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. In fact, with the Rogers Mastercards offering bonus rewards instead of waiving the fee and the Chase Amazon.ca Visa no longer being available to new applicants, there’s only slim pickings left.
Even the Sears Mastercard and a few Scotia cards that were grandfathered axed the foreign currency discount.
In fact, it looks like Chase may be winding down their business here in Canada having sold off many of the cards in their portfolio, closing the Amazon.ca Visa to new applicants, and removing the Marriott Rewards Premier Visa website completely.
Top Foreign Transaction Fee Credit Cards
Home Trust Preferred Visa
Enter the 1%.
This little hidden gem is currently the only card available in Canada that gives you a foreign currency conversion fee of 0%.
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!
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 1.5% cash back return with no caps or limits, yet the Fido Mastercard just comes right out and does it. Wham!
Then, add on to that, you get a massive 2.5% boost in rewards (4% total) when making purchases in 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 4% rewards and be slammed with the 2.5% fee both ways.
You’ll even get a $50 cash bonus just for signing up if you can link your Fido bill to the card.
The big catch?
This 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 Platinum Mastercard
Almost identical to the Fido Mastercard, the Rogers Mastercard offers .25% more cash back (1.75% total) in exchange for a $29 annual fee.
That $29 annual fee might as well not be there though because you can completely eliminate it by setting up your Rogers, Fido, or Chatr bill to be paid automatically by the card – plus they waive the fee for the first year anyway.
Just like the Fido Mastercard, you can only get real cash by calling them every December to request a real cash statement credit. Otherwise, you’re stuck paying off a Rogers bill or buying their products and services.
When it comes to foreign currency fees, unfortunately they don’t give you the extra .25%. You’ll still get 4% cash back on all purchases made in a foreign currency and converted to Canadian dollars.
This card probably is slightly better than the Fido Mastercard if you can get the $29 fee waived, and maybe even if you can’t.
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. You can even return your purchase if you change your mind with no penalty at all.
Keeping one of these cards in your wallet just for foreign transactions is completely worth it.