Canada’s 6 Best No Foreign Transaction Fee Credit Cards for October 2021

Most Canadian credit cards charge a 2.5% foreign transaction fee on all purchases made in other currencies. Here are the best credit cards in Canada with no foreign transaction fees.

Best Credit Cards with No Foreign Transaction Fees

Best Travel Credit Card with No Foreign Transactions Fees

The HSBC World Elite Mastercard is our choice for the best credit card in Canada with no foreign transaction fees. Whether you’re earning or redeeming, this card offers all sorts of value for purchases made in any native currency.

The card earns the equivalent of 1.5% back on all purchases, a great base rate for any card. It also earns 3% on travel purchases, a spectacular rate for that category. If you’re booking local hotels in a foreign currency, for example, you’ll earn lots of points, and you won’t have to worry about extra fees chipping away at your rewards.

HSBC Rewards points are quite flexible. They can be used as statement credit to cover any travel expense on the card. If you prefer to use frequent flyer programs to stretch the value of your points with business class seats or long-haul flights, you can also transfer HSBC Rewards to British Airways Avios, Cathay Pacific Asia Miles, or Singapore KrisFlyer.

Not to be forgotten, you’ll also get a $100 annual travel enhancement credit to offset the $149 annual fee. Officially, you can use this credit to cover seat upgrades, baggage fees, and airport lounge passes, but it’s easy enough to cash out for other purchases made with an online travel agency.

Finally, for a card with no foreign transaction fees, you definitely want to have one that you’ll actually be able to use while travelling abroad. As a Mastercard, the HSBC World Elite is accepted at the widest range of merchants worldwide.

Best Visa Card with No Foreign Transactions Fees

The Scotiabank Passport Visa Infinite Card sets itself apart as a true traveller’s card, offering strong welcome bonus of 30,000 Scotia Rewards points (worth $300 towards travel), no foreign exchange fees, and a 2% effective earning rate on grocery stores, dining, entertainment purchases, and daily transit purchases, both home and abroad.

Plus, as part of the welcome bonus, you’ll also earn 5 Scotia Rewards points per dollar spent on the bonus categories, which could add an extra 10,000 points to your haul.

Travellers can take comfort in earning a 2% return without having to pay FX fees on all their eats, drinks, entertainment, and public transportation when journeying abroad. You’ll also have no trouble using this card along your travels, thanks to the wide acceptance of Visa cards around the world.

Also, this card comes with a complimentary Priority Pass membership and six annual visits to participating airport lounges and restaurants. It’s always nice when you can extract multiple travel benefits from a single card (and a single annual fee).

Best American Express Card with No Foreign Transactions Fees

The Scotiabank Gold American Express Card is one of the best all-round credit cards in Canada. You’ll earn Scotia Rewards points to the tune of 5% back on groceries, restaurants, and entertainment, 3% back on gas, transit, and streaming services, and 1% back on everything else.

However, it’s worth noting that the card only earns 1% back on foreign purchases, even in the bonus categories. Still, it’s good to earn any amount of rewards when you’re eating abroad.

For a card that you want in your wallet anyway for its peerless earn rates at home, you’ll always have a solid no-FX option when travelling and paying at stores that take Amex.

The card is currently offering its best-ever welcome bonus, with up to 50,000 points if you apply before November 21. If you’ve been holding off on adding a card with no foreign transaction fees to your roster, there’s never been a better time than now.

Best Cash Back Credit Card with No Foreign Transactions Fees

If you’d prefer to earn cash back rewards on foreign purchases, the Brim World Elite Mastercard is the best in Canada. You’ll earn 2% back on all purchases. Brim points are worth 1 cent each and can be easily redeemed for statement credit, making them effectively as good as cash back.

When shopping at home, rather than category bonuses, you can earn extra rewards through Brim’s wide variety of retail partners, in some cases up to 10%. And when you’re abroad, you can take advantage of no foreign transaction fees on your foreign purchases.

With an annual fee of $199 (waived for the first year), it’s not the cheapest way to avoid foreign transaction fees. You’ll definitely want to try to maximize Brim’s partner rewards whenever you can to make sure you’re getting top value from the card.

But even if you struggle to use those benefits, a 2% base earn rate is unheard of for a Mastercard in Canada – it could easily pay off if you’re a heavy Costco shopper, for example.

Best No Fee Credit Card with No Foreign Transactions Fees

If a $199 annual fee is too steep, consider the entry-level Brim Mastercard instead. It has no annual fee, and earns 1% back on all purchases.

What sets this card apart from other no-fee cards is that it earns the same rewards on foreign transactions. For example, the Home Trust Preferred Visa Card earns at the same 1% rate on Canadian-dollar expenses, but it has no rewards on purchases made in other native currencies.

Even premium cards with no foreign transaction fees, like the ones offered by Scotiabank, knock the bonus categories down to just 1 point per dollar spent on foreign purchases.

With the Brim Mastercard, you’ll earn rewards abroad the same as you would at home. For no annual fee, that’s a great way to know that you’re getting value from your card for all of your purchases.

Best Business Credit Card with No Foreign Transactions Fees

For businesses with a lot of expenses in US dollars or other currencies, the Scotiabank Passport Visa Infinite Business is your best choice.

The card earns a steady 1.5% back in the form of Scotia Rewards points, along with a welcome bonus of 30,000 points, worth $300. Considering that other business credit cards charge a 2.5% foreign transaction fee, and often offer lower rewards rates, you might find immense value in paying the $199 annual fee if your business makes a lot of purchases in a foreign currency.

Not to mention, the card has great travel perks too. You’ll get a comprehensive insurance package, lounge access, car rental discounts, and assorted Visa Infinite benefits.

