New regulations that apply to credit cards and loans offered by federally regulated financial institutions are now in effect. The regulations enhance consumers' access to clear information about key details of these financial products, such as interest rates, fees and penalty charges. They also strengthen consumers' rights by limiting certain business practices of financial institutions
Below are some of the key provisions of the new regulations, a brief explanation and the date they came into force. You can also view background information and a complete list of the new regulations of the new regulations.
Federally regulated financial institutions have to include an information box at the beginning of credit card applications and credit agreements. The content of the boxes will vary depending on the financial product, but generally they must clearly set out key features of the application or agreement, such as interest rates, fees and penalty charges.
Federal regulations set out the way the information box must be presented. The language and presentation of this information has to be clear and can't be misleading.
Follow this link for an example of what an information box would look like and what information has to be included.
Federally regulated financial institutions have to get your consent before they can increase your credit card limit. If you give verbal consent, the institution must provide confirmation in writing no later than your next statement.
A federally regulated financial institution can't charge you a fee for going over your credit limit because of a temporary hold of funds on your credit card. This restriction does not apply if you make a purchase that puts you over your limit in any case during the time the hold is in effect.
Debt collection practices for federally regulated financial institutions are subject to new regulations.
Debt collection regulations govern what debt collectors can and can't do when they try to collect money from you.
If you, together with another person (s), apply for a loan from a federally regulated financial institution, the institution must provide key information to all borrowers. However, there are two exceptions to this regulation that allow a financial institution to provide disclosure to only one borrower:
When joint borrowers give verbal consent, the financial institution must provide confirmation in writing to the borrower without delay.
The grace period on new purchases made with credit cards will be a minimum of 21 days. That means that you don't have to pay any interest on new purchases for 21 days after the statement date if you pay your balance in full by the current month's due date. This provision will apply even if you are carrying a balance from the previous month.
Some credit card accounts have different interest rates for different types of transactions, such as retail purchases, cash advances and balance transfers. When you make the minimum payment on your credit card account, federally regulated financial institutions can apply the minimum payment portion of your payment however they like. Usually they will apply it against the portion of your balance with the lowest interest rate.
However, under the new regulations if you pay more than the minimum amount, the additional amount of your payment now must be applied in one of the following two ways:
Federally regulated financial institutions have to include the following information in your credit card statements:
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Credit cards can be very convenient, but it's important to keep in mind that when you apply for a credit card, you are entering into a contract. Like any contract, it is legally binding and gives each party certain rights and responsibilities.
There are rules that federally regulated financial institutions have to follow to make it easier for you to understand the terms of your credit card contract. This publication will give you a brief overview of some of those rules.
Note: In this publication, the term "credit card issuer" refers to a federally regulated financial institution.
Choosing the right credit card for you can be a challenge. There are hundreds of different credit cards to choose from, each offering a different combination of interest rates, fees, benefits and rewards. Taking some time to shop around and weighing your options carefully can help you find a credit card that suits your lifestyle and budget.
Just as different credit cards have different interest rates, rewards and benefits, the fees charged on credit cards can vary from one credit card to another.
You can avoid many of those fees by making smart choices. Understanding how fees work will help you to shop around for a credit card that suits your needs, and reduce your costs at the same time.
Federally regulated financial institutions, such as banks, are required by law to tell customers about the fees they charge. The credit card application forms they distribute must have this information in an information box at the beginning of either the application, or a related document that you receive at the same time. When you enter into the contract, the credit card issuer must tell you about these fees in your credit card agreement. The issuer must also inform you each time it changes the fees.
The Credit Card Balance Insurance comparison table explains how credit card balance insurance works and whether or not it might be beneficial for you to obtain coverage. This document also lets you compare the features of credit card balance insurance products offered by various credit card issuers.
The Financial Consumer Agency of Canada (FCAC) provides a wide range of tools with information about financial products and services. All of FCAC's publications are free of charge. To order a print version of our publications, click here. Please allow up to three weeks for delivery.