Paying in Canadian dollars abroad? Why you should almost always choose the local currency

What is dynamic currency conversion?

You're paying for dinner in Paris. The terminal shows: "Pay EUR 48.00 or CAD 75.84?" If you choose Canadian dollars, the merchant (or their payment provider) does the conversion, at their own rate. That is called dynamic currency conversion.

The offer feels reassuring because you see the amount in Canadian dollars. But that comfort has a price.

Why is it more expensive?

• The merchant's rate includes a margin they set themselves. It is usually higher than the Visa or Mastercard network's.

• Your card's fees may still apply. Most Canadian cards charge about 2.5% on foreign-currency transactions, and some apply it to any purchase made abroad, even one billed in Canadian dollars. Check your card's terms.

The result: you can end up paying two margins instead of one.

An example

With made-up rates, for a €100 purchase:

Over a week-long trip, those few dollars per purchase add up.

At the ATM too

ATMs abroad often ask the same question: "Would you like a guaranteed conversion to Canadian dollars?" Say no and withdraw in the local currency. Your bank's and the ATM owner's flat withdrawal fees apply either way, so a few larger withdrawals beat many small ones.

How to pay less

1. At terminals and ATMs, always choose the local currency.

2. If you travel often, a card with no foreign transaction fee can be worth it.

3. Leave with some cash in the local currency for the first days and small purchases, so you avoid withdrawal fees on arrival.

Compare our today's rates with the Bank of Canada's daily average rate and you'll see exactly what you pay.

Frequently asked questions

Does the merchant have to give me the choice?

Card network rules require the merchant to show you the rate and get your agreement. If nobody asked and the receipt is in Canadian dollars, tell your bank.

What about online purchases in foreign currency?

Same principle: if a foreign website offers to show the price in Canadian dollars at checkout, choose the site's own currency.