You are currently viewing Your card probably charges you a 2.5% fee on all your transactions in foreign currencies

Almost all travelers are sadly unaware that almost all credit cards in Canada charge a 2.5% foreign transaction fee. Yes, you’re probably paying that right now and have been for years (even if it’s not written on your statement)… but thankfully, you can avoid it so easily starting now (or do even better).

It’s another of the many (many, many) examples of travel tips that are so simple… but that most people unfortunately don’t even know exist. It’s normal; when you don’t know, you don’t know.

But it’s a good reminder of the importance of taking the time to learn about how to travel for less… just as it’s obviously beneficial to invest time in learning about any subject when you want to become better at it.

Flytrippers happens to be here to help!

So here’s this introduction on foreign transaction fees since a great deal to avoid them AND get ≈ $411 ends very soon!

 

Video on foreign transaction fees

I’ve made a video for this introduction if you’d rather watch than read.

 

 
 
 
 
 
View this post on Instagram
 
 
 
 
 
 
 
 
 
 
 

 

A post shared by Flytrippers ✈ (@flytrippers)

 

Otherwise, here’s the usual text version.

 

Overview of foreign transaction fees

Losing money by making payments is literally the complete opposite of what the wonderful world of travel rewards should be (being rewarded by making payments).

Foreign transaction fees are terrible, no matter how you call them:

  • FX fees
  • Foreign exchange fees
  • Foreign conversion fees
  • Foreign currency conversion fees

Here are the basics of foreign transaction fees:

  • Fee on all transactions in currencies other than the Canadian dollar
  • Fee of 2.5% added whether you’re traveling or buying online
  • Fee that is unnecessary and on top of the daily exchange rate
  • Fee charged very sneakily by your card issuer (the financial institution) 
  • Fee that doesn’t appear on your statement (hidden in the converted amount)
  • Fee that means you’re paying to pay, instead of being rewarded
  • Fee that surpasses the regular earn rates on most cards
  • Fee charged by all credit cards in Canada, except 8

So it’s thankfully very, very easy to avoid these FX fees.

But how to avoid FX fees depends on 3 scenarios, according to your level of ambition:

  • For travelers interested in maximizing
    • Become a travel rewards pro
    • To do better than just save 2.5%
  • For travelers less interested in maximizing
    • Get 1 of the 8 no-FX-fee cards below
    • To at least save 2.5% on everything
  • For travelers really not interested in maximizing
    • Get a prepaid card with no FX fees
    • Save 2.5% on everything without a new credit card

Below, I go into more detail about these scenarios to help you after I show you clearly which cards have (and don’t have) foreign transaction fees.

 

Cards that charge foreign transaction fees

There are only 8 Canadian credit cards that don’t charge foreign transaction fees (only 6 if you live in Québec).

