Will Canadian Credit Card Foreign Exchange Fees start to disappear like they have in the U.S.?

In Canada, the issuers of travel rewards credit cards have taken many steps in their attempts to attract and retain customers for their card products. Whether it be a sign up bonus, renewal bonus, enhanced insurance packages, first year free, you name it, it has been done except for one new marketing move that is taking place in the United States.

The latest trend in the U.S. to capture credit card clientele is the elimination of Foreign Exchange fees. Foreign Exchange fees are a service charge that credit card issuers add to transactions made in any currency outside of your home country. When you make a purchase abroad (in person or online shopping) the issuing bank will convert the purchase amount at the prevailing exchange rate at the time of purchase and charge you the Foreign Exchange fee for providing that service. Most of the Foreign Exchange fees on Canadian credit cards hover around the 2% mark, so for someone who travels a lot or does a lot of online shopping outside of Canada the 2% fee can add up really quickly.

Eliminating the Forex fee on a credit card won’t appeal to everyone in Canada but it definitely would catch the eye of frequent travelers, business travelers and those making a lot of purchases in foreign currencies. The one common factor between all these types of card users is that most of them spend a lot and almost all of that spending is put on their credit cards. I feel that a competitive advantage could be had here if a Canadian credit card issuer was to follow in the footsteps of their U.S. counterparts with such a marketing move. So I approached all the major credit card issuers in Canada with the question as to whether they are planning on following the trend in the U.S. and eliminate the Forex fee on some or all of their cards to gain a competitive advantage. The overwhelming answer from those who responded was no. At this point it seemed that for most of the card issuers it was not even on their radar except for one, American Express stated that they are following the trend closely and while they have no plans on implementing it in Canada anytime soon they are trying to understand what it could mean for them in the future.

I’ll take a shot at what it could mean for American Express or any other issuer for that matter. First, I believe the issuers see this as a loss of revenue stream rather then a potential profit center. If marketed correctly, the first card that offers this feature along with their regular rewards and benefits will be a market leader and could take a sizeable chunk of the market for credit card users using their cards abroad. Overall, the first card that takes this route should see an increased cardholder base and in turn the revenue from the increased spend on these cards could easily eclipse the lost revenue stream on foreign exchange fees. This marketing move is relatively new so the Canadian banks may also be holding back to see what happens in the U.S. market and whether the cards that have no foreign exchange fees remain that way or go back to charging the fee.

Since it is the latest marketing trend south of the border, many cards in the U.S. have been jumping on the no foreign exchange fee bandwagon so the market is starting to see a saturation of the offer and it may not lead to any competitive advantage over other credit cards. With this type of offer, the issuer has to be a market leader to realize the revenue gain because once everyone else is doing it, the issuer will have to offer it as well, but not to gain customers, rather it will need to be done to keep their current customers from defecting to another card.

I would love to hear your thoughts on this subject, feel free to comment below on the pros and cons of this type of marketing move, who you think will be the first in Canada to offer (if any issuer at all) and how long you think it would take other banks to respond or if leave any other comment you think ties into this subject.

Delta eliminates changes/refunds to award tickets inside 72 hours

According to this post by Wandering Aramean, Delta will no longer permit changes or refund miles for SkyMiles award tickets that within 72 hours of departure. The new policy took effect on August 15th and applies to all members including elites. What this means is that you can no longer hold a reward booking with the hopes of changing or canceling it last minute. Apparently there were hundreds of thousands of seats that went empty due to people not showing up for their reward flights and then having the miles redeposited into their accounts. Delta has taken a lot of heat from frequent and even infrequent flyers to many of the changes they have instituted recently and would like to know from our Canadian SkyMiles readers, what do you think of this change?

Air Canada cuts service to Manchester, NH

According to Airline Route Updates Air Canada will be canceling service to Manchester, NH as of October 1st, 2011. The service out of Toronto is flown by Air Georgian eight times a week.

Hyatt Gold Passport Hotel Reward Changes and new Diamond Benefits

Hyatt Gold Passport is changing the required amount of points for reward nights at 43 of their hotels. The changes which are effective September 1, 2011 see 25 hotels increase their award category while another 18 will go down.

