Is American Express Accepted in Canada?

American Express cards are accepted in Canada, though not with the same universal reach as Visa or Mastercard. Many major businesses, particularly those catering to tourists, readily accept American Express. However, consumers may encounter limitations at smaller establishments. Preparing for such instances by carrying an alternative payment method is a practical approach for travelers.

General Acceptance and Common Merchants

American Express cards enjoy broad acceptance across Canada, especially with major retailers and service providers. This includes large hotel chains, national airlines, and car rental agencies. Many major department stores, international retail chains, and upscale restaurants also welcome American Express for transactions. For example, retailers like Hudson’s Bay, IKEA, Walmart, and Apple Store accept American Express.

The acceptance extends to many popular grocery store chains such as Sobeys, Metro, Safeway, and Whole Foods Market. Additionally, numerous quick-service restaurants and coffee shops, including Tim Hortons, Starbucks, McDonald’s, and Burger King, accept American Express. In tourist-heavy areas and major cities, American Express is generally a reliable payment option.

Situations Where Acceptance May Be Limited

Despite its growing acceptance, there are scenarios where American Express cards might not be a viable payment option in Canada. Smaller, independent businesses, local cafes, and some specific grocery store chains often do not accept American Express. For instance, major Canadian grocers under the Loblaws banner, including Real Canadian Superstore, Shoppers Drug Mart, and No Frills, typically do not accept American Express due to their own credit card partnerships. Similarly, Costco Canada maintains an exclusive partnership with Mastercard, meaning American Express is not accepted there.

The primary reason for limited acceptance stems from the higher interchange fees American Express charges merchants compared to Visa or Mastercard. These higher transaction costs can impact a business’s profit margins, leading smaller operations to opt out of accepting American Express. Therefore, it is advisable for cardholders to carry a Visa or Mastercard, or local currency, as a backup, particularly when patronizing smaller establishments or those outside major urban centers.

Understanding Currency Exchange and Fees

When using a U.S.-issued American Express card in Canada, transactions made in Canadian Dollars (CAD) are converted to U.S. Dollars (USD). American Express, like other card networks, determines the exchange rate applied to these transactions. While these rates are generally competitive and close to the market rate, they may include a small markup.

A foreign transaction fee is typically applied to purchases made in a foreign currency. For most American Express cards, this fee is around 2.5% to 2.7% of the transaction amount. This fee is added on top of the currency conversion rate and can accumulate, especially on larger purchases. Some American Express cards, particularly those co-branded with Canadian banks like Scotiabank, may offer no foreign transaction fees. When offered Dynamic Currency Conversion (DCC) at the point of sale, it is generally more financially advantageous to pay in Canadian Dollars (CAD) rather than U.S. Dollars (USD), as DCC often involves unfavorable exchange rates and additional markups.

Using American Express for Cash Withdrawals

Most consumer American Express credit cards do not offer direct cash withdrawals from ATMs in the same manner as Visa or Mastercard credit cards through a widespread cash advance network. While some American Express credit cards may offer a cash advance feature, it typically requires prior enrollment and a Personal Identification Number (PIN). If available, cash advances on American Express credit cards are subject to immediate interest accrual, often at a higher rate than purchases, and can incur cash advance fees and ATM operator fees.

Cash advances typically involve a fee and interest, often at a higher rate, starting from the transaction date. These withdrawals are generally a costly method for obtaining local currency due to the combination of fees and interest. For obtaining cash in Canada, using a bank-issued debit card at an ATM or exchanging currency at a financial institution typically presents a more economical alternative.