Best credit cards with
no foreign transaction fees
WELCOME BONUS
( VALUATION)
Other
benefit
BEST
HSBC World Elite Mastercard (non-QC)
Card:
Bonus: spend $1k in 2 mos. (see QC offer)
Rewards: ≈ $418
Card fee: $0 $149
Welcome
bonus
is highest Visa/MC
ends September 29th
Scotiabank Passport Visa Infinite Card
Card:
Bonus: spend $1k in 3 mos.
Rewards: $270
Card fee: $150
Airport
lounge access
6 passes
ends October 31st
Scotiabank Gold American Express Card
Card:
Bonus: spend $7.5k in 1y (or $1k)
Rewards: $775
Card fee: $120
Very good
travel insurance
and earn rate
ends October 31st
Scotiabank Platinum American Express Card
Card:
Bonus: spend $3k in 3 mos.
Rewards: $560
Card fee: $399
Airport
lounge access
10 passes
ends October 31st
No fee
Brim Mastercard
Card:
Bonus: no welcome bonus
Rewards: $0
Card fee: $0
No-fee
card
add-on w/ other card
Brim World Elite Mastercard
Card:
Bonus: no welcome bonus
Rewards: $0
Card fee: $0 $199
No minimum
spend
add-on w/ other card
limited time
Home Trust Preferred Visa Card
Card: not available in Québec
Bonus: no welcome bonus
Rewards: $0
Card fee: $0
No minimum
spend
add-on w/ other card
Home Trust Equityline Visa Card
Card: not available in Québec
Bonus: no welcome bonus
Rewards: $0
Card fee: $0
No minimum
spend
add-on w/ other card
Terms and conditions apply. Flytrippers editorial opinion only. Financial institutions are not responsible for maintaining the content on this site. Please click "See More" to see most up-to-date information.
Best credit cards with
no foreign transaction fees
BEST
HSBC World Elite® Mastercard®
HSBC World Elite Mastercard (non-QC)
Card:
Bonus: spend $1k in 2 mos. (see QC offer)
WELCOME BONUS
ends September 29th
Rewards: ≈ $418
Card fee: $0 $149
Other benefit: Welcome bonus
is highest Visa/MC
Scotiabank Passport® Visa Infinite* Card Scotiabank Passport Visa Infinite Card
Card:
Bonus: spend $1k in 3 mos.
WELCOME BONUS
ends October 31st
Rewards: $270
Card fee: $150
Other benefit: Airport lounge access
6 passes
Scotiabank Gold American Express® Card Scotiabank Gold American Express Card
Card:
Bonus: spend $7.5k in 1y (or $1k)
WELCOME BONUS
ends October 31st
Rewards: $775
Card fee: $120
Other benefit: Very good travel insurance
and earn rate
Scotiabank Platinum American Express® Card Scotiabank Platinum American Express Card
Card:
Bonus: spend $3k in 3 mos.
WELCOME BONUS
ends October 31st
Rewards: $560
Card fee: $399
Other benefit: Airport lounge access
10 passes
No fee
Brim Mastercard
Brim Mastercard
Card:
Bonus: no welcome bonus
WELCOME BONUS
Rewards: $0
Card fee: $0
Other benefit: No-fee card
add-on w/ other card
Brim World Elite Mastercard Brim World Elite Mastercard
Card:
Bonus: no welcome bonus
WELCOME BONUS
limited time
Rewards: $0
Card fee: $0 $199
Other benefit: No minimum spend
add-on w/ other card
Home Trust Preferred Visa Card Home Trust Preferred Visa Card
Card: not available in Québec
Bonus: no welcome bonus
WELCOME BONUS
Rewards: $0
Card fee: $0
Other benefit: No minimum spend
add-on w/ other card
Home Trust Equityline Visa Card Home Trust Equityline Visa Card
Card: not available in Québec
Bonus: no welcome bonus
WELCOME BONUS
Rewards: $0
Card fee: $0
Other benefit: No minimum spend
add-on w/ other card
Terms and conditions apply. Flytrippers editorial opinion only. Financial institutions are not responsible for maintaining the content on this site. Please click "See More" to see most up-to-date information.

 

I’ll be very clear: if your credit card isn’t in that table, you’ve always paid a 2.5% FX fee on everything you’ve bought in a currency other than the Canadian dollar. Simple as that.

I repeat it because there are always many people who say “no no, my card isn’t in that table and it doesn’t charge me”… just because they don’t see any fees on their credit card statement.

The FX fees don’t appear on your statement! That doesn’t mean you’re not paying a 2.5% foreign transaction fee: it just means you don’t know you’re paying a 2.5% in foreign transaction fee.

Every time you make a purchase in a foreign currency, the bank converts the amount into Canadian dollars at the daily exchange rate THEN adds a 2.5% fee that most people don’t know about.

(It’s true that it’s very sneaky of the banks to hide it when so many people aren’t informed on the subject… get revenge by simply taking all the large amounts of free travel they give you so easily with their welcome bonuses!)

If you still don’t believe me (an all-too-common mistake haha), take a look at your credit card‘s official page on the bank’s website. You’ll see that it’s written that you pay a 2.5% foreign transaction fee, in the rates and fees section.

If you still think I’m wrong, share in the comments, maybe there are cards that are more obscure (and therefore don’t have a welcome bonus and therefore should be avoided) that don’t charge FX fees too. I doubt it, but I’m certainly not perfect.

By the way, I’ve excluded the few cards that give you a higher earn rate on foreign transactions to help offset their foreign transaction fees, because they’re frankly terrible. And finally, some rare cards do charge a different percentage instead of 2.5%, but it’s really rare!

