Oftentimes, we select Canadian dollars because we think it just makes things easier. Oftentimes, when shopping abroad, once you swipe your credit card you will be asked if you would like to pay in the local currency or in Canadian dollars. However, another handy tip to keep in mind is t0 be mindful of what currency you choose to pay in. What are some other tips to avoid extra credit card fees when travelling?Īpplying for a credit card with no foreign exchange fees will be a big help on cutting down on extra fees when you travel. If you choose to pay in Canadian dollars, it won’t come into effect. The purchase has to be made in a foreign currency. It’s not an automatic 2.5% off your bill when you shop abroad. Keep in mind that credit cards with no foreign exchange fees only waive the foreign exchange fee when applicable. So do some research to figure out what option would be the best fit for your wallet.
There are plenty of credit cards that offer this perk ranging from popular travel credit cards to no annual fee credit cards. If you are someone who shops a lot online on websites that charge in USD (or a different currency) or you are a frequent traveller, then it’s worth your time to look into getting a credit card with no foreign transaction fees. While the majority of Canadian credit cards include foreign transaction fees, there are a number of credit card options that waive these charges as one of their perks/benefits. How can I avoid paying foreign transaction fees? But that’s not the case since you need to account for the fees.
If you’re not familiar with foreign transaction fees, you might assume that you’ll get the rates that you see on an exchange app or website like xe.com. E.g., American Express, Visa, Mastercard. You will be charged the exchange as set by the card issuer. So, say you are travelling in France and use your credit card to book a night at a hotel in Paris. It is important to note that you will have the pay the foreign transaction fee on top of the exchange rate. Is the foreign transaction fee different than the exchange rate? Especially if you are travelling for a long period of time or making an expensive purchase. While that may not seem like a lot, it can add up pretty quickly. It’s also worth noting that some Canadian banks charge as much as 3.5% fee when you use foreign ATMs to withdraw cash. So, for every $100 spent, you will pay an additional $2.50 in foreign transaction fees.
The rate of the foreign transaction fee is 2.5% on Canadian credit cards. So, as mentioned above, this can be when you are travelling and use your credit card while shopping or making a purchase abroad as well as from shopping online when paying in a different currency. So, what exactly is a foreign transaction fee and how does it work? The foreign transaction fee is an additional fee on any purchase made in a foreign currency. Yes, the exchange rate will play a role, however, many people often don’t realize is that they are also paying a foreign transaction fee when they use their credit card. Most people will chalk it up to currency exchange rates, but there is more to it than that. Have you ever made a purchase while travelling to a foreign country or even when shopping online on an American website and noticed that, when you got your credit card statement, the charge was higher than you had expected?
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