Credit Cards

Card for use outside Canada

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  • Feb 28th, 2020 4:11 pm
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[OP]
Sr. Member
Dec 19, 2010
928 posts
467 upvotes

Card for use outside Canada

I have a friend (outside Canada) that operates a business with spend with business suppliers, travel etc. A local credit card has high fx fees when buying items in USD. I am considering ordering a card and adding my friend as a supplementary cardholder so he gets a card and can use but I am responsible for payment (he will send me payment each month) and I can collect points or cash back.

I trust the friend but want to make sure this won’t cause a problem from a KYC/AML perspective if transactions originate outside Canada most of the time or when large payments are sent to me to pay the card. I am comfortable explaining to the bank ahead of time as the use of the card is for legitimate purposes.

Any risks or liability of card charges that I should consider (other than friend not paying me back)? Any good card recommendations- preference for cash back with no max and relatively high spend (non revolving as we will pay off each month so interest rate isn’t a concern)? Would also prefer no annual fee but ok with it if it allows for a high cash back with no max card.

Thanks.
7 replies
Deal Expert
User avatar
May 8, 2009
15537 posts
14070 upvotes
Going to the Moon
I'd say no risk or concerns beyond what you already mentioned.

Your friend can get a USD prepaid card at CIBC, prepay it (in USD, buy USD elsewhere) and use that, but the cardholder limits might be too restrictive for large transactions.
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Deal Fanatic
Aug 24, 2016
9455 posts
10731 upvotes
The Prairies
No way in hell would I consider this for any friend, or family member for that matter.
Too much risk IMO.
What’s going to happen when there’s fraudulent transactions on his card?
Guess who gets to deal with all that headache?
Not to mention what you’ve already outlined in your own post, regarding the money (presumably large amounts) coming back to Canada every month to pay the bill.
Seems like a huge headache waiting to happen.
Deal Addict
Feb 4, 2019
2687 posts
4385 upvotes
BC
coolintheshade wrote: Seems like a huge headache waiting to happen.
^This. Don't mix friendship and finances, it could cost you both. Sounds like you woud be doing it for the rewards points, doesn't seem worth the risk to me.

Where does your friend live? Perhaps there are local options similar to Revolut that can help save on FX fees?
[OP]
Sr. Member
Dec 19, 2010
928 posts
467 upvotes
Totally get the friends and finances piece. Funds up to the card limit would be deposited with me in advance each month. The headache is what I’m concerned about the most both with the bank and potentially the cra. Spend will be for business purposes so around $20k/mo which even on a 1% cash back would be $2400. Possibly higher if I can get a 2% cash back card and/or monthly spend is higher. Kind of makes it worth the hassle.
Deal Fanatic
Mar 21, 2010
6591 posts
3764 upvotes
Toronto
The bank will not be okay with you using your personal account to essentially pay for a business's expenses. They don't even like it if it's your own business, let alone an unrelated party's.
Deal Addict
Feb 4, 2019
2687 posts
4385 upvotes
BC
callmebob wrote: Totally get the friends and finances piece. Funds up to the card limit would be deposited with me in advance each month. The headache is what I’m concerned about the most both with the bank and potentially the cra. Spend will be for business purposes so around $20k/mo which even on a 1% cash back would be $2400. Possibly higher if I can get a 2% cash back card and/or monthly spend is higher. Kind of makes it worth the hassle.
Don't forget to factor in the double FX. Your friend spends USD using your CAD card at Visa or MC FX rate, then needs to convert from their local currency to CAD to pay you back. Even when using a no-FTF credit card and a service like Transferwise for paying you back, that 1% easily gets lost in the double conversion. Basically, your friend is paying for your cashback. They might as well find a more efficient local solution and just send you some money as a gift rather than moving $20k/mo across borders to achieve the same effect.
[OP]
Sr. Member
Dec 19, 2010
928 posts
467 upvotes
rhw123 wrote: Don't forget to factor in the double FX. Your friend spends USD using your CAD card at Visa or MC FX rate, then needs to convert from their local currency to CAD to pay you back. Even when using a no-FTF credit card and a service like Transferwise for paying you back, that 1% easily gets lost in the double conversion. Basically, your friend is paying for your cashback. They might as well find a more efficient local solution and just send you some money as a gift rather than moving $20k/mo across borders to achieve the same effect.
Ha, good point, never considered all the fees involved!

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