The Best Credit Cards with No Foreign Transaction Fees [2020] Ricky February 20, 2020

The Best Credit Cards with No Foreign Transaction Fees [2020]

With the many changes in the credit card landscape since this article’s initial publication, as well as a recently announced devaluation to the Rogers World Elite MasterCard, here’s an update to this article for 2020.

Here in Canada, the vast majority of credit cards will charge a 2.5% fee on transactions denominated in a foreign currency. Whether it’s the Big 5 banks, independent issuers like American Express, or smaller financial institutions, the 2.5% foreign transaction fee is pretty much the norm across the industry. 

Some issuers might tack on the fee in a separate charge, while others will incorporate the markup directly into the FX rate that they use. Either way, you’re paying an extra 2.5% on all your foreign purchases that you don’t need to be paying. 

In this article, we’ll take a look at the best Canadian credit cards with no foreign transaction fees, as well as other potential solutions for foreign spending that might pique your interest.

In This Post

1. Scotiabank Passport Visa Infinite

Scotiabank’s latest premium travel credit card came out earlier this year, and it marks the first product offered by the Big 5 banks to have no foreign transaction fees.

Instead of charging you a 2.5% markup on FX transactions, the Scotiabank Passport Visa Infinite simply converts the transaction amount at the Visa FX rate, which is negligibly different from the mid-market rate.

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You’ll earn a minimum 1% return on all purchases on the card, with a higher 2% return available on grocery stores, dining, entertainment, and transit purchases. 

The card also offers 25,000 Scotia Rewards points as a signup bonus when you spend $1,000 in the first three months, which is worth $250 in travel credits, with an additional 10,000 points available if you were to spend $40,000 annually on the card (which would probably only apply to the small segment of cardholders).

I’ve raved about the Scotia Rewards program in the past and how it compares favourably to other banks’ in-house points programs, because it allows you to retroactively apply points to any travel purchase rather than forcing you to book travel through its own portal. In light of this, I’d value the signup bonus at pretty much exactly $250.

In addition, the card also comes with a complimentary Priority Pass membership together with six free lounge visits per year. It therefore serves as a great card to get yourself airport lounge access if you don’t currently hold the American Express Platinum Card or the Business Platinum Card.

The six passes can be used by the primary cardholder and any guests, so you could use this for six Priority Pass lounge visits for yourself, three visits for you and a guest, a single visit for a group of six travellers, etc. 

Throw in the comprehensive travel insurance benefits, including comprehensive emergency medical insurance (even for individuals aged 65+!) as well as flight delay insurance of up to $500, and the Scotiabank Passport Visa Infinite is my preferred choice for all my foreign transaction needs. 

The Scotia Passport has an annual fee of $139, which is not waived for the first year, but can be justified with the card’s No FX Fee feature if you happen to spend significant amounts in foreign currencies per year. There’s also a minimum annual income requirement of $60,000 (personal) or $100,000 (household) to qualify for this Visa Infinite product.

If you’re interested in the Scotia Passport, I’d be grateful if you considered using the Prince of Travel affiliate link to apply, which goes a long way towards supporting the website. Alternatively, you may also check websites like Great Canadian Rebates to see if any of their cash-back offers on this card might pique your interest.

2. Scotiabank Gold American Express

In 2019, Scotiabank refreshed their popular Scotiabank Gold American Express product to add the No FX Fee feature to this card as well, solidifying their reputation among the Big 5 banks for being the most friendly to foreign spending.

Unlike Visa and MasterCard, the American Express payment network doesn’t seem to disclose their exchange rates online, but one can safely assume that the exchange rate will be very close to the fair mid-market rate, with any difference being negligible.

This product is well-known for its highly rewarding “5-3-1” earning categories, which will earn you 5 Scotia Rewards points per dollar spent on dining and entertainment, 3 Scotia Rewards points per dollar spent on gas, transit, ridesharing, and streaming services, and 1 Scotia Rewards point per dollar spent on everything else.

However, it seems that the elevated earning rates on the Scotia Gold Amex aren’t applied to purchases made in a foreign currency, so that’s why I ultimately rank the Scotia Passport higher, whose 2% bonus category does apply on foreign purchases.

As with the Scotia Passport, the Scotia Rewards points you earn on this card are highly flexible and can be offset against any type of travel purchase retroactively at a rate of 1 cent per point. These points are therefore very useful for booking travel outside of the flights and hotels that you’d book with the traditional award programs.

What about the signup bonus? Well, we’ve historically seen signup offers on the Scotia Gold Amex higher than the currently available 20,000 Scotia Rewards points after spending $1,000 in the first three months, which isn’t really enough to justify the $120 annual fee. Therefore, unless you’re in a rush to get this card, I’d recommend waiting for a higher offer to come around.

