7 Best No Foreign Transaction Fee Credit Cards in Canada for 2025
Have you ever looked at your credit card bills after returning home from a trip abroad and been shocked at how much each purchase actually cost you? Or ordered something online from an American retailer that turned out to be more expensive than you expected? It’s not that the exchange rate is worse than you thought — your credit card issuer likely added a foreign transaction fee, or FX fee, to the purchase.
Best ‘no foreign transaction fee’ credit cards
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Should I use a U.S. dollar credit card?
If the majority of your purchases are in American dollars, a credit card that lets you transact in USD may be more beneficial than a no FX fee card. For example, cards like the BMO U.S. Dollar Mastercard and RBC U.S. Dollar Visa Gold let you make purchases in USD so you can avoid currency conversion and foreign exchange fees.
That said, you’ll need to consider how you’ll pay your monthly credit card bills. A U.S. dollar credit card may require you to pay your bill in USD. If you don’t have a steady stream of U.S. income, you’ll need to convert your Canadian dollars to USD before you can pay your bills, which will likely result in FX fees.
Frequently asked questions
What is a foreign transaction fee?
What is a foreign transaction fee?
When you buy something that’s not in Canadian dollars using your credit card, issuers often charge a foreign transaction fee for the transaction — typically around 2.5% of the purchase price. You may not have noticed it before, since it’s rolled into the total charge that shows up on your statement.
What are Visa and Mastercard exchange rate markups?
What are Visa and Mastercard exchange rate markups?
In addition to the transaction fee charged by the issuer, credit card networks typically markup the cost of converting money. For example, the Bank of Canada may list the exchange rate from USD to CAD as 1.35 (for every $1 USD you spend abroad, it costs you $1.35 CAD). But when you use your credit card, the network (e.g., Visa) may use a slightly marked-up rate of 1.36, so for every $1 USD you spend, it actually costs $1.36 CAD.
You can use these calculators from Visa and Mastercard to estimate your total transaction costs. American Express does not post conversion markups for Canada publicly.
How does dynamic currency conversion work?
How does dynamic currency conversion work?
Some merchants allow you to choose between the local currency or your home currency when conducting a transaction, which is known as dynamic currency conversion, or DCC. If you choose to pay in CAD while abroad, you’ll pay the exchange rate set by the merchant at that moment, which can be considerably higher than the standard rate. If you opt to pay in the local currency, the currency conversion is handled by your financial institution, typically resulting in a more competitive rate.
How can I calculate foreign transaction fees?
How can I calculate foreign transaction fees?
Most credit cards charge a foreign transaction fee of around 2.5%. Check your credit card terms and conditions for the specific fee you’ll be charged.
To calculate how much you’re paying in FX fees:
Convert the amount you’re spending to Canadian dollars using the most up-to-date exchange rate. (If you want a more accurate calculation, you can use the currency exchange rate issued by your credit card network).
Divide that figure by 100.
Multiply it by the transaction fee.
For example, let’s say you’re visiting the United States and you want to pay for a meal that costs $50 USD, and your card’s foreign transaction fee is 2.5%. Assuming your credit card’s network’s current exchange rate for USD to CAD is 1.35, here is how the calculation works out:
$50.00 USD x 1.35 = $67.50 CAD
$67.50 / 100 = $0.675
$0.675 x 2.5 = $1.69
The foreign transaction fee for this purchase would be $1.69. And your total would be $69.19 CAD.
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Shannon Terrell
Shannon Terrell
Shannon Terrell