Financial Consumer Agency of Canada

Financial Consumer Agency of Canada

February 22, 2008 14:09 ET

FCAC Issues Updated Credit Cards and You

Agency advises consumers who occasionally carry a balance to be aware of their card issuer's interest calculation method

OTTAWA, ONTARIO--(Marketwire - Feb. 22, 2008) - The Financial Consumer Agency of Canada (FCAC) today announced the latest update of its popular credit card guide, Credit Cards and You, which provides consumers with a wealth of information on the fees and features of more than 200 credit cards available in Canada. The Agency also reminded consumers who occasionally carry a balance that it is important to shop around for a credit card that suits their payment habits.

"If you occasionally carry a balance, the amount of interest you end up paying can vary significantly depending on the credit card you use," said FCAC Commissioner Ursula Menke. "I invite consumers to use our on-line credit card comparison tool to check the interest calculation method used by their card issuer, shop around and save money."

There are typically two interest calculation methods used by credit card issuers in Canada. Under one of these, it takes longer to re-establish the interest-free period on purchases once a consumer has lost it by failing to pay a credit card balance in full and on time. That is, after failing to pay a balance by the due date, a cardholder must pay the balance in full and on time for the two following statements to re-establish the interest-free period on new purchases.

Under the other method of calculating interest, a cardholder can re-establish the interest-free period after only one payment of the balance by the due date.

Consumers who occasionally carry a balance could be affected the most - in terms of the interest charges they will have to pay - by the difference between the two methods.

Issued twice a year, Credit Cards and You summarizes the costs, benefits and rewards of more than 200 credit cards in Canada. The guide is available as an interactive on-line tool on the FCAC Web site (www.fcac.gc.ca or moneytools.ca). To request a print copy, call FCAC toll-free at 1-866-461-3222 (or 1-866-914-6097 for TTY service, for the deaf or hard of hearing).

FCAC ensures compliance with the consumer protection laws, and monitors codes of conduct and public commitments that apply to banks and federally incorporated trust, loan and insurance companies. FCAC also provides consumers with accurate, objective information about financial products and services, and informs Canadians of their rights and responsibilities when dealing with federally regulated financial institutions.

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