What is a foreign transaction fee?

Financial institutions charge foreign transaction fees (usually around 2.5%) whenever a currency conversion is required. For example, if you pay for a US purchase with a Canadian debit card, your bank will charge a fee for exchanging Canadian dollars to US dollars to process the payment.

Is there a foreign transaction fee for making online purchases from foreign website?

If you make an online purchase from a foreign retailer that charges you in any currency other than Canadian dollars, then you would have to pay a foreign transaction fee (unless your card waives this fee). If a foreign retailer charges you in Canadian dollars, then your funds don't have to be converted and you won't pay a foreign transaction fee.

Is there a foreign transaction fee for booking a plane ticket through an international airline's Canadian website?

If the international airline charges you in Canadian dollars, you likely won't have to pay a foreign transaction fee. But if you pay in any other currency, your financial institution will likely charge you a foreign transaction fee.

Can I get a replacement debit card if I lose my card while travelling?

Yes. Both Visa and Mastercard offer overseas debit card replacements.

Do all Canadian credit cards have foreign transaction fees?

No. While many cards do have foreign transaction fees, it's also possible to find a Canada credit card with no foreign transaction fee. Options include the Scotiabank Gold American Express Card and the Scotiabank Passport Visa Infinite Card.

How can I avoid foreign transaction fees in Canada?

If you're a foreign resident visiting Canada, you can avoid these fees by choosing a debit or credit card with no foreign transaction fees. There are also prepaid cards available that don't charge foreign transaction fees, so shop around to find the card that's right for you.

Matthew Boyle

Publisher

Matthew Boyle is a banking and mortgages publisher at Finder. He has a 7-year history of publishing and has commissioned over 600 guides helping UK consumers and small business owners make better financial decisions.

Matthew holds a BSc in European Business from the University of Hertfordshire and in his spare time loves to walk around Norfolk enjoying the local wildlife.

Expertise

Helping first-time buyers apply for a mortgage
Comparing bank accounts and highlighting useful features
Publishing easy-to-understand guides

Experience

Published over 600 articles on personal finance
Featured in leading trade publications and national press including The Times, The Telegraph, The Mirror, The Daily Express and more
On the judging panel for Finder’s Banking Innovation Awards

Education

BSc (Hons) European Business | University of Hertfordshire

Featured publications

Industry insights from Matthew Boyle

We asked Matthew to share his expertise by answering a few questions about the mortgage and banking industry in 2021.

What tips can you give to first-time buyers for getting approved for a mortgage?

Preparation is everything. For most people, getting their first mortgage is the biggest financial decision of their lives. Do your research to know any obstacles you may face, learn about what type of mortgage you want, and what fees there are. Mortgage brokers can help by providing specialist advice, for a fee. It’s smart to have a back-up plan, too. First-time buyers often find themselves being declined for a mortgage for their dream property through circumstances that can be hard to foresee. This can be disheartening but unfortunately is sometimes part of the process of getting on the property ladder.

How has the pandemic affected the mortgage industry?

Tighter lending criteria, an economic slowdown and general uncertainty among UK consumers have led to some difficult times for would-be buyers. While Brits have had some help from temporarily reduced rates in stamp duty, and lenders offering mortgage holidays, it’s still tough times for many, and house prices have risen hugely in some areas. I believe it’s far from over - the ramifications of the pandemic on mortgages and home-buying will be felt for a long time yet.

Do you think a cashless society is possible?

This transformation is well underway, speeded hugely by the pandemic. The technology in the industry is being developed at an incredible rate and initiatives like Open Banking allow users to manage nearly all aspects of their bank account and spend their money from their mobile phone. As banks continue to close branches and ATMs across the UK, more people will avoid using cash.