When the time comes, if you’re interested in the Scotia Gold Amex, I’d be grateful if you considered using the Prince of Travel affiliate link to apply, which goes a long way towards supporting the website. Alternatively, you may also check websites like Great Canadian Rebates to see if they have cash-back offers that pique your interest.

3. HSBC World Elite MasterCard

The HSBC World Elite MasterCard is a highly versatile credit card with frequent elevated signup bonuses, and the lack of foreign exchange fees is one of the card’s biggest perks.

HSBC uses the MasterCard FX rate for all foreign transactions, which in fact tends to be, on average, closer to the mid-market rate than Visa’s (although again the difference is negligible).

You’ll earn a minimum 1.5% return (in the form of HSBC Rewards points) on all purchases on the card, with a higher 3% return available on travel purchases. 

The card also routinely puts on promnotional signup bonuses, the highest of which came in at the level of 105,000 HSBC Rewards points in December 2018, which is worth at least $525 in travel credits. More recently, we’ve seen signup bonuses like 60,000 points (worth $300) and 90,000 points (worth $450), so it’s definitely worth getting this card when one of the higher bonuses come around.

Similar to Scotia Rewards, HSBC Rewards is also very user-friendly in the sense that the points can be retroactively applied against travel charges at the cardholder’s will. As an added perk, HSBC Rewards points can be transferred to a handful of frequent flyer programs as well, including British Airways Avios and Cathay Pacific Asia Miles

Compared to the Scotia Passport, the HSBC World Elite’s lounge benefits aren’t quite as good, since you still need to pay for each lounge visit under the MasterCard LoungeKey program. Moreover, the insurance benefits don’t include flight delay coverage, which makes this less good of a travel credit card than it has the potential to be. Lastly, the minimum World Elite income requirement of $80,000 personal or $150,000 household could also be prohibitive. 

In my mind, all three cards among the Scotia Passport, the Scotia Gold Amex, and the HSBC World Elite represent excellent choices for avoiding foreign exchange fees.

Each has their respective strengths and weaknesses, and none is really a clear winner over the others, so one potential strategy could be to cycle through all three cards continuously, collecting the signup bonuses while always keeping one of the cards open for your foreign spending needs.

Other Credit Cards with No Foreign Transaction Fees

There are few other products and alternative methods worth mentioning. First off, there are a few products that were viable options for foreign spending, until they were devalued and no longer worth considering.

The Home Trust Preferred Visa also has no foreign exchange fees and no annual fee, but as of 2020, it also doesn’t offer any rewards at all on foreign spending, so you’d definitely be better off going with one of the above-mentioned products instead.

Meanwhile, the Rogers World Elite MasterCard recently moved to reduce its 4% cash back on FX purchases to a lower 3% for USD purchases and 1.5% for other currencies, as of June 2, 2020. Previously, the 4% cash back would offset against the 2.5% FX fee to give you a net 1.5% positive return, but with the recent round of changes, this card is no longer a viable option for your foreign spending either.

There are still a few credit cards in the marketplace that are offered by smaller issuers that emphasize their lack of foreign transaction fees as a selling point, such as the Brim MasterCard

Given how stubbornly the Big 5 banks have stuck to their guns with their FX fees over the years (the recent breath of fresh air from Scotiabank notwithstanding), it’s no wonder that 0% foreign transaction fees is seen as an easy differentiator by fin-tech upstarts around the country. 

The problem is that these small-time operations can be rather unreliable – Brim reportedly took months to send credit cards to customers after their applications were approved. You might be able to save a paltry amount of fees using these products and taking advantage of their 0% foreign transaction fees, but I personally haven’t bothered to deal with them for that reason.

Meanwhile, US credit cards could potentially be a good solution for foreign spending, but only if you have access to USD at a competitive exchange rate.

Most US-issued premium credit cards don’t charge any foreign transaction fees, so you won’t pay any currency spread when making the purchase itself, but rather when you convert CAD to USD to pay off the card. Services like VBCE, Knightsbridge, and TransferWise provide an exchange rate of close to 1% for this conversion, which is better than the 2.5% that the Canadian banks would otherwise charge, although not as good as the above-mentioned credit cards with no foreign transaction fees. 

If you do have access to USD at a more competitive rate (such as if you get paid in USD, or if you know a bank employee who can help you get USD at the mid-market rate), then this could be your go-to method for foreign spending, since the rewards you earn on US credit cards tend to be much more competitive as well.

