Avoiding Foreign Transaction Fees

A foreign transaction fee (also called a forex or FX fee) is a percentage charged by the card issuer when you make a purchase in a currency other than Canadian dollars. In Canada, 2.5% is the norm on most Visa and Mastercard products.

When you pay it: - Using your card abroad (e.g. euros in France, USD in the US) - Buying from foreign websites that charge in USD, GBP, etc. - Streaming or software subscriptions billed in USD - Some ATM withdrawals in foreign currency

How it's applied: The fee is usually 2.5% of the Canadian-dollar equivalent after the exchange rate is applied. So a $100 USD purchase might cost you roughly $135 CAD + 2.5% ≈ $138.38 CAD instead of ~$135 CAD with a no-FX-fee card.

Who sets it: The fee is set by the card issuer (bank), not Visa or Mastercard. Some issuers waive it on specific cards to attract travellers and cross-border shoppers.

Scotiabank Many Scotiabank credit cards waive the 2.5% FX fee, including: - Scotiabank Passport Visa Infinite - Scotiabank Gold American Express (when used on Amex network) - Other Scotiabank travel or premium cards—confirm on their site

Rogers World Elite Mastercard - No annual fee - 0% FX fee on USD purchases (you actually earn a small rebate on USD, effectively making USD spend slightly rewarding) - On other foreign currencies, check current terms; historically still favourable

Other options - Some credit unions and smaller issuers offer no-FX-fee cards - American Express Canada cards often have no or lower FX fees; check each product - Premium cards (e.g. Amex Platinum) typically waive FX fees

Always confirm current terms on the issuer's website before travelling or making large foreign-currency purchases.

Example 1: You spend $3,000 CAD equivalent on a trip to the US (hotels, meals, attractions). - With 2.5% FX fee: $3,000 × 1.025 = $3,075 (about $75 in fees) - With no-FX-fee card: $3,000 (save $75)

Example 2: You spend $200/month on US subscriptions and online shopping ($2,400/year). - With 2.5% fee: ~$60/year in fees - With no-FX-fee card: $0 in FX fees

Example 3: Rogers World Elite on USD. If the card gives a small rebate on USD (e.g. net positive vs. 2.5% fee), you effectively "save" 2.5%+ on every USD purchase compared to a standard card. On $5,000 USD/year that's $125+ in your favour.

Takeaway: If you travel or spend in foreign currency regularly, a no-FX-fee card can save $100–$500+ per year.

Always pay in local currency when the terminal or website offers a choice ("Charge in CAD or USD?"). If you choose CAD, the merchant or their processor sets the rate—often worse than your card's rate. Let your card do the conversion in the local currency.

Notify your bank of travel plans to reduce the chance of declined transactions. Many banks let you set travel notices online.

Carry a backup card in case one is lost or blocked. Ideally one Visa and one Mastercard, and at least one with no FX fee.

Check ATM fees separately: No-FX-fee applies to purchases. ATM cash advances may still have FX markup plus cash advance fees and interest—avoid using credit for cash abroad unless necessary.