Making purchases abroad can be expensive. The best foreign exchange credit cards save you money by reducing hidden fees common in international transactions.
There are two factors that determine how much your Canadian credit card is charged when you make a purchase in a foreign currency:
- The daily currency exchange rate set by your card processor, e.g., Mastercard, Visa or American Express. This is the difference between the value of the Canadian dollar and the value of a foreign currency on any given day.
- The foreign transaction fee charged by your card issuer, e.g., RBC or TD. You might not always notice these fees on your credit card statement, as many issuers automatically include them in the purchase amounts charged to the card, rather than listing the fees as separate line items.
Does one card processor offer lower exchange rates than the other? How do the exchange rates and foreign transaction fees affect your bottom line in the long run?
Visa, Mastercard and Amex exchange rates compared
To figure out who charges the lowest fees, we looked at the exchange rates posted by Visa and Mastercard. The American Express exchange rate is no longer made public, so for the purposes of this article, we’ve given estimated rates based on past precedent and reports from Amex cardholders.
The Bank of Canada’s exchange rate is listed as a point of reference to indicate how much each processor marks up the exchange rate. Figures are averaged from daily exchange rates between November 22, 2022 to November 29, 2022.
Providers | `1 US Dollar (USD) | 1 Euro (EUR) | 1 pound sterling (GBP) |
---|---|---|---|
Bank of Canada | 1.3578 CAD | 1.4043 CAD | 1.6262 CAD |
Visa | 1.3778 CAD | 1.4368 CAD | 1.6620 CAD |
Mastercard | 1.3911 CAD | 1.4402 CAD | 1.6688 CAD |
American Express | 1.3581 CAD (estimate) | 1.4044 CAD (estimate) | 1.6258 CAD (estimate) |
Based on the data we pulled for these three currencies, the Mastercard exchange rate is the highest and the American Express exchange rate is the lowest; estimated rates for Visa sit between the two.
But ultimately the differences between the three are quite marginal. All three card processors do charge a slight markup compared to the Bank of Canada’s, with Mastercard’s markup the highest at between 2.45% to 2.61%, depending on the currency exchanged.
Are you getting the best currency exchange rate possible?
Although the exchange rate fluctuates daily, the markup that Visa, Mastercard and American Express charge compared to the Bank of Canada rate appears to be fairly consistent.
Based on the straight math, you would pay the least exchange fees with American Express, but it’s pretty minimal and likely won’t make a huge difference unless you’re charging $10,000+ USD to your credit card.
That being said, if you were to compare what you’re charged by your credit card provider to what banks or foreign exchange offices will charge you for exchanging currency, you’re likely getting the best rates by using your credit cards.
Banks and exchange offices set their own individual rates and the markup can be quite high depending on the currency you’re getting. Generally speaking, if you’re trying to get USD from your bank, the rates will be comparable to what your credit card charges, but if you need a currency that’s not commonly held such as the Turkish lira or Brazilian real, there could be a markup of up to 10%!
Other ways to save on foreign currency purchases
1. ‘No foreign transaction fee’ credit cards
Since the exchange rate differences between Visa, Mastercard and American Express are relatively minor, the best strategy for saving money on purchases in foreign currencies is using a credit card that doesn’t charge foreign transaction fees. These cards waive the usual 2.5% exchange fee or give you cash back on your foreign purchases, which can make up for the fees.
We’ve highlighted a few popular picks below, but be sure to check out our full list of the best credit cards with no foreign transaction fees for more options.
up to $1,300* value
Welcome Bonus
$926
First Year Value
$0
Annual Value
Welcome Bonus: Earn up to $1,300* in value in the first 12 months, including up to 40,000 bonus Scene+ points* Expires Jul 01, 2025
Get this card if you...
Annual Fee & Annual Interest Rates
$150
Annual Fee
20.99%
Purchase
22.99%
Cash Advance
22.99%
Balance Transfer
-
Our Take
Scotiabank Passport® Visa Infinite* Card ReviewThe Scotiabank Passport® Visa Infinite* Card is a travel rewards credit card offering elevated Scene+ points on eligible grocery store purchases, dining, entertainment, and daily transit, with a standard earn rate on all other purchases. Cardholders benefit from no foreign transaction fees, six complimentary airport lounge visits per year through the Visa Airport Companion Program, and comprehensive travel insurance.
