Here’s a wakeup call…
Every time you make a purchase that isn’t in Canadian dollars on your credit card, you’re charged a big fee to convert back to Canadian money.
You can be travelling in the USA or overseas or even just making an online purchase in another currency – doesn’t matter – that fee is going to kick in.
How much is a typical Canadian credit card foreign transaction fee?
It’s almost universally 2.5%, plus a small spread that the bank itself has to pay and passes on to you the consumer. The total cost should come in under 3%.
With most cash back credit cards paying only 1% in rewards, that 3% is eating up all of your rewards and then some!
Worse, if you buy something in a foreign currency, change your mind, and return it – you’re dinged on both sides of the transaction. That means you’ll lose 5-6% of your money to the bank and have nothing to show for it.
0% Foreign Transaction Fees Credit Cards in Canada
Given that 99% of Canadian credit cards charge this fee, it may surprise you that a few cards use to exist that charged absolutely nothing in foreign exchange fees other than the small spread the bank itself pays.
Unfortunately, those cards have done a disappearing act. Cards like the Sears Mastercard and a few Scotia cards that were grandfathered axed the foreign currency discount, and even the Rogers Mastercards, which is considered one of the Best Foreign Exchange Credit Cards, gives cardholders bonus rewards instead of waiving the fee.
And sadly, it looks like Chase may be winding down their business here in Canada altogether, having sold off many of the cards in their portfolio. Plus, after announcing that they would be closing all Chase Amazon.ca Visa and Chase Marriott Visa accounts on March 15th, 2018, in the world of No Foreign Exchange Fee cards, there are only slim pickings left.
Top Foreign Transaction Fee Credit Cards
Scotiabank Passport Visa Infinite Card
Just when we were all starting to lose hope, Scotiabank has stepped in to offer Canadians a premium travel rewards card with flexible rewards, a solid insurance package, and some really fun travel benefits ‒ with the new Scotiabank Passport Visa Infinite Card.
Cardholders will earn 1 Scotia Rewards point for every $1 spent, but that bumps up to 2 points for every dollar spent at grocery stores and restaurants, as well as on entertainment and daily transit (i.e. buses, subways, and taxis).
Aside from the fact that is this one of the rare cards that waives the usual 2.5% foreign currency exchange fee, it also stands out because of the insurance it includes:
- 12 out of 16 types of purchase and travel insurance,
- and even better is that if you are over the age of 65, you are still covered by 10 days of emergency medical insurance, which is rarer still.
Throw in a Priority Pass Membership, 6 complimentary lounge passes, a free secondary card, and the ability to earn 10,000 bonus points every year ‒ and the only real downside is the $139 annual fee.
Home Trust Preferred Visa
This little hidden gem is currently one of the only cards available in Canada that gives you a foreign currency conversion fee of 0% ‒ at $0 annual fee.
And while the thought of a card with no foreign transaction fee alone is music to our ears, the Home Trust Preferred Visa doesn’t stop there.
This card gives you 1% cash back on all your purchases, with no limits or restrictions to the amount you can earn.
You also get purchase and travel insurance included at not extra cost. So, when you are traveling and enjoying your no foreign exchange fee transactions, you can know that you are covered.
To top it all off, this card comes with a free Roadside Assist Membership. For a credit card with no annual fee, this is basically unheard of.
And yes, you did read that correctly. This card has no annual fee, no foreign exchange fee and no limits on the amount of rewards you can earn!
National Bank World Elite Mastercard
Unlike the first two cards on this list that waive the foreign exchange fee completely, the National Bank World Elite Mastercard does charge you the 2.5% on all your foreign currency purchases.
Where this card makes up for it, however, is that it will give you an extra 0.5 points for every dollar spent in foreign currencies.
With this card you will earn:
- 1.5 points for every $1 spent on your first $40,000 annually,
- 2 points for every $1 spent between $40,000 and $80,000 annually, and…
- 1.5 points for every $1 spent over $80,000 annually.
With points that are worth 1 cent in travel – a 1% return – using this card for foreign currencies could give you anywhere from 2% to 2.5% back.
