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I will visit Toronto this summer. I have a US VISA credit card and a US MasterCard debit card. Do stores there usually accept these two cards? If so, which one has the cheaper transaction fee, or are both expensive and it's better to use cash?

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Almost all stores will accept both these cards. Mastercard and Visa are accepted everywhere credit cards are accepted in Canada which is most places. Some stores are cash-only or debit only but not many of them are left.

Whichever one will have the lowest fee will depend on the particular card you have. When you got each card, it will have come with a cardholder agreement. On it, each one will specify the foreign transaction fee charged. This is a percentage of the sale, usually around 2.5% but there exists cards with 0% and I have seen up to 3.5%. If you no longer have the agreement, go to the website of each bank that issues your cards and look for the information there.

It is good to have cash for things like bus fares and small items but getting cash only means that you paid the transaction fee ahead of time when you did the conversion. You usually would have to pay it again even to convert unspent foreign currency, although some places have a buy-back contract that lets you get back converted currency up to a certain number of days after you converted with them.

Debit card transactions on the other hand do not usually work between Canada and the US. You may use your US debit card to withdraw cash from most Canadian ATMs which will give you a good rate plus some fees. For small withdraws fees are usually steep since there is often a flat amount plus a percentage.

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    Note: the debit-only places won't take US debit cards since they function through the credit card network in Canada. Canadian debit cards are on the Interac network and do not work on the credit card network. (Some banks have credit-card-like debit cards now too but they function on Interac in Canada, and using the credit card network when outside the country.)
    – Jim MacKenzie
    Commented Apr 8, 2018 at 21:17
  • @JimMackenzie I've found that a lot of places that have "no credit" signs actually do accept my card if I ignore the sign and just swipe my credit card. But maybe that's just in Vancouver.
    – JonathanReez ♦
    Commented Apr 9, 2018 at 3:24
  • There are a couple of good no-annual-fee credit cards that have no foreign transaction fee -- the Barclay Uber Mastercard comes to mind (and it has pretty good cash back rewards, too). I myself use the First Tech FCU Platinum Mastercard, because it has true chip+PIN, which means it's guaranteed to work everywhere in Europe.
    – Ivan X
    Commented Apr 22, 2018 at 15:41
  • I was in Canada this September and October and felt no need whatever to have cash. Everywhere took my US debit cards without a problem, except for a few places without contactless where I had to use chip+signature. Of course I'm lucky and have a rare US debit card with contactless, too, which also worked perfectly and I did not have to sign. Google Pay with the same card worked as well. I did not use any buses though.
    – Michael Hampton
    Commented Dec 18, 2018 at 17:04

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