Foreign transaction fee: How to avoid in 2026
A foreign transaction fee is a charge your card provider may apply when you spend in a foreign currency. You might encounter it while travelling or shopping online from Canada. Many Canadian cards charge around 2.5%, although fees vary and some cards charge none.
This guide explains how foreign transaction fees work and how to reduce them. We’ll also compare options including the Wise debit card, KOHO prepaid Mastercard, Scotiabank Gold American Express card and Wealthsimple Visa Platinum prepaid card.
Quick summary: International transaction fees
- Foreign transaction fees commonly apply to foreign-currency card purchases and withdrawals, including transactions made online from Canada.
- Around 2.5% is common, but it is not a universal rate or a maximum.
- Some debit, prepaid and credit cards have no foreign transaction fee. Other costs, including subscriptions, conversion fees and ATM charges, may still apply.
- KOHO Core is free and charges a 1.5% card foreign transaction fee. Extra and Everything have paid subscriptions and no foreign transaction fees.
- International money transfers are available on all KOHO plans, including free Core. Transfer pricing is separate from card spending fees.
- Wise uses the mid-market exchange rate with a separate conversion fee when currency exchange is needed. Spending a currency you already hold is free.
What is a foreign transaction fee?
A foreign transaction fee is a charge your bank or card issuer applies to certain international transactions. For many Canadian cards, it applies when a purchase or withdrawal is made in a currency other than CAD.
The fee is usually a percentage of the transaction value. It may be included in the converted amount charged to your credit card or deducted from your debit or prepaid account.
The exact definition depends on your card agreement. An overseas merchant’s location alone does not tell you which fees will apply: check the billing currency and your provider’s terms.
How foreign transaction fees work
When you make a foreign-currency purchase using a CAD card, the provider generally converts the amount into Canadian dollars using the applicable exchange rate. If your card charges a foreign transaction fee, that charge is then included in the amount you pay.
For example, if a purchase converts to $100 CAD before fees and your card charges 2.5%, the total would be $102.50 CAD.
The fee may be included in the conversion rather than displayed as a separate statement entry. Some providers use labels such as “foreign currency conversion” or “international transaction fee.”
Multi-currency accounts can work differently. If you have enough of the purchase currency in your account, a supported card may deduct that currency directly without converting it.
Check your card’s fee schedule to understand which rate and charges apply.
How much are foreign transaction fees?
Many Canadian cards charge around 2.5% for foreign-currency transactions. At that rate, purchases worth $5,000 CAD before the fee would generate $125 CAD in foreign transaction charges.
Some cards have no foreign transaction fee, but the conditions differ.
The Wise debit card has no separate foreign transaction fee. It is linked to a multi-currency account, and a conversion fee applies when you need to exchange currencies.
KOHO’s prepaid Mastercard has no foreign transaction fee on Extra and Everything. Its free Core plan charges 1.5%.
💡 Holding a foreign currency can remove the need to convert money when you make a purchase. However, you may already have paid a conversion fee when buying that currency. Compare the full cost rather than only the charge at checkout.
How to avoid foreign transaction fees
There are several ways to reduce the cost of spending abroad:
- Choose a card with no foreign transaction fee. Compare subscription or annual fees alongside the potential savings. The options below include debit, prepaid and credit cards.
- Consider a multi-currency account. Providers such as Wise let you hold foreign currencies and spend an available matching balance without another conversion at checkout.
- Compare paid plans with your expected spending. KOHO Extra and Everything remove the 1.5% fee charged on Core, but you should include their subscription costs in your comparison.
- Review cash withdrawal costs separately. Cash purchases do not carry a card transaction fee, but obtaining the cash may involve conversion charges, withdrawal fees and ATM operator charges.
- Check the currency before confirming payment. When travelling, choosing the local currency generally avoids the merchant or ATM performing its own conversion into CAD.
Using cash or paying in CAD does not automatically make a transaction cheaper. Compare the total amount you will pay.
Cards with no foreign transaction fees
You can choose from debit, prepaid and credit cards that offer no foreign transaction fee, either as standard or through a paid plan.
Credit cards let you borrow and repay later. Depending on the product and how you use it, annual fees, interest and cash advance charges can outweigh the savings on foreign transaction fees.
Debit and prepaid cards generally use money already available in the linked account or card balance. They can also have account fees, conversion charges and withdrawal costs.
