2013: Still just one $25 annual fee, and no more, since I use the card enough. If you're a frequent short-term traveller to the USA, look at the Desjardins no-fee visa card that has a 3 days of free out-of-country emergency health insurance coverage (but read the terms and conditions!)
2012 FYI: I did end up getting charged the $25 annual fee, it just worked out that I got charged it as late as possible as it was charged on your anniversary date. The fee is rebated in future years as long as you do $1000/year, but you can't avoid getting dinged for it at least once.
Update: May 5, 2009 BMO US$ Mosaik Mastercard to start $25 Annual Fee
Others have stated that they've gotten letters stating that this card will no longer be annual fee-free.
I've confirmed this by emailing BMO, and they stated that "effective August 2009, a $25.00 annual fee will apply on our USD BMO MasterCard cards." I myself have not received any notice, and I consider myself a light (though regular) user of the card. Sept 2009 Update: Still no annual fee notice, I guess I've been grandfathered. Yay. See my follow-up article on no-annual fee US$ Mastercard and Visa options for Canadians.
So that means there are literally no options for Canadians that want a Canadian-based US Dollar Credit card for no fee, except for the TD Select Service one, which has its US$ Visa fee waived if you keep $5000 in the account.
Here are the main remaining options:
For the most part, I'll migrate to use by US-based bank account, which gives me a free US debit Mastercard/Visa:
- My page on US Bank Accounts for Canadians
- RFD thread on US Bank Accounts and US-based credit cards for Canadians
I'll lose the cash back and the float though
Some international transaction fees will be unavoidable for me now
Just One No-Annual-Fee Option
It looks like there is only one option for Canadians that want to get a US$ Credit Card for No Annual Fee. This is a credit card issued by a Canadian Bank, but denominated in US$ Currency. Therefore, if an American site required you to use US-issued credit cards, this card would not work, though I suspect they would often mean that they only accept credit cards in US$ currency, which means that it would work fine.
What Your Application is Based On
Applications for cards like these are based on your CANADIAN Credit Rating (so check your credit rating!!!). Any Canadian can apply for them. As well, since they are issued by a Canadian bank, you can also use your Canadian bill payment to pay them, or go to an actual branch and easily talk to a living breathing human about the card.
These cards are good for those that want to make purchases in Canadian dollars and avoid the annoying 2.5% charge/commission for paying in a different currency.
I've only found one such card that has no yearly fee. The card that I've found is the BMO Mosaik US Dollar Card. Yes, that's right, the Bank of Montreal, so it is obviously legitimate. You do not need to have an account there to sign up, nor to pay the bill. Their $0 annual-fee US card even has 0.5% cash back (and you can pay to upgrade to 1.0% cash back).
Here's the link to their online application page:
Here is a BMO Phone Numbers site.
Update: It looks like, according to another user, that if you use this card with Paypal, they will properly charge it in US$ (if the transaction was in US$) with no other commissions, which is good news! I don't think it was like this before.
Other Option: a US$ Card from a US Bank
I've written a guide for Canadians and other foreigners on opening up a US Bank Account. The accounts there are usually free and include things like a free pack of checks and a US$ Debit Card (which is actually a Visa/Mastercard down there).