How to avoid additional fees for using Canadian accounts abroad?

Using Canadian bank accounts outside the country often comes with a bunch of extra fees that can really add up. Understanding these fees and knowing how to avoid them can help you save hundreds or even thousands of dollars each year when traveling or making international purchases.

Main types of fees for foreign transactions

Foreign transaction fees

Most Canadian banks and credit institutions charge a foreign transaction fee ranging from 2.5% to 3.5% of the amount of each transaction. This fee applies regardless of whether you use your card in a store abroad or make purchases online on foreign websites.

For example, if you spend $500 (approximately $628 CAD), with a 2.5% fee, you will actually pay about $644 CAD.

ATM cash withdrawal fees

When using Canadian cards at foreign ATMs, you may encounter several types of fees:

  • Issuing bank fee: typically 2–5 CAD per transaction
  • Foreign transaction fee: 2.5% of the withdrawal amount
  • ATM operator fee: set by the local ATM
  • Currency conversion fee: additional margin on the exchange rate

Hidden fees in exchange rates

Even if your bank does not charge a direct fee for foreign currency transactions, it may add a hidden margin to the exchange rate. Canadian banks typically add a markup of 1% to 5% to the interbank rate, making your exchange less favorable than what you see online.

Strategies for avoiding fees

Choose credit cards with no foreign transaction fees

The most effective way to avoid fees is to use credit cards with no Foreign Transaction Fee:

  • Scotiabank Passport Visa Infinite Card

  • No foreign transaction fees

  • 6 free airport lounge visits

  • Comprehensive travel insurance

  • Earn Scene+ points on all purchases

  • Scotiabank Gold American Express Card

  • Annual fee of CAD 120 (first year free)

  • No foreign transaction fees

  • Up to 6× Scene+ points on grocery purchases

  • 5× points at restaurants and entertainment venues

  • Travel insurance up to CAD 1 million

  • Home Trust Preferred Visa

  • No annual fee

  • No foreign transaction fees

Using specialized debit cards

  • Wise Card

  • Interbank exchange rate with no markups

  • Over 40 currencies in one account

  • First two withdrawals free each month (up to CAD 350)

  • After that, CAD 1.50 + 1.75%

  • EQ Bank Card

  • No foreign transaction fees

  • Use of Mastercard exchange rate without markups

  • Free ATM withdrawals

  • 0.5% cashback on all purchases

  • Interest on account balance

  • KOHO Extra/Everything

  • No foreign transaction fees

  • One free withdrawal at foreign ATMs per month

  • Monthly fee of $9–$19

Planning and preparing for your trip

Notifying your bank about your trip

Although most Canadian banks no longer require mandatory travel notifications, it is still a good idea to set up a travel notice via your mobile app or online banking, especially for unusual destinations or long trips.

Set up notifications

Activate mobile transaction alerts to receive instant notifications about all transactions made abroad. This will help you control your spending and quickly identify any suspicious activity.

Exchange currency in advance

  • Banks and credit unions: usually the best rates among traditional institutions
  • Specialized exchange offices (e.g., Interchange Financial): often better rates
  • Avoid exchanging money at airports and hotels: they offer the worst rates

Alternative transfer methods

For large amounts or regular transfers

  • Wise: interbank exchange rate with minimal fees
  • XE Money Transfer: competitive rates for large amounts
  • Remitly: fast transfers with transparent fees

Use local payment networks

Local systems instead of SWIFT can significantly reduce fees thanks to direct partner networks.

Additional tips for saving money

Strategic use of cards

  • PIN transactions Use a PIN instead of a signature to reduce the risk of your card being blocked.

  • Currency selection Pay in local currency — conversion by the merchant is usually less favorable.

  • Combining transactions Make fewer but larger cash withdrawals; fixed fees per transaction remain the same.

Long-term strategies

  • Multi-currency accounts Keep funds in multiple currencies at the same time to avoid frequent conversions.

  • Travel insurance Use cards with built-in travel insurance — this will save you money on separate policies.

Choosing the right financial tools and strategic planning can significantly reduce the cost of using Canadian accounts abroad. Compare different options, considering not only fees but also additional benefits to find the best balance for your travel and international transaction needs.