Along with these changes Hyatt Gold Passport has made the following changes to their Diamond elite level:
- Late Check out extended to 4pm (previously 2pm)
- Nightly Room Refresh
- New Welcome Amenity: Diamond members can now enjoy a new welcome amenity at Hyatt Place and Hyatt Summerfield Suites hotels. Diamond members can now enjoy a complimentary beverage (including alcohol except where prohibited by law) at Hyatt Place and a USD$5 credit at the Guest Market at Hyatt Summerfield Suites hotels, or, members can continue to choose 500 Hyatt Gold Passport bonus points as their amenity for stays at either brand.

Thanks to Loyalty Traveler for the info

WestJet adds service to San Juan, Puerto Rico

Towards the third week of July WestJet released their winter 2011/12 schedule and it included service to one new city for the airline. The new service to San Juan Puerto Rico launches on November 5th from Toronto and will operate twice weekly.

Flight Timings
Toronto-San Juan Dep 0910 Arr 1435
San Juan-Toronot Dep 1605 Arr 1950

Sutton Hotels Prestige cuts points earning hotels in half

The little known program called Prestige from the Sutton Place Grande Hotels group has cut the number of hotels members can earn points at in half. Now, half makes it sound huge but this little chain of hotels comprises of 4 properties in Chicago, Edmonton, Toronto and Vancouver. As of June 15, members of Sutton's FGP lost the ability to earn points in Chicago and Toronto leaving only the Edmonton and Vancouver locations as point earning properties. Members will however continue to enjoy Prestige benefits in Chicago and Toronto such as free Wi-Fi, priority rooms and free newspapers. Elite member benefits are also being met at the two properties.

Source: Sutton

American AAdvantage adjusting fees for close in rewards

American Airlines has made some changes to the fees they charge on award tickets that are issued less then 21 days before departure. Depending on when you are redeeming you may be paying more or less. See the following for clarification. As always Elite members are exempt from these fees.

AAdvantage Award Processing Charges

Ticketing less than 21 days prior to departure (Waived for AAdvantage Executive Platinum®, AAdvantage Platinum® and AAdvantage Gold® members using miles from their account)
Tickets issued prior to 8/25/11
Tickets issued 20 - 7 days prior to departure††	$50
Tickets issued 6 days to 2 hours prior to departure††	$100
Tickets issued on or after 8/25/11
Tickets issued 20 days to 2 hours prior to departureˆ	$75

Source: AA.com

3,000 Gold Points for joining Club Carlson (Targeted offer)

This offer was added to our Club Carlson page this morning and as always free points are good thing to take advantage of. However this is a targeted offer so it may not work for everyone (YMMV).

Carlson Hotels Club Carlson
3,000 Bonus Gold Points when you join the Club Carlson program using promotion code PPH611. Full details. Until Aug  31, 11
Targetted Offer - May not work for everyone

Capital One credit cards now available in Quebec and Northern territories

This is a topic I received many emails on, asking whether we knew why Capital One Cards were not available in Quebec or when would they be. Well, people in Quebec, the Northwest Territories, Nunavut and the Yukon will be happy to know that on Tuesday July 19th Capital One opened up their offerings to all residents of these provinces and territories.

RBC Avion 50% Transfer Bonus to British Airways Executive Club

In case you missed it on our main or in our newsletter, British Airways and RBC are once again offering Avion cardholders a 50% bonus on transferring RBC Rewards points to BA Miles. The offer runs until August 31 and if past years are any indication we should see it again this November.

This is a great offer to take advantage of if you are not looking at booking travel using the set RBC Rewards chart as BA provides some decent economy, business, and first class offerings to the U.K. and beyond. They also offer miles for upgrades so if you do not have enough miles for a business class or first class flight you can use miles to upgrade a paid fare in economy, economy Plus, or business class. Another good use of BA miles is with their partners from the OneWorld Alliance which means you don't have to redeem for BA flights via London but go direct on airlines like Cathay Pacific to Asia or American Airlines to the U.S. One thing to watch out for however with BA is seat availability, we have heard mixed stories of people being able to get or not get reward seats on flights plus redemptions on BA to the U.K. can carry heavy taxes and fuel surcharges.


For more details on this offer please visit British Airways