 

What NOT to do to avoid foreign transaction fees

Before telling you how to avoid them, here are a few common mistakes.

Here are the 3 things NOT to do to avoid FX fees:

  • Converting money in Canada and paying in cash
    • You’ll get a terrible exchange rate that’s worse than FX fees
    • And you’ll get zero rewards, so it’s even much worse
  • Withdrawing money abroad and paying in cash
    • You’ll pay the FX fees at the ATM with debit cards too
    • And you’ll get zero rewards, so it’s even much worse
    • There are ways to withdraw money almost free
    • But even that is not great because you still earn zero rewards
  • Choosing to pay in Canadian dollars abroad
    • Sometimes the option shows up on the payment terminal
    • That’s even worse, much worse… never do that

If you like to travel, you should obviously never pay for anything with a debit card or cash unless they simply do not accept credit cards, no matter whether it’s here or abroad. Here we’re talking about payments; withdrawing cash for less is a whole other topic I’ll keep for a separate post (but I put a teaser at the very end.)
 

What to do to avoid foreign transaction fees

Here are 3 simple ways to avoid foreign transaction fees, depending on your level of ambition.

 

Scenario 1: If you want to maximize

It’s simple: it’s better to use a card that gives you a huge welcome bonus and pay a 2.5% foreign transaction fee… than to save 2.5% but earn rewards at the painfully slow normal earn rate of all cards.

The basics in the world of travel rewards (but really it should be the basics of everything in life, if people were better at doing math), is to always look at the total equation. The total value. Never just one side of an equation.

So if you want to maximize the total value you get from your foreign purchases, the best way to avoid foreign transaction fees is not to avoid them at all!

Don’t just look at the 2.5% fee, look at the rewards it gives you too! The total equation.

Welcome bonuses are the key to earning $1,000+ easily every year with travel rewards (like our Flytrippers readers like you who have earned over 2 million dollars in free travel with our deals).

It’s THE most important thing to understand in the whole wonderful world of travel rewards! Welcome bonuses really are the key!

It’s the fast way to get lots of free travel easily! And having more cards will also improve your credit score (contrary to common myth) and give you more awesome benefits. As long as you folow the 3 basic rules, of course.

In short, if you want to be a pro and really maximize, you simply have to aim for 100% of your spending to go towards unlocking big welcome bonuses and avoid as much as possible earning the very slow way with regular earn rates on your purchases.

This includes your foreign currency pruchases.

For example, let’s say you’re going to spend $3,000 on foreign currency purchases.

Let’s say you’re a savvy traveler who takes advantage of the welcome bonus on the CIBC Aventura Gold Visa Card ($15,000 minimum income) or the very similar CIBC Aventura Visa Infinite Card ($60,000 minimum income) to get $547 in free simple points that can be redeemed for any travel expense booked on any site (and also get 4 free airport lounge passes worldwide).

CIBC Aventura® Gold Visa* Card
Flytrippers Valuation
of Welcome bonus (net value)
$
Rewards: $547*
Card fee:
limited time

min. income: $15k (or $15k household)
spend $3000 in 4 months
Terms and conditions apply. Flytrippers editorial opinion only. CIBC is not responsible for maintaining the content on this site. Please click "Apply Now" to see most up-to-date information.
CIBC Aventura® Gold Visa* Card
Flytrippers Valuation
of Welcome bonus (net value)
$
minimum income
required: $15k (or $15k household)


limited time
Rewards: $547*
Card fee:

spend $3000 in 4 months
Terms and conditions apply. Flytrippers editorial opinion only. CIBC is not responsible for maintaining the content on this site. Please click "Apply Now" to see most up-to-date information.

 

The bonus gives you 18.2% back on $3,000 in purchases!

If you deduct the 2.5% foreign transaction fee, you’re still looking at a 15.7% back in net value! If you know how to count, that’s a lot better than using a card that saves you 2.5% and gives you 2%… 15.7% back is a lot more than 2%. It’s 7 times more! It’s not even comparable!

It’s logical to have the reflex to want to avoid the 2.5% fee, but the world of travel rewards is counter-intuitive. Your first impulsive reaction is probably not the right one.