The Stack Prepaid MasterCard is worth a mention, since you can load up Canadian funds and make foreign purchases at the MasterCard rate with no markup as well.

Of course, you also won’t be earning any rewards on those purchases since it’s not a credit card, so ideally you’ll want to pair the Stack card (for foreign ATM withdrawals) with one of the Scotiabank and HSBC credit cards (for foreign online and point-of-sale purchases) when you’re travelling abroad. 

Finally, it’s also worth asking the question as to whether you need to be avoiding foreign exchange fees on your foreign spending in the first place. Indeed, there’s a case to be made that as with any domestic spending in Canada, you should simply put your purchases on whichever credit card’s minimum spending requirement you’re working towards at the moment.

Think about it: if your spending were going towards the $7,000 minimum spend on the Amex Business Platinum to unlock a bonus of 75,000 MR points, wouldn’t that be hugely worthwhile compared to the 2.5% fees that you pay? A little food for thought.

Conclusion

Whether you’re travelling internationally, buying flights from foreign websites, or taking advantage of the cheap shopping south of the border, you really don’t want to pay an extra 2.5% in pesky foreign transaction fees if you don’t have to.

There really aren’t too many good options here in Canada, but you can’t go wrong with one of the Scotia Passport Visa, the Scotia Gold Amex, or the HSBC World Elite as your primary solution for foreign spending.

Brim, Stack, and US credit cards provide a few other viable options, and ultimately you should also consider whether the trouble of avoiding FX fees is worth it compared to keeping things simple and aiming to complete as many minimum spends as possible regardless of whether the spending is domestic or foreign.

Top Offers

HSBC World Elite MasterCard

100,000 HSBC Rewards points
20,000 HSBC Rewards points upon approval +
80,000 HSBC Rewards points upon spending $5,000 in the first 180 days

  • 6x points on travel purchases; 3x points on other purchases
  • Points transfer to British Airways Avios, Cathay Pacific Asia Miles, and Singapore KrisFlyer
  • $100 Travel Enhancement Credit

Offer for non-Quebec residents only. Quebec residents are eligible for a different offer.

Signup bonus
100,000 HSBC Rewards points
Annual fee
$0 for the first year, then $149
23 Comments
    1. Avatar
      Ricky

      Thanks for the suggestion, Bylo. I’ve definitely got a very close eye on Revolut 😉

  1. Avatar
    Mer

    HSBC Customer rep is a hassle and the application process is annoying but the card is good.
    Is this card churnable? Canceled last year.

  2. Avatar
    Gina

    Hey Ricky! Thanks for the heads up about the upcoming changes to the foreign currency cash back Rogers World Elite MC has planned. This is great information to know. I just got the card last month for my trip to Europe in May but I’ll be back home by the time the lower cash back comes into effect. Thanks again for the heads up.

    Interesting that they’re still advertising the 4% on their website. I guess they’ll just spring the news on unsuspecting customers in June.

  3. Avatar
    Steven Kastner

    The Brim card, while I originally needed to get in touch with them to get approved after months, has been a great go-to card for all out of country purchases, as well as Amazon.ca and if you book through VRBO, they were offering 30% cashback. Recently, my father-in-law got it and didn’t have to wait at all for the card–it showed up in good time. Advertise this one more, Ricky.

  4. Avatar
    Amar

    "And since the best interest of my readers is always top-of-mind, I will always provide you with the best available offers for any product I write about, regardless of whether I stand to benefit from that particular offer."

    You appear to have deviated from this policy, since you didn’t bother to mention that the two Scotiabank cards above have $55/$60 rebates associated with them on Great Canadian Rebates.

    A little disappointing, Ricky.

    1. Avatar
      Ricky

      This is a fair point and a reflection of the fact that GCR is more of a competitor of mine these days. I usually always make a note that readers should also check GCR for their offers (you’ll see it on my individual pages for these cards), but neglected to do so here, so I’ve added those in.

      Thanks for keeping me honest.

      1. Avatar
        Amar

        I appreciate the update and the honesty.

        I don’t have a problem at all with you benefiting from referrals (especially considering how much work you put in for all of us), just trying to spare your conscience! I’ll be sure to use your link when starting the Amex business platinum train 🙂

  5. Avatar
    Andy

    All forex on Scotia Gold, even in bonus categories, earns 1x

  6. Avatar
    Eric

    Thanks Ricky for another great article.