Here are several options to compare. All subscription and annual fees are in CAD.
| Provider | Foreign transaction fee | Exchange rate | Currency conversion cost | Other fees |
|---|---|---|---|---|
| Wise debit card | No separate foreign transaction fee. | Mid-market exchange rate. | No conversion needed when spending a currency you hold in sufficient balance. Conversion fees are advertised from 0.19%, depending on the currency. Check the applicable quote. | No monthly or annual subscription fee. ATM and other transaction fees may apply. |
| KOHO prepaid Mastercard | Core: 1.5%. Extra and Everything: none. | Mastercard exchange rate. | Foreign-currency card spending is converted to CAD. Core adds its 1.5% fee; Extra and Everything do not add this fee. | Core: $0/month. Extra: $18/month or $144 annually. Everything: $22/month or $177 annually. ATM operator fees may apply. |
| Scotiabank Gold American Express card | No foreign transaction fee. | Applicable American Express exchange rate. | No additional issuer foreign transaction fee; the applicable exchange rate still determines the CAD amount. | Standard annual fee: $120. Interest, cash advance and other charges may apply. |
| Wealthsimple Visa Platinum prepaid card | No foreign transaction fee. | Visa exchange rate on the settlement date. | No additional foreign transaction fee; conversion uses the applicable Visa rate. | No card fee or monthly chequing account fee. Other account services may have charges. |
Network exchange rates can differ from the mid-market rate. A difference between rates does not necessarily represent a separately itemised fee.
Wise card
The Wise debit card is linked to an account that can hold and exchange 40+ currencies.
If you have enough of the currency you are spending, Wise deducts it without a conversion charge. Otherwise, you can convert money beforehand or let Wise convert at the time of payment.
Conversion uses the mid-market exchange rate with a separately stated fee. The amount depends on the currencies involved, so check your quote.
💡 Learn more in our Wise card review and guide to using the Wise card abroad.
KOHO card
KOHO offers a prepaid Mastercard linked to a CAD account. Its three plans are Core, Extra and Everything.
Core is free and charges a 1.5% foreign transaction fee. Extra and Everything have paid subscriptions and no foreign transaction fees.
| Feature | Core | Extra | Everything |
|---|---|---|---|
| Monthly subscription | $0 | $18 | $22 |
| Annual subscription option | Free plan | $144 | $177 |
| Card foreign transaction fee | 1.5% | None | None |
| Cashback on groceries, eating and drinking, and transportation | 1% | 1.5% | 2% |
| Cashback on other purchases | Check applicable merchant offers and reward terms | 0.25% | 0.5% |
| Annual interest rate | 2% | 2.5% | 3.5% |
| International money transfers | Available on this free plan | Available | Available |
Core also offers up to 6.5% additional cashback at selected merchants. Cashback eligibility and merchant offers have their own conditions, and interest rates may change.
International money transfers are available on every plan, including free Core, to 190+ countries. KOHO advertises competitive exchange rates, no hidden fees and transfers that can arrive within 30 minutes. Actual delivery times vary, and transfer access does not mean every transfer is free.
Card foreign transaction fees are separate from international transfer pricing. Check the transfer quote before confirming.
ATM operator fees may also apply when withdrawing cash. Extra and Everything customers can request reimbursement for one international ATM withdrawal fee per month.
Learn more about KOHO international fees.
Scotiabank Gold AmEx card
The Scotiabank Gold American Express card has no foreign transaction fee and a standard annual fee of $120. Its minimum credit limit is $5,000, subject to approval.
The currently advertised annual interest rates are 21.99% on purchases and 22.99% on cash advances. These are borrowing costs you may pay, not interest you earn.
The card earns Scene+ points on eligible purchases. Compare its fees, rewards and acceptance with your travel plans, and check the current disclosure before applying.
Wealthsimple card
Wealthsimple currently advertises the Visa Platinum prepaid card linked to its chequing account. It spends money from your account balance and has no card fee, monthly account fee or foreign transaction fee.
Foreign-currency purchases use the applicable Visa exchange rate. Some existing customers may still have a prepaid Mastercard while transitioning, so check which card and terms apply to you.
The former 1% cashback benefit on Wealthsimple’s prepaid Mastercard ended on September 30, 2025. Do not confuse the prepaid card’s benefits with those of Wealthsimple’s separate credit card.
Is it better to pay in local currency or card currency?
When travelling, paying in the local currency generally avoids dynamic currency conversion, or DCC.
DCC is when a merchant or ATM offers to convert the transaction into your home currency, such as CAD. The displayed amount may seem convenient, but the conversion can include an exchange-rate markup or additional charges.
If you decline DCC and pay in the local currency, your card provider handles any required conversion according to your card’s terms. This does not remove your card’s own foreign transaction fee, if it has one.
For online purchases, compare the final amounts offered in different currencies. A retailer’s CAD price may use its own conversion rate, but not every CAD price offered by an overseas business is a DCC transaction.