It’s simple: just look at the net value, always! The total value, the total equation!

It’s another of the 6 most important things in our infographic that sums up the basics of travel rewards.

For those with incomes of $80,000 (personal) or $150,000 (household), one of the best welcome bonuses right now is on the HSBC World Elite Mastercard, which happens to be one of the only 8 cards with no foreign transaction fees, so it’s the best of both worlds right now.

The increased offer ends September 29 and gives you ≈ $411 for free (offer is a bit different for Québec residents), it’s an incredible deal!

HSBC World Elite® Mastercard®
Flytrippers Valuation
of Welcome bonus (net value)
≈ $
Rewards: ≈ $418*
Card fee: $0 $149
ends September 29th

min. income: $80k (or $150k household)
spend $1000 in 2 months (see QC offer)
Terms and conditions apply. Flytrippers editorial opinion only. HSBC is not responsible for maintaining the content on this site. Please click "Apply Now" to see most up-to-date information.
HSBC World Elite® Mastercard®
Flytrippers Valuation
of Welcome bonus (net value)
≈ $
minimum income
required: $80k (or $150k household)


ends September 29th
Rewards: ≈ $418*
Card fee: $0 $149

spend $1000 in 2 months (see QC offer)
Terms and conditions apply. Flytrippers editorial opinion only. HSBC is not responsible for maintaining the content on this site. Please click "Apply Now" to see most up-to-date information.

 

If your income is lower, look at the effective return rate of all the other good offers!

Get one of those because it’s better to pay a 2.5% FX fee when you get such a high earn rate with the welcome bonus! When you’re done unlocking the welcome bonus… start over. It’s really that simple.

