Credit Cards

Having the right information about credit cards and how they work is key to making them work for you. There is a lot of choice in the type of cards available and in the benefits they provide. Using credit cards wisely is important to avoid money problems and to build a strong personal credit history.

A credit card is a convenient and flexible payment tool accepted at millions of locations worldwide in more than 200 countries and territories. There are several benefits to using a credit card as a payment tool:

  • If you pay your full outstanding balance by the due date, any purchase made during the current billing cycle is interest-free.
  • The card may offer insurance coverage for purchases if the item is damaged, stolen or not delivered within 90 days.
  • Fraud protection with zero liability to you in cases of fraud.
  • Some cards also have other rewards and benefits such as travel points, rental car insurance, travel insurance, cash back options and extended warranty programs.

Banks offer consumers a variety of credit cards. You can choose:

  • a standard card without an annual fee
  • a premium card that offers rewards and features and that may have an annual fee
  • a low-rate card if the interest rate is important to you. There are many low-rate cards on the market and over 30 of those cards have an interest rate under 13 per cent.

It’s important to shop around for the card that best meets your needs. The Credit Card Comparison Tool from the Financial Consumer Agency of Canada (FCAC) makes this easy.

For longer-term borrowing requirements, a term loan or line of credit may be a better choice because the interest rate is typically lower.


There are more than 30 low interest-rate cards on the market that have an interest rate of less than 13 per centcredit card front and back


Using Credit Wisely

It is easy to pay for purchases on a credit card, but it’s important to keep track of your purchases so you don’t inadvertently overspend. Here are some guidelines for keeping control of your spending and making credit work for you, not against you.

  • Make a budget for yourself and stick to it. Make sure that you know how much you can afford to spend and don’t go over that limit. That way you will avoid nasty surprises when you receive your credit card statement.
  • Avoid impulse buying. If you had to pay in cash, would you be making this purchase?
  • Keep track of all your credit purchases. Save the receipts to keep track of what you’ve spent and check them against your monthly statement.
  • Always read and understand credit application forms before you sign them.
  • Be sensible about the number of credit cards you use. How many do you really need? Are you using them simply because you have them?

Debit Cards

Unlike a credit card, where you are borrowing money to pay for a purchase, debit cards withdraw money directly from your bank account when you make a purchase or use your debit card at an ABM.

Using debit cards has become a way of life for many Canadians. In fact, Canadians are among the biggest per capita users of debit cards in the world. Whether you’re withdrawing cash from an ABM or tapping your card to make a payment, your debit card is a simple way to access the money in your bank account. Some financial institutions even offer the service of using your debit card to make online purchases. More information about making purchases with your debit card can be found on the Financial Consumer Agency of Canada website.

Depending on how many debit card transactions you make each month, there are a number of bank account options to choose from, including low-fee and no-fee accounts that offer at least 12 debit transactions per month.

It’s easy to find the bank account package that best meets your needs using the online interactive Account Comparison Tool available from the Financial Consumer Agency of Canada (FCAC).


While the use of cheques has been declining with the growing popularity of debit, e-transfers, mobile and credit card payments, financial institutions in Canada still process millions of cheques every year.

When you write a cheque to pay for a purchase or a service, you are asking your bank to transfer those funds to an individual or organization. This process can take a few days, but for most cheques, the bank will make the funds available to the person or organization you are paying right away. Here are some things to consider when using cheques:

  • Cheque holds - Generally, if the account is subject to a cheque hold period, the bank must make $100 available immediately. Subject to a few exceptions, the maximum hold period for cheques equal to or less than $1,500 deposited to a Canadian dollar account is four business days.
  • Non-sufficient funds (NSF) charges - If you deposit a cheque and there is not enough money in the cheque-writer’s account to cover the cheque, the cheque will be returned to your bank noting there are non-sufficient funds. If your bank had given you immediate access to the funds, it will then remove the funds from your account. If you were the cheque-writer, your financial institution will charge an NSF fee. You can avoid these fees by ensuring there is enough money in your account to cover the cheques that you write.
  • Stop-payments - A “stop payment” request is a service provided by your bank, usually for a fee, to prevent a cheque you wrote from being cashed. However, putting a stop payment on a cheque does not guarantee that the funds will not be withdrawn from your account. For a stop payment to work, your request must be made and processed before the cheque is cashed. If a stop payment doesn’t work and your cheque is cashed, you are still responsible for the cheque. To get the money back, you will have to contact the person or organization to whom you wrote the cheque.
  • Mobile Cheque Deposit - Many banks now offer a new way to deposit cheques. Mobile, or remote, cheque deposit allows you to take a picture of your personal cheque, business cheque or money order (depending on the bank) and deposit it electronically using your mobile device. Many banks in Canada now offer this service.

    You’ll need to sign the back of your cheque and then log into your bank’s mobile banking application, choose the picture deposit service and follow the instructions. The process is secure and your financial information is not stored on your mobile device. All financial information is also securely encrypted. You can then write “deposited” on the cheque and store it in a secure place for a short period of time (two weeks is generally recommended) before destroying it.

The Canadian Bankers Association website has more information about using cheques.

Mobile Payments and Mobile Wallets

Banks offer mobile banking and payment services and apps that allow customers to perform a variety of transactions through their mobile devices, including making payments.

You can store your payment card information in a mobile wallet so you can make contactless payments from your debit card, credit card or prepaid card from your phone.

The COVID-19 pandemic changed Canadians’ payment preferences and more and more Canadians are using digital and contactless payment methods as their primary method of paying for goods and services and plan to keep those habits long-term.


If you have general questions about banking in Canada, call the Canadian Bankers Association’s Banking Information Line at 1-800-263-0231 or send an email to
(Please note that if you believe that you have been a victim of fraud, you should contact the police and your bank immediately.)