Credit card regulations in Canada

If you pay with plastic wherever you go, you’ll benefit from knowing more about how credit cards are regulated. Find out about your rights as a consumer and figure out who to contact if you feel that your credit card provider isn’t living up to your expectations.

Credit card regulations you should know about

Canadian law is designed to protect you from deceptive or fraudulent credit and debt practices that compromise your right to privacy. When you sign up for a new credit card, you should make sure that your provider ticks the following boxes.

• Contractual obligations. When your credit card arrives, it must include a credit card agreement or contract.
• Terms of reference. Features such as interest rates, fees and other charges have to be set out in an information box at the beginning of your application and contract.
• Changes to contract. You should receive details of any changes to your contract in writing at least 30 days before they go into effect.
• Credit card limits. Your provider must get your permission before raising your credit limit and provide you with written confirmation that your limit has been increased if you agree.
• Interest rates. You can’t legally be charged interest rates that are over 60% APR (including fees and charges) on your credit card.
• Credit card cheques. You must give your express consent before your provider can send you credit card cheques charged to your account.
• New cards. You must give your consent before your provider can issue you with a new credit card.

Additional requirements for credit card statements

In addition to the above requirements, your credit card provider has to issue you with a written or electronic statement every month, which needs to include the following information:

• Outstanding balance. The amount you need to pay in full by the due date to avoid paying interest.
• Terms of repayment. An estimate of how long it will take to pay off the balance in full (including interest) if you can only pay the minimum amount each month.
• Purchase information. Descriptions and amounts charged for each transaction.
• Transaction dates. The date each transaction was posted to your account.
• Total amounts. How much was credited or charged during the month.

What are my rights as a credit card user?

If you have a credit card, you have a number of rights as a consumer that you should be aware of. The following list outlines some of the main ones.

• Right to information. You’re allowed to ask for information about your account at any time, and your provider has to keep you informed via monthly statements.
• Right to privacy. Credit card companies are required to keep your personal details confidential at all times, except when disclosing information for the purpose of debt collection.
• Right to consent. Your provider isn’t allowed to send you a new card, raise your credit limit or issue you with credit card cheques unless you’ve given it permission.
• Right to change providers. You can transfer the balance on your card to another provider at any time.
• Right to protection. There are rules in place to protect you from aggressive debt collection agencies if you can’t manage to pay off your balance.
• Right to debt services. There are many credit counselling agencies that will work with you to help consolidate your debts if you can’t afford your payments.

How to report violations

If you’re having issues with your credit card provider, you can file a complaint with the Financial Consumer Agency of Canada (FCAC),and there’s no cost involved. That being said, you have to try to file a complaint directly with your bank or credit card provider and do your best to resolve it with them before contacting the FCAC.

If you run out of other options, you can contact the FCAC by email, mail or phone and they will do their best to address your questions and concerns as quickly as possible.

Finder survey: In a typical month, how much credit or retail card debt do Canadians from different provinces carry?

Tips when using your credit card

If you want to keep on top of your debt load and avoid running into trouble with your credit card provider, you can follow a couple of handy tips.

• Pay your balance in full. It’s best to pay your card off every month if you want to save money on interest and make sure you don’t end up with more debt than you can handle.
• Pay at least the minimum. If you can’t pay your balance in full, always aim to pay at least the minimum amount to avoid defaulting on your loan.
• Check your statement regularly. Keep an eye out for fraudulent activity or errors on your statement, and report discrepancies to your provider right away.
• Keep your information confidential. Make sure you only make purchases on reputable websites and don’t share your PIN or your three digit security code with anyone.
• Look into other credit options. Depending on your circumstances, it could make more sense to take out a loan or line of credit with your bank. You can also apply for credit cards with a low interest rate.

There are a number of regulations that credit card providers in Canada have to follow when they issue you with a new card. If your provider doesn’t abide by the law, then you have legal rights as a consumer that you can tap into. Find out how to protect yourself and report violations when they occur.

Frequently asked questions

• How can I cancel my credit card?

  If you want to cancel your credit card, you have to contact your provider directly. Simply cutting up the card or not using it won’t automatically cancel your account.

• What are the regulations on a joint credit card account?

  If you cosigned for a credit card with another person, every person on that account should receive a copy of the monthly statement. Your credit card issuer is also required to provide you with a joint borrower disclosure.

• Does my provider need to keep my personal information confidential?

  Credit card companies are required to keep your personal details confidential at all times, except when passing your information on to debt collectors.