Best credit card offers
(September 2023)
WELCOME BONUS
( VALUATION)
Effective
return rate
NEW
TD Aeroplan Visa Infinite Card
Card:
Bonus: spend $7.5k in 12 mos.
Rewards: ≈ $780
Card fee: $0 $139
≈ 10.4% back
on $7,500
& biggest bonus
ends January 3rd
EXCLUSIVE
CIBC Aventura Gold Visa Card
Card:
Bonus: spend $3k in 4 mos.
Rewards: $547
Card fee:
18.2% back
on $3,000
& 4 lounge passes
limited time
EXCLUSIVE
CIBC Aventura Visa Infinite Card
Card:
Bonus: spend $3k in 4 mos.
Rewards: $547
Card fee:
18.2% back
on $3,000
& 4 lounge passes
limited time
American Express Gold Rewards Card
Card:
Bonus: spend $1k/mo for 12 mos.
Rewards: ≈ $1180
Card fee: $250
≈ 7.8% back
on $12,000
& 8 lounge passes
ending
Platinum Card from American Express
Card:
Bonus: spend $7.5k in 3 mos.
Rewards: ≈ $1713
Card fee: $699
≈ 13.5% back
on $7,500
& unlimited lounges
ends September 26th
American Express Cobalt Card
Card:
Bonus: spend $500/mo for 12 mos.
Rewards: ≈ $900
Card fee: $156
≈ 12.4% back
on $6,000
& best overall card
RBC British Airways Visa Infinite Card
Card:
Bonus: spend $6k in 3 mos.
Rewards: ≈ $840
Card fee: $165
≈ 11.3% back
on $6,000
& valuable Avios pts
limited time
Scotiabank Gold American Express Card
Card:
Bonus: spend $7.5k in 1y (or $1k)
Rewards: $775
Card fee: $120
≈ 8.7% back
on $7,500
& simple points
ends October 31st
NEW
TD First Class Travel Visa Infinite Card (excl. QC)
Card:
Bonus: spend $5k in 6 mos.
Rewards: $725
Card fee: $0 $139
≈ 14.5% back
on $5,000
& simple points
ends January 3rd
American Express Aeroplan Card
Card:
Bonus: spend $1k/mo for 10 mos.
Rewards: ≈ $630
Card fee: $120
≈ 5.1% back
on $10,000
& valuable Aeroplan pts
ending
HSBC World Elite Mastercard (non-QC)
Card:
Bonus: spend $1k in 2 mos. (see QC offer)
Rewards: ≈ $418
Card fee: $0 $149
≈ 41.8% back
on $1,000
& flexible rewards
ends September 29th
NEW
RBC Avion Visa Infinite Card
Card:
Bonus: spend $5k in 6 mos.
Rewards: ≈ $900
Card fee: $120
≈ 15.6% back
on $5,000
& valuable Avion pts
ends November 27th
Terms and conditions apply. Flytrippers editorial opinion only. Financial institutions are not responsible for maintaining the content on this site. Please click "See More" to see most up-to-date information.
Best credit card offers
(September 2023)
NEW
TD® Aeroplan® Visa Infinite* Card
TD Aeroplan Visa Infinite Card
Card:
Bonus: spend $7.5k in 12 mos.
WELCOME BONUS
ends January 3rd
Rewards: ≈ $780
Card fee: $0 $139
Effective return rate: ≈ 10.4% back on $7,500
& biggest bonus
EXCLUSIVE
CIBC Aventura® Gold Visa* Card
CIBC Aventura Gold Visa Card
Card:
Bonus: spend $3k in 4 mos.
WELCOME BONUS
limited time
Rewards: $547
Card fee:
Effective return rate: 18.2% back on $3,000
& 4 lounge passes
EXCLUSIVE
CIBC Aventura® Visa Infinite* Card
CIBC Aventura Visa Infinite Card
Card:
Bonus: spend $3k in 4 mos.
WELCOME BONUS
limited time
Rewards: $547
Card fee:
Effective return rate: 18.2% back on $3,000
& 4 lounge passes
American Express® Gold Rewards Card American Express Gold Rewards Card
Card:
Bonus: spend $1k/mo for 12 mos.
WELCOME BONUS
Rewards: ≈ $1180
Card fee: $250
Effective return rate: ≈ 7.8% back on $12,000
& 8 lounge passes
ending
Platinum Card® from American Express
Platinum Card from American Express
Card:
Bonus: spend $7.5k in 3 mos.
WELCOME BONUS
ends September 26th
Rewards: ≈ $1713
Card fee: $699
Effective return rate: ≈ 13.5% back on $7,500
& unlimited lounges
American Express Cobalt® Card American Express Cobalt Card
Card:
Bonus: spend $500/mo for 12 mos.
WELCOME BONUS
Rewards: ≈ $900
Card fee: $156
Effective return rate: ≈ 12.4% back on $6,000
& best overall card
RBC® British Airways Visa Infinite RBC British Airways Visa Infinite Card
Card:
Bonus: spend $6k in 3 mos.
WELCOME BONUS
limited time
Rewards: ≈ $840
Card fee: $165
Effective return rate: ≈ 11.3% back on $6,000
& valuable Avios pts
Scotiabank Gold American Express® Card Scotiabank Gold American Express Card
Card:
Bonus: spend $7.5k in 1y (or $1k)
WELCOME BONUS
ends October 31st
Rewards: $775
Card fee: $120
Effective return rate: ≈ 8.7% back on $7,500
& simple points
NEW
TD First Class Travel® Visa Infinite* Card
TD First Class Travel Visa Infinite Card (excl. QC)
Card:
Bonus: spend $5k in 6 mos.
WELCOME BONUS
ends January 3rd
Rewards: $725
Card fee: $0 $139
Effective return rate: ≈ 14.5% back on $5,000
& simple points
American Express® Aeroplan®* Card American Express Aeroplan Card
Card:
Bonus: spend $1k/mo for 10 mos.
WELCOME BONUS
Rewards: ≈ $630
Card fee: $120
Effective return rate: ≈ 5.1% back on $10,000
& valuable Aeroplan pts
ending
HSBC World Elite® Mastercard®
HSBC World Elite Mastercard (non-QC)
Card:
Bonus: spend $1k in 2 mos. (see QC offer)
WELCOME BONUS
ends September 29th
Rewards: ≈ $418
Card fee: $0 $149
Effective return rate: ≈ 41.8% back on $1,000
& flexible rewards
NEW
RBC Avion Visa Infinite Card
RBC Avion Visa Infinite Card
Card:
Bonus: spend $5k in 6 mos.
WELCOME BONUS
ends November 27th
Rewards: ≈ $900
Card fee: $120
Effective return rate: ≈ 15.6% back on $5,000
& valuable Avion pts
Terms and conditions apply. Flytrippers editorial opinion only. Financial institutions are not responsible for maintaining the content on this site. Please click "See More" to see most up-to-date information.