    Not sure if this is related to this article, but since you talked about Knightsbridge/Transferwise, I was wondering if you had any experience in using the Norbert’s Gambit to transfer CAD to USD. Apparently it’s one of the cheapest ways to convert CAD to USD with low risk. Haven’t tried it myself yet but wanted to know more about it

    1. Avatar
      Stu

      I only bother with Norbert’s gambit when I’m transferring large amounts, like 20000+. Just find a liquid cross-listed stock, and buy then sell it in different markets (canadian and US). You will need to check if your brokerage journals things properly by doing a web search. I use BMO investorline and there have been no problems, although there is some whacky entries in my portfolio for few days. In the end it all works out, and if you are clever enough and pick the right stock, you might fairly consistently make a small profit on the exchange even after commissions. Check online how your brokerage handles it, experiment on a small trade and consider the commissions to be your tuition. good luck.

      1. Avatar
        Jimmy

        Simpler to just use DLR and DLR.U.

        1. Avatar
          Bylo Selhi

          DLR and DLR.U but they’re still an implementation of Norbert’s Gambit.

          DLR/DLR.U are nominally $10 in their respective currencies. Many interlisted stocks are trade at over $100/share and trade with thinner spreads. So using a liquid interlisted stock may save 10x or more in spreads. That may not be significant on small gambits where the brokerage fees dominate the spreads. But on larger, say 6-figure gambits, there’s a significant cost to DLR’s relative simplicity.

          As for how to do a NG, the details vary from broker to broker and may depend on the type of brokerage account (margin vs. cash.) Justin Bender at PWL Capital has published detailed instructions for each of the major Canadian brokers. See e.g. https://www.pwlcapital.com/norberts-gambit-td-direct-investing/

  7. Avatar
    KC

    The Rogers cars is still giving me 4% and is still listing that online. Where did you hear about the de-valuation?

    1. Avatar
      KC

      Just saw the info online.
      Can someone comment if they are allowed to add the note mentioning that if you are from Quebec and don’t agree, you can cancel? Are they allowed to force that? I know there are regulations here about changing terms.

  8. Avatar
    Dennis B

    Correct me if I’m wrong, but I believe the Scotia Amex Gold does not earn the accelerators on FX purchases. Various DP’s show 1x earning. Amex acceptance outside of CAN/US is also pretty sparse. The Passport Visa Infinite does get the accelerator and has much wider acceptance globally, so would be the better card for frequent travelers.

    1. Avatar
      Ricky

      Thanks for letting me know Dennis. A few other readers’ experiences are similar to yours, so I’ve gone ahead and made a note of it in the article.

    2. Avatar
      Glen

      This is also my understanding and experience. Hence I use the Scotia Visa when I have to incur FX and never the amex.

  9. Avatar
    Leonidas

    I have the Scotia Passport. GCR had a $70 rebate a few months ago so the net fee was $69. I used it in the US last month and it was great. Got to use Priority pass lounge on the way there so we saved some money on airport food and claimed the 25000 against a travel purchase so I’m well ahead as far as the annual fee goes. I didn’t go for the Home Trust because of the poor customer service or the Rogers because it seemed a bit limited in rewards + no sign up bonus.

    I’ll probably cancel before annual fee is up for renewal and reapply before I need to travel abroad again.

  10. Avatar
    Ben

    My favourite topic! I like that HSBC actually earns an accelerator on travel spend, whereas the Scotia AMEX cards (considered travel reward cards) earn 4x on gas/grocery/entertainment that can be USED on travel, but the cards only earn 1x on travel itself.

    On the topic of Scotia AMEX, I would also consider those cards a counterpart to Rogers MC.
    They earn the same 4% less 2.5% FTF, so you could use Scotia for all foreign dining/entertainment and Rogers MC for all else spend.

    Or step it up a notch with TD Cash (US-domiciled USD card that Canadians can get without ITIN/SSN)
    Earn 3% on dining in USD, and the card has no FTF so it’s a solid option to use even in Canada.
    You do have to get US-domiciled bank account and buy USD to pay the card though.
    More info here: https://forums.redflagdeals.com/td-cash-visa-td-bank-n-2201330/

  11. Avatar
    SI

    Excellent summary! I had a hard time deciding between the Scotia passport and the Rogers MasterCard. In the end I went with rogers for the main reason that you stated it was a get it and forget it till you need it kind of card. Having said that if i don’t keep my Amex platinum card i might get it for the lounge bonuses. 6 passes isn’t that many but it’s good for at least 3 trips!

    I skipped home trust and brim for the same reasons you mentioned, too much of a pain in the butt. and as bg mentioned any US cards which might be a good card? that could be a good followup.

  12. Avatar
    BG

    I have Hometrust and can vouch for their poor service. They have limited hours and you may not have access to your card for a day if they decline you randomly. I use Rogers as its no fee.

    Ricky: I wonder if you would still come out ahead with a premium US card?

Ricky

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