Tips for Using Debit and Credit Cards in Canada

Customer paying at credit card reader in market

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Debit cards and credit cards are widely accepted across Canada; however, the extent to which you can use a foreign-issued card and the fees that apply depend on the card company and the type of account you have set up with them.

Most casual visitors to Canada should use their credit cards for purchases and make larger ATM local currency withdrawals at Canadian banks, but frequent travelers should talk to their banks about the best debit and credit cards for these purposes. Every traveler should call their bank or credit card companies in advance to inform them of upcoming use out of the country.

Keep in mind that currency exchanges often cost an additional fee if performed at a foreign bank, especially at an ATM, so it's best to limit the number of cash withdrawals you make to avoid costly fees. 

Tips for Using Debit Cards

Most debit cards issued by non-Canadian banks will not work in Canada to make retail purchases, but some debit cards issued outside of Canada will work at point-of-purchase terminals in the country. For example, a United States-issued Bank of America debit card will work at Canadian retailers, but the user does incur a three-percent foreign transaction fee for each purchase.

Note that debit cards differ from credit cards in that they draw real-time on money in your bank account. Purchases made by swiping, inserting, or tapping your card and entering a pin number on a terminal will have those funds withdrawn. In Canada, these terminals operate on the Interac network, a network specific to Canada, which means they can't access this information or charge your account in real-time.

Even if your debit card does not work for point-of-sale purchases, it can be used to withdraw Canadian currency from ATMs in Canada. Withdrawal and exchange rate fees usually apply but will vary depending on your bank, so try to make cash withdrawals at major banks where user fees are not quite as hefty as at the small ATMs you find at retail outlets (like stores and restaurants), which typically add a three-to-five-dollar fee per transaction.

If you travel to Canada frequently, you may want to check with your bank about setting up an account that does not ding you for extra withdrawal and currency exchange fees when out of the country. For example, State Farm Bank offers a debit card that allows its users to take money out of ATMs in foreign countries without charging these fees.

Tips for Using Credit Cards

Major credit cards are accepted at all retailers across Canada, with Visa and MasterCard being the most common, but some exceptions include Costco Canada, which only accepts cash or MasterCard and Walmart Canada, which no longer accepts Visa credit cards as of fall 2017.

Foreign-issued credit cards incur foreign transaction fees for their users unless you choose one of the few like those offered by Capital One that waives these fees, so it might be beneficial if you're vacationing in Canada for a short trip to just withdraw a one-time lump-sum of cash and use it at all retailers, vendors, and restaurants. 

Be sure to call ahead and inform your credit card company that you will be spending money outside of the country, especially if you've never traveled outside of the United States with your current credit cards, as your credit card company might put an emergency hold on your account for "suspicious activity" if you start spending in a place you've never been.

Calling your credit card company to fix an account that's accidentally on hold once you're in Canada also incurs an additional fee on your phone bill, so try to avoid this hassle by planning ahead!