25-05-2025
Stop overpaying on overseas purchases with a no-foreign exchange credit card
Most Canadian credit cards impose a 2.5-per-cent foreign-exchange fee on purchases made in other currencies. Over time, it adds up – costing you $25 for every $1,000 spent abroad.
This fee often goes unnoticed because it's embedded in the exchange rate displayed on your statement. But a credit card with no foreign-exchange (FX) fee eliminates this extra charge, helping you save on international purchases.
There are nearly a dozen no-FX-fee credit card options in Canada. Here are three that would appeal in different spending and travel scenarios.
The EQ Bank Card is a prepaid and reloadable Mastercard with no foreign-transaction fees on purchases and ATM withdrawals. This card is a good choice for anyone withdrawing cash when travelling, as EQ Bank doesn't charge the standard 3- to 3.5-per-cent foreign-exchange fee that most major banks charge. While the ATM operator usually charges a one-time fee – typically $3 to $5 – EQ Bank does not add additional costs.
For those seeking a traditional credit card, there's the Scotiabank Passport Visa Infinite Card. Besides no-FX fees, the card also includes six complimentary annual airport lounge passes and strong travel insurance. While it does carry an annual fee of $150, if you hold an eligible bank account with Scotiabank, that charge can be waived.
To qualify for the Scotiabank Card, there's a minimum annual personal income requirement of $60,000 or a household income of $100,000.
Another option is the Wise Card, which allows you to hold multiple currencies in your account. While it isn't an actual no-FX card, the cost for converting currencies is significantly lower than what banks charge. Since funds are stored on the card at the time of exchange, it appeals to anyone concerned about future currency devaluations.
While the card has no fees, you're limited to two free monthly withdrawals of up to $350 total. If you exceed that limit, there's a fee of $1.50 per withdrawal, and a fee of 1.75 per cent on any amount you withdraw over $350 total. The one-time fee charged by the ATM owner would also apply.
American Express does not offer a credit card with no-FX fees in Canada.
Even if you have a no-FX card in your wallet, it's possible to still get hit by foreign-transaction fees if you're not paying attention.
When making a credit card purchase abroad, you'll often be given a choice between paying in the local currency or your home currency – a process known as dynamic currency conversion. While opting for Canadian dollars might seem convenient since you'll know the exact amount you'll pay, it can end up costing more.
Paying in the local currency means your transaction is processed using the exchange rate set by your credit card network (Visa, Mastercard, or American Express.) If you're using a card with no foreign-transaction fees, this is the most cost-effective option. However, when choosing to pay in Canadian dollars, the merchant sets the exchange fee, which is likely higher.
Barry Choi is a personal finance and travel expert. He was previously affiliated with EQ Bank, Wise and American Express, but currently has no relationship with any of the brands mentioned.
