Credit cards with no foreign transaction fee: what to check
Every purchase in a foreign currency goes through a conversion, and most cards add a fee on top. A few catalogue cards state that they charge none: here is how to judge whether the saving beats their annual fee.
In this guide
What foreign transaction fees are
When a purchase is billed in a foreign currency, the payment network converts the amount into Canadian dollars, then most issuers add a foreign transaction fee as a percentage of the purchase. The exact rate is published in each card’s terms; it is not always documented in the catalogue, and Carte IQ never invents one.
These fees apply to travel, but also to online purchases billed in US dollars or euros, and to some subscriptions.
The catalogue cards that state the benefit
At the last review, three catalogue card pages officially publish the “no foreign transaction fee” benefit:
- Scotiabank Gold American Express Card — $120 annual fee;
- Scotiabank Passport Visa Infinite Card — $150 annual fee;
- Scotiabank Platinum American Express Card — $399 annual fee.
The annual fees above are those of the catalogue at the review date. Each card page details its rewards, caps and verified welcome terms.
When the benefit is worth it
The saving is simple to compute: your annual foreign-currency purchases multiplied by the fee rate your current card charges. If that saving, added to the card’s rewards, exceeds its annual fee and what you would have earned with another card on the same spending, the benefit is worth it. Otherwise a no-fee card often remains the better choice, conversion fees included.
The Carte IQ questionnaire asks for your annual foreign-currency spending precisely to make that comparison with your amounts, not with an average.
Check before applying
- The foreign transaction fee rate of your current card, in its terms.
- The network of the card you are considering: American Express is not accepted everywhere abroad; a backup Visa or Mastercard stays useful.
- The travel insurance documented on the card page, which is part of a travel card’s real value.
- The best cards for foreign currency ranking, calculated on a published scenario.
Frequently asked questions
Do foreign transaction fees apply to online purchases?
Yes, as soon as the merchant bills in a currency other than the Canadian dollar, even from Canada. The exact fee rate is in each card’s terms.
Is a no-foreign-fee card always worth it?
No. The saving depends on how much you spend in foreign currencies each year; the card’s annual fee must be compared with that saving and with the rewards lost or gained elsewhere.
How does Carte IQ account for foreign currency?
The questionnaire asks for your annual foreign-currency spending. The calculated strategy includes that amount when the card’s data allows it, without ever inventing a fee rate.