Add to that the super impressive insurance package this card comes with, the $250 in travel fee reimbursements you can get with this card, and the fact that you get unlimited Montreal lounge airport access.
Rogers Platinum Mastercard
As far as no fee cash back credit cards go, this card is a rocket.
Some premium high-fee cash back credit cards struggle to offer a flat 1.25% cash back return with no caps or limits, yet the
On top of that, cardholders get a 1.75% boost in rewards (3% total) when making purchases in a foreign currency. That’s almost as good as having the 2.5% fee waived … except if you want to return something. Then you’re out of luck, you’ll lose your 3% rewards and be slammed with the 2.5% fee both ways.
This card even gives you a $25 cash bonus and a 2% return on any Rogers bills (Fido and chatr included) you charge to the card.
The big catch?
The card is designed for you to redeem your points for Fido or Rogers products and services along with a few other things. That said, you can set yourself a reminder and call once a year in December to request an actual cash statement credit that will show up in January.
This barely makes it qualify as a true cash back credit card, but it narrowly squeaks by.
Other than that, the only downside is the card is completely devoid of any sort of included insurance coverage – but that’s more than you could hope for with a no fee card that has awesome rewards anyway.
Rogers carries another card that is almost identical – the
Where the Rogers Platinum Mastercard is slightly better, however, is that the cash back you earn can also be used to go towards Blue Jays tickets and merchandise, any shopping done through TSC, and concessions at the Rogers Centre in downtown Toronto. But, if you like the look of the Fido card better, why not go for it?
Home Trust Secured Visa
A fantastic card for building or rebuilding your credit, the Home Trust Secured Visa also comes with a slightly reduced foreign exchange transaction fee of 2% instead of the usual 2.5%.
There are no frills with this card, but it does have no annual fee unless you choose to reduce your interest rate to 14.90% by paying an extra $59 per year – but that’s completely optional.
You aren’t going to save a ton on foreign purchases with this card, but if you’re rebuilding your credit anyway, it’s a nice extra.
RBC Cathay Pacific Visa Platinum
The RBC Cathay Pacific Visa, is a pretty standard travel rewards credit card linked to a major airline. You earn 1 mile per $1 spent on most purchases, with a 2 mile per $1 spent bonus on Cathay Pacific online travel purchases.
A little research shows Cathay pacific flights usually give a 2 cents per mile value, meaning you’ll typically get a 2% return on your spending.
But, there’s also a rare bonus for all purchases in foreign currency that gives you 1.25 miles per $1 spent, a 25% bonus. That pumps your return on spending up to 2.5% meaning you’ll likely break even after paying the 2.5% foreign currency fee.
The card comes with other benefits like instant green tier status in the Cathay Pacific Marco Polo Club and decent included insurance coverage.
Not the best card for FX savings, but not a bad option if you like to fly Cathay Pacific.
Beat The Bank’s Exchange Rates
There’s no cheaper way to exchange money than using a 0% foreign transaction fee credit card.
Bank’s typically charge 3%, or more, to convert your money in person and the rate for doing it online are usually about the same unless you are converting large sums of cash. If you want to convert any leftover cash after your trip is over, now you’re paying that 3%+ a second time.
You’ll even do better than you would at those discount foreign currency exchange places and you don’t have to make an extra trip.
Just swipe your no FX card, and smile knowing you didn’t waste any time or pay a dime more than you needed to.
Keeping one of these cards in your wallet just for foreign transactions is completely worth it.
Still not sure?
Still not really convinced that you want to commit to a new credit card just for making foreign currency purchases?
There is another option that isn’t a credit card but is way better than cash when travelling.
The CIBC Air Canada AC Conversion Card is a prepaid Visa card that lets you to load up to 10 different currencies (up to a total equivalent of $20,000), allowing you to purchase and store any desired currencies directly on the card for later spending when the rate is good.
No credit score check required and no worries about overspending.
It’s like a way better, more secure, easy to use, version of a traveller’s cheque with lower than normal currency conversion fees.
If you’re curious to know more, read our detailed review here.