If you spend a lot of time abroad for your business and need a Visa card, this one’s a fantastic option not only for keeping your rewards up and costs down, but also for boosting your travel experience along the way.

No Foreign Transaction Fee Credit Cards: What You Need to Know

When choosing a credit card with no foreign transaction fees, you should familiarize yourself with what benefits a no-FX credit card can offer, what features to look out for, and how no-FX credit cards can fit into an optimized overall credit card strategy.

Why get a credit card with no foreign transaction fees?

Currency conversion fees are a quick way to chip away at your precious travel budget, whether it’s ATM withdrawals or purchases on your card.

When you’re spending abroad with your credit card, all transactions must be converted from the local currency to Canadian dollars before appearing on your account statement. Most cards levy a 2.5% foreign transaction fee on top of the spot rate.

For example, let’s say a purchase priced at US$75 converts to $100 (CAD). Ultimately it’ll be charged as $102.50. Instead, cards with no foreign transaction fees will convert transactions to Canadian dollars at the mid-market rate (as set by the bank or payment network), without a surcharge – in that case, you’d only be charged $100.

Cards without these fees are indispensable for travellers, as they effectively represent a 2.5% discount on all of your spending while travelling out of the country.

They’re also useful at home. If you do any online shopping at retailers based outside of Canada who charge prices in other currencies, you’d be subject to conversion fees unless you use one of these cards.

What should you look for in a credit card with no foreign transaction fees?

No foreign transaction fees itself is the obvious feature to look for, but not all of these cards are created equal.

There are a few basic no-fee cards that fit this bill, but the lack of foreign transaction fees is usually their only notable feature.

A select handful of travel-oriented cards have no foreign transaction fees, but it’s hardly the standard in Canada. Don’t assume that all travel cards have this perk, or you’ll be sorely disappointed; indeed, most of the highest-end premium travel cards still impose a 2.5% FX fee.

Beware that not all credit cards earn rewards the same way on foreign transactions.

Some cards, like the Scotiabank Gold American Express Card, earn different rewards rates for foreign currencies. You don’t get a category bonus if the purchase isn’t in the card’s native currency.

Other cards, like the Rogers World Elite Mastercard, can be the opposite: they may actually offer higher rewards on foreign transactions, but don’t waive the conversion fee. The higher rewards are meant to offset the fee.

On these cards, if you have to return an item, you’d be dinged for the conversion twice, once each way, with no rewards to show for it and a total loss of 5%. These cards are much better for daily travel spending, and not for online shopping or souvenir purchases. Instead, a true no-FX card is much more versatile.

What’s the optimal strategy for credit cards with no foreign transaction fees?

No foreign transaction fees is a relatively rare feature on Canadian credit cards. It’s rather frustrating to be dinged an extra 2.5% on all your spending when you’re abroad, so it’s a good idea to leave room for at least one credit card with no foreign transaction fees in your wallet.

Ideally, you’ll want a credit card with no foreign transaction fees that also earns strong rewards on your foreign spending, as well as some useful benefits that you’ll get value out of. Without these, the no-FX benefit on its own can often struggle to justify a card’s annual fee.

For example, the trade-off between the Scotiabank Passport Visa Infinite Card and the Scotiabank Gold American Express Card (both of which have no foreign transaction fees) is that the former has a lower 2% bonus earning rate that also applies on foreign purchases, whereas the latter has higher bonus earning rates of 3% and 5%, but the only apply on purchases made in Canada. Abroad, you’ll only earn 1%.

Depending on how much you travel internationally, you might well prefer the Scotia Passport over the Scotia Gold Amex, since it’ll be a better partner along your international trips with its higher earning rate, airport lounge benefits, and wider global acceptance on the Visa network.

Alternatively, you may also consider US credit cards, where the lack of foreign transaction fees is much more commonplace on both premium travel credit cards and basic no-fee cards alike. You can use those US cards in Canada, or anywhere else, without additional fees.

However, you’d still have to consider any costs involved in exchanging Canadian dollars to US dollars in order to pay your credit card bill, including fees, the spread, and currency fluctuations.

Either way, a savvy traveller always makes sure they have at least one credit card with no foreign transaction fees on hand for their international trips, tailored towards their foreign spending volume, tolerance for annual fees, and other benefits they might value.

Frequently Asked Questions

Below are some questions we frequently hear from readers about the best credit cards with no foreign transaction fees in Canada.

What will the foreign exchange rate be?

Conversion rates are set by Visa, Mastercard, and American Express. They’re very close to the true mid-market rate, often within tenths of a percent, and are usually much better than most other ways to exchange currency when you travel.

When is the foreign exchange rate determined?

The transaction will be converted to Canadian dollars at the time it is settled and posts to your account, not at the time it was authorized.

Will I get good rates on purchases in all currencies?

For all foreign currencies other than US dollars, credit cards will process two conversions: first from the underlying currency to USD, then from USD to CAD. You may be subject to a negligible spread on both conversions, but no additional fees.

Can I use cards with no foreign transaction fees anywhere in the world?

These cards all run on either the Visa, Mastercard, or American Express payment networks. They’ll be accepted at any merchant where Visa, Mastercard, or Amex is accepted, respectively.

If I’m offered the choice to pay in the local currency or to pay a converted CAD/USD amount, what should I do?

Always choose to pay in the local currency. The converted CAD/USD option is known as “dynamic currency conversion”, and is almost always a terrible deal that uses a very unfavourable exchange rate.

If you’re paying with a credit card that has no foreign transaction fees, you’ll be much better off paying the correct amount in the local currency and then having that converted into CAD/USD on your credit card bill based on the mid-market rate.