 

But that said…

Even if you’re maximizing, it’s a good idea to always have at least 1 card with no foreign transaction fees as a backup if you ever have to spend in foreign currency and unfortunately don’t have a welcome bonus to unlock (because you finished it too early, for example, since we recommend spacing out your card application days by at least 2 months).

 

Scenario 2: If you just want to save 2.5%

This scenario is also simple: get one of the 8 credit cards with no foreign transaction fees.

I’ll insert the table again here.

Best credit cards with
no foreign transaction fees
WELCOME BONUS
( VALUATION)
Other
benefit
BEST
HSBC World Elite Mastercard (non-QC)
Card:
Bonus: spend $1k in 2 mos. (see QC offer)
Rewards: ≈ $418
Card fee: $0 $149
Welcome
bonus
is highest Visa/MC
ends September 29th
Scotiabank Passport Visa Infinite Card
Card:
Bonus: spend $1k in 3 mos.
Rewards: $270
Card fee: $150
Airport
lounge access
6 passes
ends October 31st
Scotiabank Gold American Express Card
Card:
Bonus: spend $7.5k in 1y (or $1k)
Rewards: $775
Card fee: $120
Very good
travel insurance
and earn rate
ends October 31st
Scotiabank Platinum American Express Card
Card:
Bonus: spend $3k in 3 mos.
Rewards: $560
Card fee: $399
Airport
lounge access
10 passes
ends October 31st
No fee
Brim Mastercard
Card:
Bonus: no welcome bonus
Rewards: $0
Card fee: $0
No-fee
card
add-on w/ other card
Brim World Elite Mastercard
Card:
Bonus: no welcome bonus
Rewards: $0
Card fee: $0 $199
No minimum
spend
add-on w/ other card
limited time
Home Trust Preferred Visa Card
Card: not available in Québec
Bonus: no welcome bonus
Rewards: $0
Card fee: $0
No minimum
spend
add-on w/ other card
Home Trust Equityline Visa Card
Card: not available in Québec
Bonus: no welcome bonus
Rewards: $0
Card fee: $0
No minimum
spend
add-on w/ other card
Terms and conditions apply. Flytrippers editorial opinion only. Financial institutions are not responsible for maintaining the content on this site. Please click "See More" to see most up-to-date information.
Best credit cards with
no foreign transaction fees
BEST
HSBC World Elite® Mastercard®
HSBC World Elite Mastercard (non-QC)
Card:
Bonus: spend $1k in 2 mos. (see QC offer)
WELCOME BONUS
ends September 29th
Rewards: ≈ $418
Card fee: $0 $149
Other benefit: Welcome bonus
is highest Visa/MC
Scotiabank Passport® Visa Infinite* Card Scotiabank Passport Visa Infinite Card
Card:
Bonus: spend $1k in 3 mos.
WELCOME BONUS
ends October 31st
Rewards: $270
Card fee: $150
Other benefit: Airport lounge access
6 passes
Scotiabank Gold American Express® Card Scotiabank Gold American Express Card
Card:
Bonus: spend $7.5k in 1y (or $1k)
WELCOME BONUS
ends October 31st
Rewards: $775
Card fee: $120
Other benefit: Very good travel insurance
and earn rate
Scotiabank Platinum American Express® Card Scotiabank Platinum American Express Card
Card:
Bonus: spend $3k in 3 mos.
WELCOME BONUS
ends October 31st
Rewards: $560
Card fee: $399
Other benefit: Airport lounge access
10 passes
No fee
Brim Mastercard
Brim Mastercard
Card:
Bonus: no welcome bonus
WELCOME BONUS
Rewards: $0
Card fee: $0
Other benefit: No-fee card
add-on w/ other card
Brim World Elite Mastercard Brim World Elite Mastercard
Card:
Bonus: no welcome bonus
WELCOME BONUS
limited time
Rewards: $0
Card fee: $0 $199
Other benefit: No minimum spend
add-on w/ other card
Home Trust Preferred Visa Card Home Trust Preferred Visa Card
Card: not available in Québec
Bonus: no welcome bonus
WELCOME BONUS
Rewards: $0
Card fee: $0
Other benefit: No minimum spend
add-on w/ other card
Home Trust Equityline Visa Card Home Trust Equityline Visa Card
Card: not available in Québec
Bonus: no welcome bonus
WELCOME BONUS
Rewards: $0
Card fee: $0
Other benefit: No minimum spend
add-on w/ other card
Terms and conditions apply. Flytrippers editorial opinion only. Financial institutions are not responsible for maintaining the content on this site. Please click "See More" to see most up-to-date information.

