Is it better to pay in local currency or card currency?
When you’re traveling, using credit or debit cards to pay for things and make cash withdrawals is convenient and offers safety benefits compared to carrying around lots of cash. Depending on the card you pick and how you use it, spending with a card could also keep down your overall costs by helping you get a good exchange rate and low transaction fees.
This guide walks through things to consider when using a card overseas, and how to decide when to pay in local currency – plus we’ll cover some low-cost cards for international travel, so you can do more with your money when you’re away from home.
Key points: Pay in local currency or CAD?
Dynamic currency conversion can mean you spend more if you choose to pay in CAD overseas
Paying in CAD to make an ATM withdrawal abroad can mean you spend more in the end, thanks to unexpected fees and a bad exchange rate
Some debit and credit cards also charge foreign transaction fees which can push up the costs of spending abroad
Getting a card from a bank or specialist alternative which has no foreign transaction fee can reduce the amount you spend in the end
Specialist providers like Wise allow customers to hold foreign currency balances to instantly convert and spend as needed
Choosing a travel card with no foreign transaction fees can keep the costs of spending in foreign currencies down. Specialist travel cards like the Wise card don’t have foreign transaction fees and offer mid-market rates for currency exchange. This can mean your foreign currency spending costs less overall.
Paying in local currency vs card currency
When you pay or withdraw cash abroad, you may be offered a choice between the local currency and Canadian dollars.
Choosing the local currency generally lets your card network or provider handle any currency conversion under your card’s terms. If you have a multi-currency account with enough of the transaction currency, you may be able to spend that balance without converting money at checkout.
Choosing CAD through dynamic currency conversion, or DCC, means accepting the conversion offered by the merchant or ATM’s conversion provider. The exchange rate may include a markup or additional charges.
Here’s how the options compare:
| Paying in local currency | Paying in CAD through dynamic currency conversion |
|---|---|
|
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Many everyday Canadian cards bill in CAD, although banks and other providers also offer foreign-currency products. Check the account linked to your card rather than assuming it supports multiple currencies.
Some travel cards let you hold foreign currencies and spend a matching balance without another conversion at checkout. You may still have paid a fee when buying that currency.
Providers such as Wise let you add CAD and convert money before travelling or when you make a purchase. Wise uses the mid-market exchange rate with a separate conversion fee.
Benefits of paying in local currency
- You avoid accepting the merchant or ATM’s offered currency conversion.
- You can use your card’s applicable exchange rate and fee structure.
- Choosing a card with low or no foreign transaction fees may reduce your overall costs.
- With a multi-currency account, you may be able to spend an existing balance in the transaction currency.
- Converting money beforehand can help you set a travel budget, although it does not guarantee a better rate than converting later.
- Transaction notifications can help you track spending, although pending amounts may change before settlement.
Choosing local currency does not remove ATM operator fees, cash advance charges or your card’s own foreign transaction fee.
Should I pay in local currency or CAD on a credit card?
Paying in local currency is generally a good way to avoid DCC when using a credit card abroad.
Your card may still charge a foreign transaction fee. Around 2.5% is common on Canadian cards, but rates vary and some products have no such fee.
Compare the card’s annual fee, exchange rate and other charges. For purchases, repaying the statement balance in full by the due date, subject to the card’s terms, helps avoid interest costs that could outweigh any foreign transaction fee savings.
Do not assume every American Express card has no foreign transaction fee. The benefit depends on the specific product: the Scotiabank Gold American Express card offers it, while other Canadian American Express cards may charge for foreign-currency conversion.
The same principle applies to Visa and Mastercard. Check the particular card’s terms and whether merchants at your destination accept it.
Should I pay in local currency or CAD on a debit card?
Choosing local currency generally avoids DCC on debit card purchases and withdrawals too.
Debit cards spend money from your account, so using available funds avoids credit card borrowing interest. However, foreign transaction fees, account charges and withdrawal fees can still apply.
A card with no foreign transaction fee is not automatically the cheapest overall. Compare exchange rates, conversion fees, subscriptions and ATM charges.
Options include the Wise debit card and KOHO prepaid Mastercard. They work differently: Wise supports multi-currency balances, while KOHO holds CAD and offers plan-dependent fees and rewards.
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 three plans, including free Core.
3 travel cards to compare for spending abroad
The three options below include a debit card, a prepaid card and a credit card. Compare their total costs against how you expect to spend and withdraw money.
All prices are in CAD.
| Feature | Wise card | KOHO card | Scotiabank Gold American Express card |
|---|---|---|---|
| Card type | Debit card | Prepaid Mastercard | Credit card |
| Foreign transaction and conversion fees | No separate foreign transaction fee. Conversion fees are advertised from 0.19%, depending on the currency. | Core: 1.5% foreign transaction fee. Extra and Everything: no foreign transaction fees. | No foreign transaction fee. The applicable exchange rate still applies. |
| International ATM withdrawal fees | No Wise withdrawal fee on the first $100 withdrawn per calendar month. Above the allowance: $2.69 per chargeable withdrawal plus 2.69% of the amount exceeding the allowance. Conversion and ATM operator fees may also apply. | ATM operator fees vary. Extra and Everything customers can request reimbursement for one international ATM withdrawal fee per month. Core’s 1.5% foreign transaction fee applies to foreign-currency withdrawals. | $7.50 cash advance fee at ATMs outside Canada, or $5 at Global ATM Alliance bank ATMs outside Canada. Cash advance interest and ATM operator fees may also apply. |
| Subscription or annual fee | No monthly or annual subscription fee. | Core: $0/month. Extra: $18/month or $144 annually. Everything: $22/month or $177 annually. | Standard annual fee: $120. |
| Exchange rate | Mid-market exchange rate with a separate conversion fee. | Mastercard exchange rate. | Applicable American Express exchange rate. |
| International use | At supported merchants and ATMs, subject to country and transaction restrictions. | Where prepaid Mastercard is accepted, subject to applicable restrictions. | Where American Express is accepted, subject to applicable restrictions. |
Fees, benefits and eligibility can change. Check the current terms for your account before travelling.