Eligibility
Excellent (740+)
Recommended Credit Score
$60,000
Required Annual Personal Income
$100,000
Required Annual Household Income
-
Pros
Cons
-
-
Annual Interest Rates
20.99%
Purchase
22.99%
Cash Advance
22.99%
Balance Transfer
Fees
$150
Annual Fee
$0
Foreign Transaction
5.00%
Balance Transfer
$5
Cash Advance
-
Rewards Scene+
3x
Scene+ points¹ on every $1 you spend at Sobeys, Safeway, IGA, Foodland and participating Co-ops and more
2x
Scene+ points¹ for every $1 you spend on other eligible grocery stores, dining, eligible entertainment purchases and eligible daily transit options (including ride shares, buses, subways, taxis and more)
4x
Scene+ points for every dollar you spend on hotel bookings, car rentals, and things to do with Scene+ Travel, Powered by Expedia
1x
Scene+ point for every $1 spent on all other eligible everyday purchases
Insurance Benefits
$2,000,000
Emergency medical insurance amount
$3
Emergency medical insurance over 65 days
$500,000
Travel accident insurance amount
$1,000
Hotel burglary insurance
$65,000
Rental car insurance amount
-
Earn up to $1,300 in value in the first 12 months, including up to 40,000 bonus Scene+ points*.
$300 in travel rewards (30,000 bonus Scene+ points) for new Scotiabank Passport Visa Infinite Card clients who spend $2,000 within the first 3 months;
$100 in travel rewards (10,000 bonus Scene+ points) when you spend $40,000 annually on your Account each year (12-months);
$50 supplementary card annual fee waiver on the first supplementary card for new Scotiabank Passport Visa Infinite Card clients;
$137 in foreign transaction fee savings based on average first year annual foreign spend per account (save the 2.5% foreign transaction fee markup typically charged by othercard issuers);
$399 in first year point earn potential (30,000 Scene+ points) on everyday purchases based on average annual spend per account with an average spend of 20% in 2X accelerator categories;
$359 value with a complimentary Visa Airport Companion Program Membership that includes 6 lounge passes (based on ‘Preferential’ membership valued at approx. CAD$359/USD$259). Currency conversion as at October 25, 2024.
Potential First Year Value = up to $1,345
Our Take
The Scotiabank Passport® Visa Infinite* Card is a travel rewards credit card offering elevated Scene+ points on eligible grocery store purchases, dining, entertainment, and daily transit, with a standard earn rate on all other purchases. Cardholders benefit from no foreign transaction fees, six complimentary airport lounge visits per year through the Visa Airport Companion Program, and comprehensive travel insurance.
Eligibility
Excellent (740+)
Recommended Credit Score
$60,000
Required Annual Personal Income
$100,000
Required Annual Household Income
Pros
Cons
Annual Interest Rates
20.99%
Purchase
22.99%
Cash Advance
22.99%
Balance Transfer
Fees
$150
Annual Fee
$0
Foreign Transaction
5.00%
Balance Transfer
$5
Cash Advance
Rewards Scene+
3x
Scene+ points¹ on every $1 you spend at Sobeys, Safeway, IGA, Foodland and participating Co-ops and more
2x
Scene+ points¹ for every $1 you spend on other eligible grocery stores, dining, eligible entertainment purchases and eligible daily transit options (including ride shares, buses, subways, taxis and more)
4x
Scene+ points for every dollar you spend on hotel bookings, car rentals, and things to do with Scene+ Travel, Powered by Expedia
1x
Scene+ point for every $1 spent on all other eligible everyday purchases
Insurance Benefits
$2,000,000
Emergency medical insurance amount
$3
Emergency medical insurance over 65 days
$500,000
Travel accident insurance amount
$1,000
Hotel burglary insurance
$65,000
Rental car insurance amount
Earn up to $1,300 in value in the first 12 months, including up to 40,000 bonus Scene+ points*.
Potential First Year Value = up to $1,345 |
$216
First Year Value
$0
Annual Value
Get this card if you...