 

I’ll tell you the benefits of each in card pairs, but many often ask us for concrete tips on how to elaborate their strategy for travel rewards to plan well, so I’m also including that for the FX fee angle for those who don’t want to aim higher with Scenario 1.

 

HSBC World Elite Mastercard and Scotia Passport Visa Infinite Card

These 2 are the best, but they have a minimum income requirement. They have a welcome bonus that will give you a nice profit.

If you earn $60,000 (but not $80,000), your only option is the Scotia Passport Visa Infinite Card. If you earn $80,000, you can also choose the HSBC World Elite Mastercard.

The HSBC World Elite Mastercard is by far the best of the 2 (the net fee is just $49 per year because it comes with a $100 annual travel credit that can easily be cashed out from the 1st month). Especially as the Scotia Passport Visa Infinite Card currently has an almost laughably low welcome bonus offer.

The Scotia Passport Visa Infinite Card comes with 6 airport lounge passes worldwide though.

Normally, for travelers who want to maximize, this isn’t so relevant because it’s so easy to get free airport lounge access with all the other cards that offer free access AND a welcome bonus on top of that. But it can tip the balance if you don’t want a lot of rewards and want to it to be simple.

 

Scotiabank American Express Cards

For those who earn less, there’s the Scotiabank Gold Amex Card and Scotiabank Platinum Amex Card, which have no minimum income requirement.

These are excellent cards, but just not for the foreign transaction fee component. In fact, they’re great for avoiding FX fees if you’re traveling in the USA. It’s just that outside Canada and the USA, acceptance of American Express cards is much lower. But for snowbirds, for example, it can be handy.

Note that the excellent 5 pts/$ multiplier on the Scotiabank Gold Amex Card only applies in Canada, while other FX no-fee cards have no such restrictions.

 

Brim cards

Then there are the 2 Brim cards that are lesser known, because it’s a fairly new digital bank.

At the very least, get the Brim Mastercard, which has no annual fee. It’s the best no-annual-fee no-foreign-transaction-fee card in Canada.

As long as you add it as a 2nd card on the same day you apply for one with a welcome bonus! Otherwise, Scenario 3 with prepaid cards may even be more interesting, because by getting a card with no welcome bonus, you’re completely wasting an opportunity to get a card that has a welcome bonus of ≈ $941 for example!

That’s an expensive way to save 2.5%…

Because all no-annual-fee cards always necessarily have a very terrible welcome bonus. In fact, it’s worse than terrible: there’s just no welcome bonus with this card.

But it’s pretty much the only situation where we’d recommend a no-annual-fee card, to save 2.5% on traveling if you add it at the same time you get a better one (you have no fee to pay and no minimum spending requirement since there’s no bonus).

The Brim World Elite Mastercard is the higher-end version that has the 1st year free, so if you have $80,000 in income, you can get that one instead of the no-fee version. That way, you’ll enjoy the benefits of the 1st year (2 times more earning) and simply downgrade at renewal. It doesn’t have a welcome bonus either, but it has better insurance too.

 

Home Trust cards

If you live in provinces other than Québec, the Home Trust Preferred Visa Card and the Home Trust Equityline Visa Card can be alternatives to the Brim Mastercard in terms of no-annual-fee no-FX-fee cards.

 

Scenario 3: If you just want to save 2.5% without credit

This scenario is an interesting alternative: there are prepaid cards that do not charge a foreign transaction fee.

These are not credit cards, but they have some of the benefits of credit cards AND debit cards. You must load money on them to be able to spend that money after.