Wise card
You can open a personal Wise account online or in the app. Standard Wise card ordering is free in Canada, while optional express delivery costs extra.
Add money and either convert it before spending or let Wise convert when you pay. If you already hold enough of the transaction currency, no conversion is needed for that purchase.
Wise uses the mid-market exchange rate with a separately stated conversion fee.
| Wise card pros | Wise card cons |
|---|---|
✅ No monthly or annual subscription fee ✅ Hold 40+ currencies ✅ Spend an available matching currency balance without conversion ✅ A monthly ATM withdrawal allowance before Wise withdrawal fees apply | ❌ Fees apply when currency conversion is needed ❌ Withdrawal fees apply above the allowance ❌ Physical card delivery takes time; check the estimate when ordering |
Learn more in our Wise card review and guide to using the Wise card abroad.
KOHO card
KOHO offers three account plans: Core, Extra and Everything. All hold CAD and include access to a prepaid Mastercard.
Core is the free plan. It charges a 1.5% foreign transaction fee, while Extra and Everything have 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. 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 access does not mean every transfer is free.
International transfer pricing is separate from card foreign transaction fees. Check the quote before sending money.
For cash withdrawals, ATM operator fees vary. Extra and Everything customers can request reimbursement for one international ATM withdrawal fee per month; this is not a blanket waiver of every withdrawal-related cost.
| KOHO card pros | KOHO card cons |
|---|---|
✅ Core is free at $0/month ✅ International transfers are available on every plan ✅ No card foreign transaction fees on Extra and Everything ✅ Plan-dependent cashback and interest | ❌ Core charges a 1.5% foreign transaction fee ❌ Extra and Everything require paid subscriptions ❌ Accounts hold CAD rather than multiple currencies |
Learn more: KOHO card international fees
Scotiabank Gold American Express card
The Scotiabank Gold American Express card has no foreign transaction fee and a standard annual fee of $120. Its exchange rate can differ from the mid-market rate, but this should not be described as an additional issuer markup without reference to the card’s terms.
It earns Scene+ points on eligible purchases. Foreign-currency purchases earn the regular rate of 1 point per CAD dollar after conversion; accelerated categories apply to qualifying CAD purchases.
The lounge benefit is a discount on Priority Pass membership, not complimentary lounge visits.
Cash withdrawals are cash advances. The overseas ATM fee is generally $7.50, or $5 at Global ATM Alliance bank ATMs outside Canada. Interest starts from the transaction date, with no cash advance grace period.
| Scotiabank Gold American Express card pros | Scotiabank Gold American Express card cons |
|---|---|
✅ No foreign transaction fee ✅ Scene+ rewards on eligible spending ✅ Travel benefits, subject to conditions | ❌ Standard $120 annual fee ❌ Cash withdrawals incur fees and immediate interest ❌ Merchant acceptance varies |
5 types of international transaction costs to know
Check your card’s terms for the following costs. Providers sometimes use different labels for the same charge, so these are not necessarily five separate fees added to every transaction.
Foreign transaction fees: A card issuer may add a percentage charge to qualifying foreign-currency transactions. Around 2.5% is common, but some cards charge less or none.
Currency conversion costs: When currencies need to be exchanged, a provider may charge a separate fee or include a margin in its exchange rate. An available matching balance in a multi-currency account may avoid conversion at checkout.
Dynamic currency conversion: A merchant or ATM may offer to bill you in CAD using its conversion service. Review the offered rate and charges. Declining DCC normally lets your card provider handle conversion instead.
International POS fees: “POS” means point of sale. An international POS fee is a provider’s label for a qualifying overseas purchase charge. It may be another name for a foreign transaction fee rather than an additional cost.
International ATM fees: Your provider and the ATM operator may each charge for a withdrawal. Conversion costs may also apply. With a credit card, include cash advance fees and interest in the comparison.
Conclusion: Is it better to pay in local currency with a credit card abroad?
Paying in local currency generally avoids the merchant or ATM’s dynamic currency conversion. Your card provider then handles any required conversion according to your card’s terms.
To manage the total cost:
- Compare exchange rates and conversion fees.
- Check subscriptions or annual fees as well as foreign transaction charges.
- Review ATM fees separately from purchase fees.
- Avoid assuming that a network logo guarantees fee-free international spending.
The Wise card offers multi-currency spending with a separate conversion fee when exchange is needed.
KOHO Core is free and includes international transfer access, but charges a 1.5% card foreign transaction fee. Extra and Everything remove that card fee in exchange for a paid subscription.
If you prefer a credit card, compare specific products such as Scotiabank Gold American Express, including the annual fee and borrowing costs.
FAQs: Paying in local currency vs card currency
Should I pay in pesos or dollars with a credit card?
In Mexico, choosing Mexican pesos generally avoids dynamic currency conversion into CAD or another currency.
Your card’s normal exchange rate and any foreign transaction fee still apply. If a merchant offers a separate dollar price, compare the final costs rather than assuming it is equivalent.
For credit card purchases, repay your statement balance in full by the due date under your card’s terms to avoid purchase interest.
Is it better to pay in euros or dollars when travelling in Europe?
In countries that use the euro, choosing euros generally avoids the merchant’s conversion into dollars.
Elsewhere in Europe, choose the relevant local currency, such as British pounds in the UK or Polish zloty in Poland. Your card’s own conversion and transaction fees may still apply.