What does the 2.5% foreign transaction fee actually cost?
Most Canadian cards add 2.5% to any purchase made in a currency other than Canadian dollars. It applies in person abroad and online from foreign retailers. On a $5,000 international trip that is $125. On $10,000 of foreign spending a year it is $250.
The fee sits on top of, and usually outweighs, what the card earns. A typical card charges 2.5% and earns roughly 1% back, leaving you net down about 1.5% on every foreign purchase. A no-FX card removes the surcharge, so the same purchase earns net positive instead.
So the first filter for a travel-spending card is simple: does it waive the foreign transaction fee? Four cards on this list do. One offsets the fee on US dollars only. One charges it in full with nothing to soften the blow.
How a prepaid card limits what is at risk
A no-FX fee is about cost. Prepaid is about safety. A prepaid card like the KOHO Everything card is not linked to a credit line or your main chequing account. You load a set amount and spend from that balance, which changes the risk picture abroad:
Exposure is capped at the loaded balance. If the card is skimmed at an ATM or a sketchy terminal, a thief can reach only what you have loaded, not a full credit limit or your bank account.
It is separate from your primary money. The card you tap at street stalls and bars is not the account your rent comes out of. A virtual card number adds another layer for online bookings.
You can freeze it instantly. If it goes missing, lock it in the app in seconds and move the balance to a replacement, rather than waiting on a card-cancellation call from overseas.
The trade-offs are real and worth planning around. Hotels and car-rental desks place pre-authorization holds, often $200 to $500 or more, that must be available in the balance or the hold is declined. And prepaid cards carry no travel insurance. For medical, cancellation, or baggage coverage you still need a separate policy or a traditional travel card. The practical setup is a prepaid card for day-to-day spending and a no-FX credit card behind it for holds and insurance.
How the cards compare for spending abroad
Net on foreign spend is the earn rate minus the foreign transaction fee. Positive means the purchase comes out ahead; negative means it costs you.
| Card | Type | Annual fee | FX fee | Net on foreign spend | Travel insurance |
|---|---|---|---|---|---|
| KOHO Everything | Prepaid Mastercard | $84 / yr | None | +0.5% to +2% | None |
| Wealthsimple Card | Visa Infinite Privilege | $0 | None | +1% to +1.5% | Comprehensive ($5M medical) |
| Scotiabank Passport Visa Infinite | Visa Infinite | $150 | None | ~+1% (Scene+) | Comprehensive ($1M medical) |
| Scotiabank Gold American Express | American Express | $120 | None | ~+1% (Scene+) | Comprehensive ($1M medical) |
| Rogers Red World Elite | World Elite Mastercard | $0 | 2.5% | +0.5% USD / −1% other | Comprehensive ($1M medical) |
| Tangerine Money-Back | Mastercard | $0 | 2.5% | −0.5% to −2% | None |
Figures match each card’s full review page and were verified June 2026. Acceptance matters too: the Gold Amex runs on American Express, which is declined more often abroad than Visa or Mastercard, so it pairs best with a no-FX Visa or Mastercard as backup.
Spend on these abroad · true no-FX
No foreign transaction fee, and a positive net on foreign spend. These are the cards to actually use overseas.
KOHO Everything
Prepaid Mastercard, no FX fee. Load a set amount and your exposure is capped at the balance, with instant freeze and a virtual card. 2% back on groceries, dining, and transport; 0.5% elsewhere. No travel insurance, and watch pre-auth holds.
See card details →
Wealthsimple Card
Visa Infinite Privilege at no annual fee, no FX fee, and up to $5M emergency medical. Flat 1% to 1.5% cash back depending on tier. The catch is eligibility: $100,000+ invested with Wealthsimple.
See card details →
Scotiabank Passport Visa Infinite
No FX fee, six airport lounge passes a year, and comprehensive insurance, on Visa for broad global acceptance. Earns Scene+ on every foreign purchase. $150 a year.
See card details →
Scotiabank Gold American Express
No FX fee and the highest everyday Scene+ earn rates of the group, for $120 a year with no income requirement. Best paired with a backup Visa or Mastercard, since Amex acceptance abroad is patchier.
See card details →
Best for US trips
It charges the full 2.5% fee, but the 3% earn on US dollars more than covers it. A net winner south of the border, a net loser everywhere else.
Leave this one at home abroad
A solid domestic cash-back card, but it charges the full 2.5% fee with no offset. Use it to build cash back before the trip, not at the foreign hotel desk.
Common questions
Which Canadian credit cards have no foreign transaction fee?
The Scotiabank Passport Visa Infinite, the Scotiabank Gold American Express, and the Wealthsimple Card all waive it. The KOHO Everything prepaid Mastercard also charges no FX fee. Each applies zero currency-conversion surcharge on foreign-currency purchases, in person or online.
What is the foreign transaction fee in Canada?
Most Canadian cards add 2.5% to every purchase made in a foreign currency. On a $5,000 trip that is $125; on $10,000 of annual foreign spending it is $250. It applies to online purchases from foreign retailers too, not only in-person spending abroad.
Are prepaid cards good for travel?
A prepaid card caps your risk: you spend only from a loaded balance, so fraud exposure is limited to what you load, the card is not tied to your main bank account, and you can freeze it instantly in the app. The trade-offs are hotel and car-rental pre-authorization holds, which can be declined, and no built-in travel insurance.
Which card is best for spending in the United States?
The Rogers Red World Elite earns 3% on US-dollar purchases, which more than offsets its 2.5% FX fee for a net gain of about 0.5%. It is US-specific: on other foreign currencies the rate drops to 1.5% and the fee makes those purchases net negative.