Canadian Bankers Association

Canadian Bankers Association

January 17, 2008 16:39 ET

Canadians Benefit From Competitive Credit Card Market

73 per cent of Canadian households pay off their credit card balance in full every month

TORONTO, ONTARIO--(Marketwire - Jan. 17, 2008) - Credit cards are a convenient payment tool for Canadians, who benefit from a competitive credit card market in Canada, the Canadian Bankers Association (CBA) said today in response to the NDP's criticism of credit card interest rates.

"Today's announcement by the NDP demonstrates an unfortunate lack of understanding about the benefits that Canadians get from a competitive credit card market," said Nancy Hughes Anthony, President and CEO of the Canadian Bankers Association.

In fact, most Canadians pay no interest on their credit cards. A 2005 survey by Statistics Canada found that 73 per cent of Canadian households pay their balance off in full every month - more than in the UK, the US, or Australia. For those who do carry a balance, banks and other financial institutions offer low rate credit cards with rates in the nine per cent to 15 per cent range. In addition, a credit card balance can be converted into a consumer loan or line of credit, often with a lower interest rate than on a regular credit card.

"With over 550 institutions offering major credit cards, there is a lot of choice and competition in the marketplace, and that puts the consumer in control," said Ms. Hughes Anthony. "We recommend that consumers shop around to find the credit card with the mix of interest rates, rewards and other features that best meet their needs."

The Financial Consumer Agency of Canada has a publication, Credit Cards and You, and an online tool that compares the features of different credit cards in Canada, both of which can be accessed on their website at www.fcac.gc.ca.

Increased credit card regulation would work against consumers' interests. International evidence in general on interest rate ceilings is clear - they do not reduce the cost of credit but rather simply restrict credit to all but the best credit risks and stifle innovation in credit products.

Banks play an important role as major contributors towards achieving a strong economy for Canada. Banks are the biggest service industry contributor to the GDP - contributing 3.57 per cent in 2006. Bank financial groups also employ more than 249,000 people in this country, an increase of 15.5 per cent over the past ten years, and paid $6.4 billion in taxes in 2006 to all levels of government, which helps support many government and social programs.

The Canadian Bankers Association works on behalf of 54 domestic chartered banks, foreign bank subsidiaries and foreign bank branches operating in Canada and their 249,000 employees to advocate for efficient and effective public policies governing banks and to promote an understanding of the banking industry and its importance to Canadians and the Canadian economy.

Contact Information

  • Canadian Bankers Association
    Melanie Minos
    (416) 362-6093, ext. 220 or Cell: (416) 587-7733
    Email: mminos@cba.ca