![]() Then, on the converted total in Canadian dollars, you’d be charged a foreign transaction fee on top. That 500 pesos would first be converted into Canadian dollars at a conversion rate set by the credit card company (conversion rates issued by your credit card provider are not the same as the Bank of Canada conversion rate, they’re higher and can differ from card to card). So, let’s say that Mexican dinner costs you 500 pesos. Foreign transaction fees are intended to cover the processing cost of converting your transaction from a foreign currency into Canadian dollars.įoreign transaction fees occur after your purchase has been subject to conversion. Similarly, say you buy something from a website in the United Kingdom or the United States or France and pay in pounds or US dollars or Euros, that’ll be subject to a foreign transaction fee too. That meal purchase will be subject to a foreign transaction fee. Say you’re in Mexico and you use your credit card for dinner. This is an example of how foreign transaction fees work. Foreign transaction fees differ between credit card companies and even between cards from the same provider. The fee is usually between 1-3 percent of the spend total (typically 2.5 percent in Canada), added after conversion rates have been applied. What is a foreign transaction fee?Ī foreign transaction fee is a fee charged on purchases made in foreign currencies or that pass through a foreign bank. So, what is a foreign transaction fee? How are they calculated? And do you have options to avoid them? Read on to find out. When you spend on a credit card in a foreign currency, you’re often charged a foreign transaction fee on each purchase. ![]() But with that convenience comes a fee – at least, in most cases it does. They make life easier, make shopping more convenient, allow you to make purchases without carrying so much cash, and paying at restaurants is a cinch.Ĭredit cards are accepted in so many places, in almost all countries. Credit cards are super handy when you’re traveling. ![]()
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