Cards that waive or refund the fee for foreign currency charges are few and far between—but if you're a frequent traveller they’re worth seeking out.
Currency exchange board showing cross rates between various countries.
Millions of Canadians travel abroad with their domestic credit cards and don’t realize they’re racking up foreign transaction fees (often referred to as “forex” fees) that can amount to 2.5% of every purchase. The good news is there are a few credit cards that offer no foreign transaction fees, or return the fees to you as cash back, ultimately helping frequent travellers put the 2.5% back into their pockets.
If you like to explore other countries on vacation or your work frequently takes you abroad, it’s worth considering a no foreign transaction fee card that travels with you.
Home Trust offers one of the only credit cards that has no foreign transaction fees whatsoever. It’s a no-annual-fee card, plus you get a simple 1% cash back with no limits on how much you earn. Previously, there were no restrictions on where you can earn, but now you only receive cash back on domestic purchases. However, compared to other cards, the simplicity of Home Trust Preferred Visa is attractive.
As there are no annual fees, the card is pretty lean on extra coverage, but cardholders do receive roadside assistance at no additional charge. (Note this card is not available to residents of Quebec.)
Get more details about the Home Trust Preferred Visa*
One of the first cards from a major bank to feature no foreign transaction fees, the Scotiabank Passport Visa Infinite is great for those who are looking for a travel card that offers a few more perks. While users will pay $139 a year for the card, they’ll receive a complimentary Priority Pass membership with six free airport lounge visits a year, plus earn a bonus of 30,000 Scotia Rewards Points after spending $1,000 in the first three months of having the card.
Packing the simplicity of a no foreign transaction fee card and a flexible Scotia Rewards program where you can redeem for flights (without blackout dates), hotels and car rentals, the Scotiabank Passport Visa Infinite is a great rewards card for travel and everyday purchases here at home.
Get more details about the Scotiabank Passport Visa Infinite*
Brim Financial has three Mastercards to choose from, all of which don’t charge foreign transaction fees. The no fee, entry level Brim Card offers 1 point per $1 spent, plus a Boingo membership included with free global Wi-Fi—a great perk if you’re a frequent business traveller.
Featuring a unique digital interface where you simply swipe on the posted purchase to redeem your points, rewards are as easily earned as they are redeemed. Specifically, the mid-range World Mastercard earns 1.5 points per $1 spent, while the World Elite offering provides 2 points per $1 spent (both up to $25,000 in purchases). The only feature that comes up short is the cards’ out-of-province emergency travel medical insurance, which pales compared to most other travel credit cards.
The Scotiabank Gold American Express is a very competitive option, especially if you are a snowbird who travels frequently in the United States. Its points accumulation structure is similar to the American Express Cobalt Card’s, with 5 points per $1 earned on dining, groceries and entertainment purchases in Canada. Plus, the Scotiabank Gold American Express comes with no foreign transaction fees.
Redemptions can be made on travel at 1 point per $0.01—or 1%. At a $120 annual fee, the card offers robust traveller and purchase protection, and you can earn up to 25,000 bonus points (25,000 bonus after spending $1,000 within the first three months )—a $250 value.
Get more details about the Scotiabank Gold American Express*
HSBC’s World Elite Mastercard has robust travel features, no foreign transaction fees and strong earn rates. When you make foreign purchases on this card no fee is charged—only the exchange rate applies—and a $100 annual travel enhancement credit allows you to charge seat upgrades, baggage fees or airport lounge passes to the card and get them redeemed for credit on eligible airlines. The HSBC World Elite Mastercard also participates in Mastercard Airport Experiences provided by LoungeKey which gives users access to over 850 lounges worldwide (you’re charged at USD$27 a visit).
While the card has an annual fee, HSBC waives the first year for the primary cardholder, and you get emergency travel medical insurance coverage for trips up to 31 days. Earn 3% in points (or 6 points per $1) on eligible travel purchases, and 1.5% (or 3 points per $1) on all other purchases.
At $99 per year, the fee to use this card rings in lower than other competitive cards at $120 a year—and, as a bonus, the first year free is free. The card offers a robust suite of Visa Infinite benefits, from emergency health care coverage of up to $5,000,000 per insured person on eligible medical care and services required, trip cancellation and interruption insurance, baggage insurance and mobile device insurance. As for rewards rates, users earn 3 points per $1 on foreign purchases (since 1 point = $0.01 when redeemed for travel, that brings you 0.5% ahead compared to standard 2.5% foreign transaction fees). You’ll get 1.5 points per $1 on your everyday purchases.
The no-annual-fee Rogers World Elite Mastercard is super flexible, especially when it comes to earning and redeeming rewards. The standard 2.5% forex fee is still charged, but with 3% provided back, cardholders are essentially ahead 0.5% on the value of their U.S. travel and online shopping purchases in U.S. currency; note that other foreign currencies are not subject to the 3% earn rate. Users can redeem rewards towards all eligible purchases over $20 made on the card in the last 90 days. Plus, you get World Elite Mastercard insurance protection, which includes emergency air transportation or evacuation; emergency dental care; and more.
This Mastercard from Rogers is an excellent no-annual-fee option for those who want to earn cash back while travelling south of the border. It gives users 3% cash back on U.S. currency purchases, which works out to 0.5% when you factor in the standard 2.5% foreign transaction fee. On all other card purchases in either Canadian dollars or any other foreign currency, you’ll earn 1% back. The card doesn’t have a minimum income requirement, so those who don’t qualify for the Rogers World Elite Mastercard we covered above may want to consider it.
The 2.5% charged for every purchase you make in a foreign currency might not seem much, but can add up very quickly. The fee is charged for every purchase made in a currency that’s not Canadian dollars—even when you shop online. For perspective, that’s $25 in transaction fees for every $1,000 you spend on your card, and you have to pay the exchange rate as well.
No, the foreign transaction fee (typically 2.5%) is an additional charge added on top of the current exchange rate. These exchange rates are determined by the credit card companies, using the up-to-date value of the Canadian dollar and the value of whichever currency you’re converting to.
Your fee will vary according to which credit company you choose, so it’s worth it to look into the various options if you are a frequent traveller or you often find yourself shopping in another currency. Ultimately, choosing a card with no foreign transaction fee or rebate on foreign transaction fees is one of the best ways of saving money when you spend in a foreign currency.
As long as credit cards are widely accepted at your destination, this means you can avoid taking out large amounts of cash at currency exchange kiosks, airports or ABMs. Plus, purchasing with your card helps you earn rewards on every dollar spent, you get purchase protection and PIN protection, and can easily cancel your card if it is stolen abroad.
Our picks of the best no foreign transaction fee credit cards in Canada are based on our analysis of each card’s benefits and annual fees; foreign transaction fees and how they’re handled (if rebated); and whether there are additional rewards incentives for using the card domestically and/or abroad.
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Rogers mastercard will change their benefit on July 1, 2020, replacing the 4% (world elite) by a 1,5% cashback and the 3% for their others cards to 1%. This is no longer enough to keep them in the “No foreign transaction fee” category…