Annual Fee & Annual Interest Rates
$0
Annual Fee
21.99%
Purchase
21.99%
Cash Advance
21.99%
Balance Transfer
-
Our Take
Home Trust Preferred Visa* ReviewThe Home Trust Preferred Visa is a no-annual-fee credit card that offers cash back on all eligible purchases, with no maximum cash back cap. It also waives foreign transaction fees, making it advantageous for international purchases; however, cash back is not earned on transactions in foreign currencies, and the card is not available to residents of Quebec.
Eligibility
Good (620 - 670)
Recommended Credit Score
$15,000
Required Annual Personal Income
-
Pros
Cons
-
-
Annual Interest Rates
21.99%
Purchase
21.99%
Cash Advance
21.99%
Balance Transfer
Fees
$0
Annual Fee
$0
Foreign Transaction
-
Rewards cash back
1%
Earn 1% cash back on all purchases with no cap.
Insurance Benefits
$65,000
Rental car insurance amount
Our Take
The Home Trust Preferred Visa is a no-annual-fee credit card that offers cash back on all eligible purchases, with no maximum cash back cap. It also waives foreign transaction fees, making it advantageous for international purchases; however, cash back is not earned on transactions in foreign currencies, and the card is not available to residents of Quebec.
Eligibility
Good (620 - 670)
Recommended Credit Score
$15,000
Required Annual Personal Income
Pros
Cons
Annual Interest Rates
21.99%
Purchase
21.99%
Cash Advance
21.99%
Balance Transfer
Fees
$0
Annual Fee
$0
Foreign Transaction
Rewards cash back
1%
Earn 1% cash back on all purchases with no cap.
Insurance Benefits
$65,000
Rental car insurance amount
$349
First Year Value
$289
Annual Value
Get this card if you...
Annual Fee & Annual Interest Rates
$0
Annual Fee
20.99%
Purchase
22.99%
Cash Advance
22.99%
Balance Transfer
-
Our Take
Rogers Red World Elite® Mastercard® ReviewThe Rogers™ World Elite® Mastercard® is a no-annual-fee credit card offering elevated cash back rates on purchases made in U.S. dollars, with a standard rate on all other eligible purchases. Cardholders benefit from comprehensive insurance coverage, including emergency medical and rental car collision/damage protection, as well as access to over 1,300 airport lounges worldwide through Mastercard Travel Pass provided by DragonPass; however, the card has a high income requirement.
Eligibility
Excellent (740+)
Recommended Credit Score
$80,000
Required Annual Personal Income
$150,000
Required Annual Household Income
-
Pros
Cons
-
-
Annual Interest Rates
20.99%
Purchase
22.99%
Cash Advance
22.99%
Balance Transfer
Fees
$0
Annual Fee
$2.5
Foreign Transaction
3.00%
Balance Transfer
-
Rewards cash back
3%
Earn 3% unlimited cash back on purchases made in US dollars
2%
Earn 2% unlimited cash back on all eligible non-US dollar purchases if you have 1 qualifying service with Rogers, Fido or Shaw
1.5%
Earn 1.5% unlimited cash back on everything else
1.5x Cash Back
Get 1.5x more cash back every time you redeem for Rogers, Fido or Shaw purchases
Insurance Benefits
$1,000,000
Emergency medical insurance amount
$3
Emergency medical insurance over 65 days
$65,000
Rental car insurance amount
Our Take
The Rogers™ World Elite® Mastercard® is a no-annual-fee credit card offering elevated cash back rates on purchases made in U.S. dollars, with a standard rate on all other eligible purchases. Cardholders benefit from comprehensive insurance coverage, including emergency medical and rental car collision/damage protection, as well as access to over 1,300 airport lounges worldwide through Mastercard Travel Pass provided by DragonPass; however, the card has a high income requirement.
