To maintain Credit Score in Canada, should I use a Canadian Credit Card with no Foreign Transaction Fees in England?

Question

I am Canadian who will spend 9 months in England and 3 in Canada for the next 5 years. My 1 Canadian Credit Card (henceforward CCC) charges Foreign TRANSACTION Fees (FTF), and thus I am considering applying for a CCC without FTF (suggestions at Greedyrates, Ratehub.ca dated Oct. 18 2015) so that I can continue CCC activity and usage while in England. To minimise foreign EXCHANGE fees (which differs from FTF), I would spend only less than 50 GBP monthly.

Or else whenever in England, I will have no CCC activity and cannot improve my Canadian credit score.

What do you think? Is there anything wrong with my plan?

Answer 1

• Using your credit card does not in and of itself increase your score. Not using your credit card may increase your score, because your utilization ratio will be low, which is considered good.
• If you never use your credit card, the issuer may close it. Having your account closed will increase your utilization ratio (same balance divided by smaller total credit available = higher ratio) and may decrease your oldest account age. It's hard to say how much you have to use the card to keep it from being closed. 50GBP per month is probably enough.
• Both the foreign transaction fee and any spread (hidden fee) on the exchange rate are based on the size of the transaction. So the less you charge, the less of both fees you pay.
• During the five year period, the card may expire and a new one issued. You'd need a way to physically receive the new card to keep it active.