Consumers can use credit cards in many ways. Here are some of the most popular ways credit cards are used in Canada:

• Payment for online purchases
• Payment for groceries
• Purchases of airline tickets
• Payment at restaurants
• etc.

Credit cards extend the owner of the card a line of credit. This credit can range anywhere from $1,000 to over $50,000. As the owner of the credit card makes a purchase, they build a balance on that card. The cardholder usually enjoys a “grace period” to pay off the card without incurring interest. However, after a set number of days, the balance will incur an interest charge.

Interest rates are how the banks, the issuers of the credit, make their money. Some of these interest rates can range as high as 29.99%. That means that if you carry $2,000 on your card, then you can be charged up to 29.99% a year or almost $600 per year in interest fees alone. That’s why it is important to pay off credit card balances as soon as possible.

Each month, the credit card company will send you a statement that will show your current balance, your recent purchases and your recent payments. This monthly statement may either be sent by mail or may be sent electronically to your online account.

Your statement will tell you your minimum balance due and by what date that the payment needs to be received by the credit card company.

A credit card will usually require that a minimum payment is made each month. If that minimum payment is not made, then the credit card owner will have to pay a late fee on top of the interest rate charges.

In addition to late fees, there are also many other fees that a credit card company can charge:

• Annual fees – This is a fee that is charged to keep the credit card open each year.
• Cash advance fee – This is the fee for withdrawing cash from an ATM.
• Finance charge – This is the charge based on the interest rate on the card when the balance is not paid off within the card’s “grace period.”
• Balance transfer fee – This is a charge you can receive when you transfer the balance from one card to another. People will tend to transfer a balance from a card with a high balance to a card with a lower balance.
• Over-limit fee – This is a fee charged by a card if you charge more than the available credit line on your card.
• Expedited payment fee – If you are making a payment close to your payment due date, you can request that your payment be expedited. Usually, an expedited payment fee is less expensive than a late fee.
• Foreign transaction fee – A foreign transaction fee is a charge when you make a foreign currency purchase.
• Returned payment fee – if you attempt to make a payment and your account does not have enough money to cover the payment, then your payment can be returned, and you will incur a returned payment fee.
• Card replacement fee – If you lose your card and request a physical card replacement, you may be charged a fee.

One of the major conveniences of owning a credit card is that you can access cash when you need it. You can get a cash advance from an ATM either in the credit card network or out of the credit card’s network. When you get a cash advance, then you will have to pay a cash advance fee. Also, you will incur a fee from the owner of the ATM. While cash advances can come in handy, they can become costly if done regularly.

Your credit card payments are applied to balances as they appear on your monthly statement. Therefore your payment will not be applied to new transactions.

If you wish to close a credit card account, then you will need to contact the customer service department of the credit card issuer. At that point, you will need to make sure that your balance is completely paid off.

It is important to note that the length of your credit history is factored into your credit score. The longer you have a credit account open, the better for your credit score. Therefore, seriously consider if you need to close any credit card account.

There are several options for finding credit cards in Canada, and that’s why you are at the right place with ratesopedia! Be sure to find the credit card that best fits your needs. With the right research, you should find the credit card that is right for you.