This post is also available in: FR
I retired a few months ago in the midst of a pandemic. I had several travel dreams that I redirected, like most people, to Quebec and its surroundings. But with the announcement of the land borders reopening on the American side, I can finally start moving around. And I’m getting ready to leave again. Where? Full South.
My Retirement Plan
The United States is always in my sights. First, because my daughter lives there: Nashville, Tennessee. But then because with his agreement, her home can bee used as a base for me to housesit and petsit in Uncle Sam’s country. Do you know about this type of service?
All you have to do is register on a specialized site. Mine is called Trustedhousesitters.com. It’s fun, safe and free except for the membership fee. I have done about fifteen 5-star housesitting jobs for which I have crossed American land or air borders. This has allowed me to discover places I would not have thought of. The pandemic deprived me of this pleasure, just like the snowbirds were deprived of theirs, which is having both feet in the sand.
In this context, I went to Pompano Beach, Florida in November to petsit a Chihuahua and a cat. And I extended my stay in a hotel, also with my feet in the sand. My daughter and son-in-law joined me for 5 nights at no charge at a Marriott Bonvoy oceanfront property.
Finally, I created a strategy for myself because from now on, I will be in the United States several months a year. Do you want to know more about my strategy?
Strategies for saving money
A credit card with no-FX fee
I pay for everything with my credit card and there’s no way I’m going to pay a 2.5% conversion fee on top of the exchange rate the banks charge on our purchases.
So, I explored the world of Canadian credit cards that gave me this advantage and several others. There are three of them:
In addition to not charging a conversion fee, each of them offers a sign-up bonus. Some promotions outdo themselves. One thinks of hundreds of dollars in bonuses or cash back that can be applied to hotel expenses, car rentals or excursions, to name a few.
I’ve seen that there are also other options with pre-paid reloadable credit cards that have no (or lower) conversion fees.
The KOHO Extra Mastercard Prepaid Card has no foreign transaction fee. It acts as a safeguard by allowing us to spend only what we already have put in our account. However, you cannot withdraw more than $4,000 per month and it does not come with insurance. It’s not practical to rent a car or book a hotel when you are asked to pay 15-20% of the transaction amount in advance. Read all about the KOHO Mastercard prepaid card.
Another option with the Brim World Elite Mastercard: its insurance is solid with the extended warranty and purchase protection. Its reward system is generous, at least with its partners if they interest you, otherwise a 2% cashback is respectable. The $199 annual fee is also more expensive than the other three cards. So I won’t consider it. Most still offer to waive the fee in the first year (or compensate with more points).
Finally, I thought about Canadian credit cards in US dollars. This is an option that all financial institutions offer.
However, they require a minimum amount to be kept in the US bank account to keep the service free, or have a limited number of transactions unless you pay for a package. Until then, it could still be okay. But again, the rewards offered, whether in cashback (1%) or for items at the 100 point for $1 redemption rate remain uninviting.
Get free hotel nights
Did you know that this credit card gives you a free night every year you renew it? This makes up for the $120 annual membership fee. That’s not counting the points generated when you join and when you use it.
In addition, the fifth night is free when you pay for four nights with your points. Finally, there are statuses that allow access to lounges and breakfasts, early arrivals and late departures. In short, I want all of that.
Earn and redeem points
The right credit card for the right expense. Even if it means putting a little sticker on the back of the card as a reminder. 3-4 cards are enough to optimize the expenses.
I cannot omit to introduce you to the American Express Cobalt® Card. It is so generous in multiplying its points in grocery stores or restaurants, that even if it charges conversion fees abroad, it is still amazing. Imagine what it does in Canada!
It gives you back 5%. Take out the 2.5% fee when you are in the US, and you are still left with half of it. What I also like about this card, besides the fact that American Express regularly surprises us with its bonus offers, is that you can convert your points into Marriott currency. I’m quite happy about that part.
Load to card in local currency
I always ask that my credit card be charged in U.S. currency when I am in the U.S. and not in Canadian dollars. There are abuses by some merchants who keep a commission on these conversions.
This article is dedicated to credit cards for snowbirds. But there are other ways to save money, especially when transferring currency between Canadian and U.S. dollars.
What about the credit score?
If you are among those who fear for your credit score when you apply for new cards, you should know that:
- 35% of your credit score comes from paying your balances on time. That is, to be seen by your lenders as a good borrower.
- 30% of your credit score comes from your monthly use of your various lines of credit granted by different lenders (mortgage, line of credit, credit cards, etc).
- You use $2,500 of your available credit each month, consisting of a single credit card offering $5,000. Your utilization factor is 50%.
- You have 2 credit cards with $5,000 each, and always use $2,500. Your utilization ratio will drop to 25%.
It is best to keep the utilization below 30%.
- 15% of your credit score comes from your credit history in Canada for all your credit lines (cards, mortgages, car loans, student loans, etc.). An average is calculated to establish this score. Thus, it is recommended to keep an “old” credit card active in order to maintain a good average.
- 10% of your credit score comes from diversifying your credit types (mortgage, line of credit, credit card , etc.)
- 10% of your credit score comes from new credit applications (cards, loans, etc.). Each time you make a credit inquiry, your credit score will be affected, and a few points will be lost. These points are generally recovered within a few months if you respect the above instructions (notably punctuality and the ratio of use). This means that asking for one or two extra cards will have little impact on your score in the medium term.
Conclusion: A word to our Snowbirds
It’s about time. It’s about time the borders opened both ways with our American neighbours. Especially for you Canadian snowbirds whose wings were clipped during this pandemic. Many of you came back in a hurry and couldn’t leave again. I thought of those who usually live year round in their motor homes.
I wish you a nice winter in your motorhome, camper, mobile home, condo or like me, petsitting the cat of another American vacationer.
This post is also available in: FRCome to discuss that topic in our Facebook Group!