Foreign Transaction Fees Credit Cards – Whenever you use your regular credit card to buy something in a foreign currency or use it while traveling abroad, you may pay a foreign transaction fee (also called an exchange rate fee or foreign exchange fee) of about 2.5% on top of the spot rate. for every purchase you make.
If you travel abroad frequently or make frequent purchases in foreign currency, you may benefit from a credit card with no international transaction fee, which can save you a lot of money.
Foreign Transaction Fees Credit Cards
Most credit cards with no international transaction fee also include additional services such as travel awards and cashback, and some offer comprehensive travel insurance. Choosing a card that suits your spending habits offers maximum value for every dollar spent, along with additional benefits. We’ve listed the best no-fee credit cards in Canada along with their benefits so you can choose the best one for you.
Traveling Abroad This Summer? Get A Zero Foreign Transaction Fee Credit Card
Some credit cards with no foreign transaction fee in Canada have no annual fee, while others charge an annual fee that can run into hundreds of dollars. No annual fee cards tend to come with fewer perks and rewards, while annual fee cards often come bundled with a better rewards structure and more benefits. Some annual fee cards also waive the first-year fee and offer first-year welcome bonuses.
Which card you choose will largely depend on your spending habits. For example, if you only want to use your no-fee credit card for international travel once or twice a year and don’t find the rewards structure offered by the card useful for your needs, you can get a no-fee card. If you travel abroad for work from time to time, a card with an annual fee but good travel services and insurance may be a better choice for you.
When transacting in a foreign currency, the exact amount you pay in your home currency depends on the credit card you are using at the time. Some credit cards use the exchange rate set by credit card networks like VISA, Mastercard, and Amex and charge a foreign transaction fee (typically 2.5%), while others set their own exchange rate. Some cards may not have exchange rate fees, but they can still charge a much higher exchange rate for transactions. Therefore, it is important to understand exactly how the credit card will charge you for your foreign exchange transactions.
It’s also worth noting that all major credit card networks – VISA, Mastercard, and AMEX – have different exchange rates and vary slightly. So the exchange rate you get also depends on your card issuer.
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Regular credit cards charge you a foreign transaction fee for converting your foreign currency transactions into Canadian dollars before the fee is posted to your credit card statement. Also note that the exchange rate fee also applies to any refunds you receive and you won’t get back the 2.5% exchange fee you originally paid. This fee does not apply to cards without an exchange fee. However, they can calculate an exchange rate that is higher than the credit card network rate.
Many Canadians frequently travel to the United States for work or shop online from American retailers. Some Canadians also have income in US dollars but pay their bills in Canadian dollars. US dollar credit cards are best suited for such individuals as these types of cards do not charge exchange rate fees for US dollar transactions. Transactions are conducted entirely in US dollars, with payment also made in US dollars, saving on currency conversion fees. Please note that purchases made in currencies other than USD will incur a foreign exchange fee.
Prepaid cards are available in Canada that offer advantages in foreign currency transactions. Some of them are listed below along with their features.
Some credit cards may offer cashback for foreign currency transactions, which could offset the foreign currency conversion fee. Some examples of such cards are:
Balance Transfer Offer
Using a no-fee credit card for international travel and shopping in a foreign currency can save you a significant amount of money that you can use for other expenses. Most of these cards come with additional rewards and benefits that can help you choose the card that best suits your needs.
The calculators and content on this website are provided for general informational purposes only. does not guarantee the accuracy of the information displayed and is not responsible for the consequences of using the calculator. Pay with your credit card when you travel abroad, and you might find an unwelcome travel souvenir when you open your statement: an overseas transaction fee.
Many travelers don’t mind being charged an extra 3 percent on their international purchases, so some credit card issuers are now waiving the fee, prompting others to follow suit to stay competitive.
“It’s just a moneymaker, pure and simple.” They charge because they can,” said Brian Kelly, founder of ThePointsGuy.com, a website focused on maximizing credit card and travel rewards.
The 10 Best Free Credit Cards With No Foreign Transaction Fees 
“How crazy is that – to have an international travel card where you get fined for international use.”
American Express is removing international transaction fees — currently 2.7 percent — from its Delta SkyMiles consumer and business credit cards, effective May 1. The move is “the perfect way to add value to cardholders,” said spokeswoman Elizabeth Crosta.
Chase’s United Airlines credit card waived the fees last year, which likely motivated Delta to follow suit, Kelly said.
With this move, issuers hope not to upset their best customers, said Matt Schultz, senior industry analyst at CreditCards.com.
Credit Cards’ Unjustified 2.5% Fx Fee Screams For Competition
“In a lot of ways, the people who would worry about those foreign transaction fees — those who travel abroad and have disposable income to do those kinds of things — would be the very people who want to keep credit card issuers around,” Schultz said.
Kelly advised travelers to tell their issuer that they were traveling internationally and would never use a charge card. When shopping abroad or buying things from a foreign website, you may be asked which currency you would like to pay in – Singapore Dollars (SGD) or the country’s local currency (e.g. USD and EUR).
Who do you choose SGD? Wrong answer. You should always pay in the local currency of your location or the website you are shopping on.
Why? The answer is in your credit card terms and conditions document. Too lazy to read? We have summarized it for you.
Top 5 Credit Cards With No Foreign Transaction Fees
If you make a transaction abroad, you will have to pay certain fees, whether you make it in SGD or in local currency. This may include fees charged by the payment network, bank administrator and/or merchant.
1. Transactions in foreign currency – bank administration costs and costs of card associations (e.g. Visa, Mastercard, American Express)
The combined fees of most card issuers in Singapore are typically between 1 and 3 percent. CIMB Visa Signature and CIMB Platinum Mastercard do not charge any administration fees
2. Transactions in SGD but settled overseas – card connection fees (around 1 percent) and other not-so-transparent potential surcharges. Potential marks are normally made at the time of transaction and should be acknowledged and accepted by you
A Credit Card That Offers No Fees For Foreign Transaction Fees While Traveling Is Seen With The Earth Globe As A Background, Arrows Circling The Earth Stock Photo
Firstly, paying in SGD doesn’t save you from foreign transaction fees charged by your credit card company. The notion that this will save you on foreign transaction fees is nothing but an illusion. Unfortunately, you don’t just have to worry about the foreign transaction fee.
There’s also what’s called a dynamic currency conversion (DCC) fee associated with your foreign transactions, especially if you’re using Mastercard or Visa.
Have you ever noticed that when shopping abroad you are sometimes asked whether you want to pay in your home currency or in the local currency?
If you choose to pay in your home currency, the merchant will convert the local currency amount into SGD for you. This service is called Dynamic Currency Conversion.
International Online Credit Cards & Prepaid Debit Cards
Dynamic currency conversion sounds tempting because while we love to spend money, we have no idea what exchange rate our credit card company would use when converting our FX transaction to SGD. So when instant conversion is offered, sometimes it feels safer to go for the converted amount.
Unfortunately, the peace of mind of knowing how much your transaction will cost in your home currency doesn’t come cheap. For providing DCC services, merchants have an exchange rate premium, sometimes as high as 5 percent or more.
Remember that you choose to pay in SGD
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