Eligibility
Excellent (740+)
Recommended Credit Score
$80,000
Required Annual Personal Income
$150,000
Required Annual Household Income
Pros
Cons
Annual Interest Rates
20.99%
Purchase
22.99%
Cash Advance
22.99%
Balance Transfer
Fees
$0
Annual Fee
$2.5
Foreign Transaction
3.00%
Balance Transfer
Rewards cash back
3%
Earn 3% unlimited cash back on purchases made in US dollars
2%
Earn 2% unlimited cash back on all eligible non-US dollar purchases if you have 1 qualifying service with Rogers, Fido or Shaw
1.5%
Earn 1.5% unlimited cash back on everything else
1.5x Cash Back
Get 1.5x more cash back every time you redeem for Rogers, Fido or Shaw purchases
Insurance Benefits
$1,000,000
Emergency medical insurance amount
$3
Emergency medical insurance over 65 days
$65,000
Rental car insurance amount
2. Prepaid cards
With prepaid cards, you can load your credit card in advance with funds rather than buying on credit and repaying the charges later. Some prepaid cards don’t charge foreign transaction fees and might offer higher cash back rates on foreign purchases than regular credit cards.
Other prepaid cards allow you to preload foreign currency onto your card, which voids the need for foreign exchange altogether. This is advantageous since you’ll know exactly what rate you’re paying, and you can take advantage of any dips in the exchange rate.
Read: Best prepaid cards in Canada
$20 sign-up bonus
Welcome Bonus
$0
First Year Value
$0
Annual Value
Welcome Bonus: Get 30 days of free trial for any KOHO plan. Get a $20 sign-up bonus on your first $20 transaction.
Annual Fee & Annual Interest Rates
$144
Annual Fee
-
Our Take
KOHO Extra Mastercard® Prepaid Card ReviewThe KOHO Extra Prepaid Mastercard® is a premium prepaid card offering enhanced cash back rates on categories such as groceries, dining and transportation, along with a competitive interest rate on account balances. Additional benefits include no foreign transaction fees, complimentary financial coaching, and access to credit-building programs, making it a suitable option for individuals seeking to optimize rewards and financial management without a traditional credit card.
Eligibility
Poor (up to 299)
Recommended Credit Score
$0
Required Annual Personal Income
$0
Required Annual Household Income
-
Pros
Cons
-
-
Fees
$144
Annual Fee
$0
Foreign Transaction
-
Rewards cash back
1.5%
cash back on groceries, transportation, food, and drink
0.25%
cash back on all other purchases
50%
extra cash back from select merchants.
3%
interest on both your spending and savings account
$7
Grow your credit up to 22 points in 3 months with Credit Building for $7 / month instead of $10
-
Get a 30-day free trial for any KOHO plan. Get a $20 sign-up bonus on your first $20 transaction.
Only the users who successfully register a new KOHO account and make their first $20 purchase using their KOHO card within 30 days of registration are eligible for the offer and may claim the one-time $20 bonus in their KOHO account. This offer is non-transferable and may only be used once per person. Offer is not applicable in conjunction with other KOHO offers or promotions. KOHO may, at its sole discretion, suspend, terminate or change the terms and requirements of the offer.
Our Take
The KOHO Extra Prepaid Mastercard® is a premium prepaid card offering enhanced cash back rates on categories such as groceries, dining and transportation, along with a competitive interest rate on account balances. Additional benefits include no foreign transaction fees, complimentary financial coaching, and access to credit-building programs, making it a suitable option for individuals seeking to optimize rewards and financial management without a traditional credit card.
Eligibility
Poor (up to 299)
Recommended Credit Score
$0
Required Annual Personal Income
$0
Required Annual Household Income
Pros
Cons
Fees
$144
Annual Fee
$0
Foreign Transaction
Rewards cash back
1.5%
cash back on groceries, transportation, food, and drink
0.25%
cash back on all other purchases
50%
extra cash back from select merchants.
3%
interest on both your spending and savings account
$7
Grow your credit up to 22 points in 3 months with Credit Building for $7 / month instead of $10
Get a 30-day free trial for any KOHO plan. Get a $20 sign-up bonus on your first $20 transaction.
Only the users who successfully register a new KOHO account and make their first $20 purchase using their KOHO card within 30 days of registration are eligible for the offer and may claim the one-time $20 bonus in their KOHO account. This offer is non-transferable and may only be used once per person. Offer is not applicable in conjunction with other KOHO offers or promotions. KOHO may, at its sole discretion, suspend, terminate or change the terms and requirements of the offer.
