With the Canadian dollar not doing so great, and a lot of Canadians buying products from places like Amazon.com and Ebay.com, there has been a surge in demand for no foreign transaction fee credit cards in Canada.
As you imagine, this is not something Canada’s banks do out of kindness or generosity – they will want to make money on the interest they charge on these cards! Even though It is not the responsibility of credit card companies to charge customers for international transactions, due to the high charges from banks, these costs are passed onto consumers in smaller amounts. This can be a huge problem for Canadians who travel internationally, especially if they travel frequently.
Fortunately, some credit cards are still flexible enough to give you great service without charging you an arm and a leg; these are known as no foreign transaction fee cards. These cards allow you to make purchases and withdraw cash in whatever currency you please without incurring any additional fees beyond those you normally pay with your card. Credit cards with no foreign transaction fee can be particularly advantageous when travelling abroad since they reduce the cost of using your card in a foreign country.
What Is A Foreign Transaction Fee?
There is a huge difference between foreign transaction fees and exchange rates regarding understanding the bank’s motivations. The foreign transaction fee (which we will refer to as the ‘FTF’) is a fee that your bank charges you every time you use your credit card abroad.
You think of foreign transaction fees as something that you have to pay to use your credit card abroad. However, the reality is exactly the opposite! The FTF is a fee that applies when you exchange Canadian or U.S. currency into another currency or use your card abroad at a rate below the prevailing market rate.
A one-time FTF would be ridiculous, but you will find that most banks charge a monthly fee equivalent to the cost of the exchange rate. In this case, you would pay 3% if you used your card in a country where the exchange rate was 1% (the best scenario). If the market rate for your card’s currency is 2%, then you would pay 4%. (If rates were 10%, then you would pay 12%). You can see how this works when rates are high.
The Best No Foreign Transaction Fee Credit Cards in Canada
All of these cards offer no annual fees and no foreign transaction fees (so you can use them anywhere in the world). The interest rates are low, which helps balance transfers and keeps your spending low. If there’s something that stands out about them, it’s their long 0% promotional periods on balance transfers and no annual fees or hidden costs involved with those deals.
The list below shows the best no foreign transaction fee credit cards in Canada.
1. Scotiabank Passport Visa Infinite Card
With a decent welcome bonus of 30,000 Scotia Rewards points (worth $300 toward travel), no foreign exchange fees, and an effective earning rate of 2% on grocery store, dining, entertainment, and daily transit purchases made at home and abroad, the Scotiabank Passport Visa Infinite Card distinguishes itself as a true traveller’s card.
In addition, as part of the welcome incentive, users also earn an additional five Scotia Rewards points for every dollar they spend in the bonus categories, which could bring their total up to 10,000 points. As part of a complimentary with this card, users are offered Priority Pass membership and six annual visits to participating restaurants and airport lounges.
When visiting another country, tourists may rest easy knowing they will receive a 2% return without having to pay FX costs on all of their meals, drinks, entertainment, and public transportation. The widespread acceptance of Visa cards worldwide ensures that you won’t encounter any problems using this card when travelling.
The Priority Pass membership and six annual visits to participating restaurants and airport lounges are also complimentary with this card. It’s always good to be able to get several travel perks from a single card (and a single annual fee).
2. HSBC World Elite Mastercard
One of the finest credit cards in Canada with no foreign transaction fees is the HSBC World Elite Mastercard. This card gives a variety of value for transactions made in any native currency, whether you are earning or redeeming.
The card offers 1.5% back on all purchases, which is a fantastic base rate for any card. Additionally, it makes money on travel-related transactions at a remarkable rate of 3%. For instance, you’ll earn a lot of points and won’t have to worry about additional costs eating away at your benefits if you book local hotels in a foreign currency.
The use of HSBC Rewards points is very versatile. To pay for any trip expenses on the card, you can use them as statement credits. You can also transfer your HSBC Rewards to British Airways Avios, Cathay Pacific Asia Miles, or Singapore KrisFlyer if you prefer to use frequent flyer clubs to maximize the value of your points on business class tickets or international travel.
You will also receive a $100 annual travel optimization credit to compensate for the $149 annual charge, which should not be overlooked. However, it’s simple to use this credit for other purchases made through an online travel agency. Officially, you can use it to pay for seat upgrades, cargo fees, and access to airport lounges.
3. Amazon.ca Rewards Mastercard
Another credit card that largely goes unnoticed is the Amazon.ca Rewards Mastercard. When you consider the advantages, it is reasonable, but to receive a higher earn rate, you must be an Amazon Prime member. There is no denying that receiving 5% back at Amazon.ca is fantastic, but only if you make a significant purchase there. Although Whole Foods’ 5% back is alluring, using your American Express Cobalt Card to pay there would provide you with a better deal.
Similarly, non-prime members receive only 1% cash back on international transactions. You would essentially be paying 1.5% because the 2.5% currency cost still applies. Overall, if you’re an Amazon Prime member and frequently shop on Amazon, this card is worthwhile taking into account.
4. Brim World Elite Mastercard
The Brim World Elite Mastercard is the top credit card in Canada if you wish to receive cash-back benefits on international transactions, as users receive 2% of all purchases back. Brim points are practically equivalent to cash back because they are worth $1 each and are simple to convert to statement credit.
Instead of category incentives when you shop online, you can earn additional rewards from Brim’s extensive network of retail partners, sometimes up to 10%. Additionally, you can benefit from no international transaction costs while making purchases abroad.
It’s certainly not the cheapest means of avoiding foreign transaction fees, costing $199 annually (waived for the first year), but to ensure that you are receiving the most out of the card, you should strive to optimize Brim’s partner benefits whenever you can.
5. Scotiabank Gold American Express Card
One of the best all-around credit cards in Canada is the Scotiabank Gold American Express Card. The following categories will earn you Scotia Rewards points: 5% back on groceries, restaurants, and entertainment; 3% back on gas; 1% back on everything else. Though even in the bonus categories, the card only offers 1% cash back on overseas transactions. Even so, earning any kind of benefits when dining overseas is a nice thing.
You’ll always have a reliable no-FX choice when travelling and making purchases at Amex-accepting merchants for a card you want in your wallet because of its unrivalled earn rates at home. Currently, the card is giving new customers a welcome offer of 40,000 points. There has never been a better moment than now to add a credit card with no foreign transaction fees to your list.
6. Wealthsimple Cash Card
Undoubtedly, many credit cards are available without foreign transaction fees, but most are only valid for purchases. What if you require money? Your best option is the Wealthsimple Cash Card because it has no foreign transaction fees for ATM withdrawals. You will only be required to pay the ATM operator’s one-time fee, typically $3. The daily withdrawal cap is CAD 1,000, but that should be more than enough for you to get by. The withdrawal limit is CAD 500 per transaction.
You must load money onto the Wealthsimple Cash Card in advance to use it because it is a prepaid credit card. Positively, there are no gimmicks with this prepaid card because there are no monthly or yearly fees. Additionally, 1% of every purchase is earned in cash rewards. This card is ideal for travellers who don’t want to pay any fees.
Final Words
The number of choices can be overwhelming – and not just because there are so many cards to choose from.
The trick is to find the best card for your needs, which will vary depending on where you travel and how much you spend while travelling. We have done the hard work for you and found some great cards that don’t charge those pesky fees.