Comparing credit card currency conversion costs


You may have noticed higher conversion rates for U.S. dollar purchases. We’ve compared credit card conversion fees and exchange rates against cash conversion charges at banks and currency exchange specialists

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Canadian content

Thanks to a weaker loonie, you may have noticed higher exchange rates for U.S. dollar purchases when looking at your credit card statement. The declining Canadian dollar is forcing most cardholders to pay more in currency fees.

Almost 90 per cent of credit cards apply a 2.5 per cent foreign exchange (forex) fee after the original U.S. dollar transaction is converted into Canadian funds — a fee amount that is roughly 10 per cent higher than it was a year ago. It’s almost enough to make you want to just pay with cash if you’ve got an upcoming trip. But there are a few things to keep in mind when making that decision.

To help you understand how costs compare, we’ve compiled credit
card conversion fees and exchange rates against cash conversion charges at banks and currency exchange specialists.

Credit card forex costs
The major component — besides the forex fee — that determines the overall cost of a U.S. dollar transaction is the exchange rate.

Kate Payne, media relations specialist for the Canadian Bankers Association (CBA), says American Express, MasterCard and Visa Canada set the ongoing currency exchange rates that credit card issuers use. While she isn’t aware of any conversion service fees or commissions beyond forex fees, Payne says consumers should check their cardholder agreement and ask their card issuer about any extra charges.

Below are credit card network exchange rates and card-issuer forex fees as of May 2014.


Card network providerCA$ to US$
exchange rate
exchange fees
conversion cost
American Express Canada1.102.5%1.12
MasterCard Canada
1.100% to 2.9%,
varies by card
1.10 to 1.13
Visa Canada
1.100% to 2.5%,
varies by card
1.10 to 1.12
Sources: AMEX/MasterCard/Visa Canada online exchange calculators,
FCAC credit card selector tool


U.S. currency exchanges at your bank
If you think you’d be better off taking a wallet-full of loonies to the teller at your bank and trading them for some greenbacks, keep in mind that exchange rates vary by bank. “Exchange rates used for currency conversions at the bank are set by the individual bank,” explains Payne.

“The rate at which Bank of Montreal sells U.S. dollars in our branches is based on BMO’s overall cost of acquiring and distributing U.S. dollars,” adds BMO senior manager Matt Duffin.

The table below shows the U.S. dollar cash conversion rates for six Canadian banks as of May 2014 and compares those rates against the average credit card network rate. The credit card rates are better but when you factor in the credit card forex fee, cash wins out.


BankCA$ to US$
exchange rate
Versus average
credit card
(with 2.5% forex fee) 
Versus average
credit card
(with no forex fee)
Bank of Montreal (BMO)1.120.17% lower2.33% higher
Desjardins1.130.13% higher2.64% higher
1.120.34% lower2.16% higher
RBC Royal Bank
1.130.11% higher2.61% higher
Scotibank 1.130.05% higher2.56% higher
TD Canada Trust
1.120.14% lower2.36% higher
Sources: Bank online exchange calculators or listing, interviews


Currency exchange specialists’ rates
If you head to a currency exchange booth instead of your bank to convert cash, you’ll lose even more money – enough to make credit cards the better choice. Plus, third-party exchange specialists often charge an extra commission.

Here’s a snapshot of rates that three currency exchange specialists charged for U.S. dollar conversions as of May 2014. Each provider has outlets across Canada. A Wall Street Finance representative in downtown Toronto confirmed no additional service fees or commissions apply to in-person cash exchanges, but Travelex tacks on an $8 two-day delivery fee for online orders, and International Currency Exchange (ICE) Canada adds a minimum $3.95 service charge for regular counter transactions.


Exchange specialistCA$ to US$
exchange rate
Versus average
credit card
(with 2.5% forex fee)
Versus average
credit card
(with no forex fee)
ICE-Canada.ca1.152.14% higher
+ other fees
4.69% higher
+ extra fees
1.162.74% higher
+ other fees
5.31% higher
+ extra fees
1.121.67% lower0.78% higher
Sources: ICE Canada/Travelex/Wall Street Finance online
exchange calculator, interviews


Bottom line: a credit card that doesn’t charge forex fees is your best bet. If you can’t find one of those, you may be better off a safe amount of exchanging currency – but only if you do so at a bank.

Beyond the exchange rates and fees, there are timing factors to keep in mind if you want to minimize your foreign exchange losses.

1. You might have leftover foreign currency
The above comparisons don’t address the fact that consumers often have foreign currency left over after a trip across the border. When converted back into Canadian dollars, you will lose money again. That doesn’t happen with credit card transactions because you are only converting currencies once.

2. The exchange rate might not apply right away
When a credit card’s exchange rate is applied varies by card issuer.

Most card companies, including Chase and BMO, go by the date the foreign currency transaction is posted to your account. In contrast, TD goes by the date of the actual transaction. Scotiabank credit cards convert when the merchant settles the transaction with Visa, which can be one to three days after the actual transaction.

3. A U.S. currency card might be the best choice
A U.S. currency credit card might give you more control over when the exchange rate applies. On a U.S. currency card, the transaction or balance stays in U.S. funds, so you have more control over when Canadian dollars are exchanged into American currency.

And Stefan Baumgarten, a Toronto-based analyst for the German chemical industry, says while he likes the convenience and zero-liability protection that credit cards afford travelers (not mention they’re mandatory for some out-of-country expenses, such as rental cars), he’s noticed that using a Canadian card abroad can inflate conversion charges.

“When I used my credit card to withdraw cash from a U.S. automated banking machine, I was hit by very high fees that overshadowed the reasonable foreign exchange costs,” says Baumgarten.

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