3. USD Cards
USD credit cards can be useful for those who make frequent trips to the U.S. or make many purchases in U.S. dollars. Since the card has USD as the base currency, you don’t get charged any additional fees when you charge a purchase in USD. However, when it comes time to pay your bills, you’ll need to have USD available, otherwise, you pay a conversion fee when paying your bill with Canadian dollars.
$0
First Year Value
$0
Annual Value
Get this card if you...
Annual Fee & Annual Interest Rates
$49
Annual Fee
21.99%
Purchase
23.99%
Cash Advance
23.99%
Balance Transfer
-
Our Take
BMO U.S. Dollar Mastercard®* ReviewThe BMO U.S. Dollar Mastercard®* is designed for Canadians who frequently make purchases in U.S. dollars, allowing them to avoid foreign transaction fees by billing transactions directly in USD. Cardholders benefit from purchase protection and extended warranty coverage; however, balances must be paid in U.S. dollars, and the card does not offer a rewards program.
Eligibility
Very Good (671 - 739)
Recommended Credit Score
$15,000
Required Annual Personal Income
-
Pros
Cons
-
-
Annual Interest Rates
21.99%
Purchase
23.99%
Cash Advance
23.99%
Balance Transfer
Fees
$49
Annual Fee
$0
Foreign Transaction
$29
Over The Limit Penalty
Our Take
The BMO U.S. Dollar Mastercard®* is designed for Canadians who frequently make purchases in U.S. dollars, allowing them to avoid foreign transaction fees by billing transactions directly in USD. Cardholders benefit from purchase protection and extended warranty coverage; however, balances must be paid in U.S. dollars, and the card does not offer a rewards program.
Eligibility
Very Good (671 - 739)
Recommended Credit Score
$15,000
Required Annual Personal Income
Pros
Cons
Annual Interest Rates
21.99%
Purchase
23.99%
Cash Advance
23.99%
Balance Transfer
Fees
$49
Annual Fee
$0
Foreign Transaction
$29
Over The Limit Penalty
Which credit card has the best exchange rate?
Exchange rates are assigned by credit card processors—i.e., Visa, Mastercard or American Express—and not credit card issuers, so one specific credit card can’t be identified as having the best exchange rate. Our studies reveal that Mastercard typically has slightly better rates for major reserve currencies than Visa or Amex—but the difference is so minor that it probably shouldn’t factor into your credit card selection.
We instead recommend choosing a credit card based on its features, like its cash back or rewards rates, fees or insurance package (be sure to check out our list of the Best Credit Cards for Travel Insurance). And if you’re a frequent global traveller, waiving foreign transaction fees might be the most important, money-saving feature you should consider above all others.
What if I need to exchange cash currency?
There are several reasons why you may not wish to just rely on your credit card when travelling across the border or overseas. Many of us like to carry cash on us when making a trip abroad, thereby avoiding extra credit card fees. You also may be looking to exchange wire transfers, cheques, drafts or traveller’s cheques to or from your Canadian currency. So, how can you make sure you’re getting the best currency exchange rate when doing so?
Some banks, like RBC and TD, offer online foreign exchange currency converters for their customers, so you can find out your bank’s exchange rate instantly for the most commonly converted currencies. But before going straight to your bank, it’s a good idea to compare your bank’s rates against an objective source, like the Bank of Canada’s online currency converter. Also check the rates offered by professional currency exchange offices, taking into account any added fees charged by your bank or the currency exchange service.
Read: How to exchange currency (without getting ripped off)
Note that your bank may only post their non-cash rate (for example, what you’d get if you cashed a cheque) on their online converter, which is more favourable than their cash rate. Why? Cash rates include shipping and handling charges, while non-cash rates do not. Make sure the rate you’re given is the correct cash rate before you commit to purchasing cash currency.
Doing your due diligence when purchasing or exchanging foreign cash, either with your bank or with a currency exchange service, will allow you to avoid inflated exchange rates (including the dreaded airport and/or international ATM exchange fees!).
FAQs
Barry Choi is a Toronto-based personal finance and travel expert who makes frequent media appearances. When he's not educating people on how to be smarter with money, he's earning and burning miles and points for luxury travel.
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