How do I know if my card has a foreign transaction fee?
Check your cardholder agreement, fee schedule or application disclosure. Look for headings such as “foreign currency conversion,” “foreign transactions” or “international purchases.”
Confirm:
- The percentage fee, if any
- Which transactions trigger it
- The exchange rate used
- Whether withdrawals have additional charges
- Whether a particular account plan is required for a fee waiver
If anything is unclear, ask your provider before making a large purchase or travelling.
Foreign transaction fee vs currency conversion fee
Providers do not always use these terms in the same way. A fee described as a “foreign currency conversion charge” by one issuer may serve the same purpose as another issuer’s “foreign transaction fee.”
The important comparison is the total cost: the exchange rate, any added percentage or fixed charge, and other transaction fees.
With a Wise card, for example, there is no separate foreign transaction fee, but a conversion fee applies when currencies need to be exchanged.
| Foreign transaction fee | Currency conversion fee |
|---|---|
A charge that may apply to foreign-currency or other qualifying international transactions under the card agreement. Often calculated as a percentage of the transaction. May be included in the converted amount rather than listed separately. | A charge associated with exchanging one currency for another. May be quoted separately or included in the exchange rate. Can apply when converting an account balance or paying in a currency you do not hold. |
These labels do not necessarily describe two separate charges. Read the fee schedule carefully to avoid counting the same cost twice.
What is an international POS fee?
POS means “point of sale.” An international POS fee is a provider’s label for a charge associated with a qualifying international card purchase.
The name alone does not explain how the fee is calculated. Depending on the provider, it may refer to a foreign transaction charge, a fixed transaction fee or another charge specified in the account agreement.
Check the transaction’s currency and your fee schedule, or ask the provider to explain the entry. Do not assume it represents an additional charge on top of a foreign transaction fee already included.
What is the best way to take money abroad for travel?
A combination of payment methods can be useful: a card with competitive international fees, a backup card and some local cash where needed.
Compare the cost of purchases and withdrawals separately. Also check whether hotels or car rental companies require a credit card or place a hold on your available balance.
These guides can help you prepare:
- How to withdraw money abroad
- Using credit cards for international travel
- How to use the Wise card abroad
Conclusion: How to reduce foreign transaction fees
Foreign transaction fees can increase the cost of purchases and cash withdrawals in foreign currencies. A 2.5% charge adds $125 to spending worth $5,000 CAD before fees.
Compare cards using their total costs, including subscriptions, exchange rates, conversion charges and ATM fees.
Wise offers multi-currency spending with a separate fee when conversion is needed. KOHO Extra and Everything remove card foreign transaction fees for a paid subscription, while free Core charges 1.5%. All three KOHO plans include access to international money transfers.
Scotiabank Gold American Express and Wealthsimple Visa Platinum prepaid are other options with no foreign transaction fee, but their account structures and other costs differ.
Choose based on how much you expect to spend, whether you need cash and which account features you will use.
International transaction fees FAQs
Does Mastercard have foreign transaction fees?
A Mastercard logo does not tell you whether your card charges a foreign transaction fee. The issuer sets the cardholder fees, while Mastercard may provide the exchange rate.
For example, KOHO Core charges a 1.5% foreign transaction fee, while KOHO Extra and Everything do not. All use the Mastercard network.
Learn more: Advantages and disadvantages of using a credit card abroad.
Does Visa charge foreign transaction fees?
Whether you pay a foreign transaction fee depends on the Visa card and its issuer. Some cards charge a percentage, while others have no foreign transaction fee.
The applicable Visa exchange rate can still differ from the mid-market rate. Check your card’s terms for both the rate and any added charges.
For more information: Visa card foreign transaction fees.
What does no foreign transaction fee mean?
It means the provider does not add the foreign transaction charge described in its card terms. It does not guarantee that all international use is free.
Currency conversion, ATM withdrawals, subscriptions and credit card interest can still involve costs. With a multi-currency account, spending may instead be deducted directly from an available balance in the transaction currency.
Does no foreign transaction fee mean I’ll get the exchange rate on Google?
No. Your card may use a network or provider exchange rate that differs from the mid-market rate shown by currency information services.
Wise uses the mid-market rate with a separate conversion fee when exchange is required. Rates also change over time, so a rate displayed during an online search may differ from the rate applicable when a transaction is processed.
What is the “intl txn fee”?
“Intl txn fee” usually means “international transaction fee.” It is a statement label for a charge connected to a qualifying international transaction.
The exact trigger and calculation depend on the provider. Check your card agreement or ask the issuer to explain the charge, including whether it is already part of the currency conversion cost.