changed for the worse. I hope you find a card better suited to your needs.

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