Prepaid cards are usually not recommended at all, except:

  • As an alternative to the no-annual-fee cards like the Brim Mastercard
    • If you were going to get that one alone and waste an application for that
    • That way you’ll instead be able to get a credit card with a good bonus
    • And you’ll still have an option to save on FX fees
    • In fact, there’s no reason not to get a prepaid card
    • These are free and don’t count as a credit application
  • For those who have bad credit
    • To avoid FX fees without making a credit application
    • No risk of spenfing too much for those who don’t use credit well
    • But you still get some benefits and rewards
    • It’s infinitely better than paying by debit

There are 2 prepaid cards that are interesting (just 1 if you live in Québec).

 

EQ Bank card

The EQ Bank Prepaid Mastercard is an absolute must-have if you don’t live in Québec.

It’s by far the best prepaid card in Canada (the bar is low and credit cards are obviously better, but still).

It has no foreign transaction fees and is completely free, with no credit application. Really a no-brainer.

You’ll also earn 3% in interest on the money you load on the card, which is a lot better than the interest you earn with traditional bank accounts. And again: it’s free!

You’ll also earn cashback rewards, another thing debit cards obviously don’t give you.

I’ll do a separate post about prepaid cards and savings accounts, but please at a minimum in the meantime, at least stop using a debit card. It’s so bad for you compared to prepaid cards that have no fees or risks (and eventually aim to get good enough with credit to get the even better benefits and rewards with real credit cards).

 

KOHO Card

The KOHO Prepaid Mastercard itself is completely free.

But if you add the Extra plan, you won’t have any foreign transaction fees by using this prepaid card.

The Extra plan costs just $9 per month and you can add it just for the months when you’ll be traveling for example, so it’s not very expensive to avoid FX fees.

But I really would only recommend it as no-FX-fee card if you live in Québec and can’t get the EQ Bank Prepaid Mastercard. The KOHO Prepaid Mastercard does have a great credit-building feature though, I’ll share a post about that soon.

 

Bonus: Wise Card

Flytrippers loves giving you more for your money, so we’ll add this bonus.

The Wise Card is another card that isn’t a credit card and that everyone should have! So I’ll do this quick teaser of our much-anticipated article on withdrawing cash while traveling.

The Wise Card isn’t for purchases in foreign currencies, but rather for cash withdrawals at ATMs. It’s not a prepaid card per se, it’s actually just a better debit card (prepaid cards and debit cards work in a very similar way).

Ideally you should always pay everything with a credit card obviously, even when traveling. But you probably know that some countries are still very archaic with plenty of places where the only option is to pay with cash as if we were still in 1999.

The Wise Card does not charge foreign transaction fees on ATM withdrawals and does not charge any withdrawal fees either (almost all Canadian bank account debit cards do obviously).

Get it for sure! It’s not a credit card, so there’s no impact! It’s free! No reason not to have it.

You do, however, have a limit on free withdrawals:

  • Maximum of 2 withdrawals per month
  • Maximum of C$350 total per month

That’s better than nothing!

I’ll do a detailed article on cash withdrawals specifically for other tips, this one is getting long.

 

Want to get more lesser-known pro tips?

Sign up for our travel rewards newsletter

 

Summary

The 2.5% foreign transaction fee is a sneaky charge that you should stop paying (unless you’re always using a credit card on which you’re unlocking a big welcome bonus). There aren’t many no-foreign-transaction-fee credit cards in Canada, but the HSBC World Elite Mastercard is one of them, and has an increased offer until September 29.

What would you like to know about foreign transaction fees? Tell us in the comments below.

 

See the deals we spot: Cheap flights

Explore awesome destinations: Travel inspiration

Learn pro tricks: Travel tips

Discover free travel: Travel rewards

 

Featured image: New York (photo credit: Ryan Gerrard)

 

Share this post to help us help more people travel more for less:

Andrew D'Amours

Andrew is the co-founder of Flytrippers. He is passionate about traveling the world but also, as a former management consultant, about the travel industry itself. He shares his experiences to help you save money on travel. As a very cost-conscious traveler, he loves finding deals and getting free travel thanks to travel rewards points... to help him visit every country in the world (current count: 64/193 Countries, 47/50 US States & 9/10 Canadian Provinces).

Leave a Reply