The Foreign Transaction Fee is the charge applied to your credit card when paying for a service or product in a foreign (non-local) currency.
The currency in Canada is the Canadian Dollar. If you pay for something in a different currency; let’s say US Dollars, Euros, Pound Sterling, etc., then you might get charged with a Foreign Transaction Fee.
The Foreign Transaction Fee is apparently a big business for banks and other credit cards issuers in Canada. They charge a 2.5% of the amount spent that is NOT in Canadian Dollars. So, be advised that if you pay in US Dollars, Euros, or any other currency that’s not the Canadian currency, then you‘ll get busted with the 2.5% Foreign Transaction Fee.
As far as I know, to this date, the only issuer of credits cards in Canada that do NOT charge a Foreign Transaction Fee is Chase. Chase is an American bank authorized to conduct businesses in Canada.
Chase offers various credit cards with No Foreign Currency Transaction Fee. These are some examples:
- Amazon.ca Rewards Visa Card
- Sears Financial™ MasterCard®
- Marriott Rewards® Premier Visa® Card
- Sears Financial™ Voyage™ MasterCard®
For the more information about the cards provided by Chase visit: Chase for Canadian customers.
I got myself an Amazon.ca Rewards Visa Card. In the details of the card you can read:
Foreign Currency Conversion: We will bill you in Canadian Currency if you use your account to make a transaction in foreign currency. We will convert it into Canadian currency at the exchange rate set by Visa International in effect at the time we post the transaction to your account. This exchange rate may be different from the rate in effect on the transaction date. We will not charge you any additional foreign currency conversion charge.
This is the card I use whenever I pay for something in non-Canadian dollars; thus avoiding the sneaky Foreign Transaction Fee. You can do the same and save yourself a few bucks ;-)
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