Cash-back credit cards offer valuable financial benefits to households in Canada. Families can effectively reduce their overall expenses by earning a percentage of their spending back as cash, freeing up funds for other essential needs. These cards provide a tangible and straightforward way to maximize savings, making them a practical choice for everyday purchases.

While credit card offers may seem straightforward, they come with crucial details hidden in the fine print. While you don’t need to dive into every detail, ignoring them completely could lead to surprises later. The specific terms to focus on vary based on the card type and your usage intentions. It’s a smart move to review these points before you decide to apply for a credit card.

Here’s how you can navigate the fine print.

Finding the Terms and Conditions

You can find a credit card’s fine print in its terms and conditions or cardholder agreement, covering fees, rates, eligibility requirements, and reward program rules. Important rates and fees are often upfront, even in your monthly statements. Details about the rewards program might be lower or linked to the card issuer’s website.

Also, don’t forget to review the application page’s fine print to understand introductory offer requirements and restrictions, as they can vary based on direct application, referrals, or partnerships. Let’s look at the main points to review in the terms and conditions.

Annual Fee

You can easily spot a card’s annual fee on the application, credit card reviews, and the cardholder agreement. Typically, this fee is due when you first acquire the credit card—though some cards may waive it in the first year to entice new applicants—and then annually on each cardholder’s anniversary.

If the annual fee doesn’t justify the benefits, you can close the card before your cardholder’s anniversary to avoid the next charge. Alternatively, you might close it shortly after the fee is applied and receive a refund. Be sure to check the fine print, especially if it’s a new credit card, as some issuers could retract initial offer rewards if you close the card within the initial 12 months.

Purchase Annual Percentage Rate (APR)

The purchase APR of your card governs the interest applied to your credit card’s purchase balance. Paying your bill in full each month usually prevents interest accumulation. However, if you carry a balance, interest accrues on the unpaid amount from the prior billing cycle. Furthermore, interest begins immediately on new purchases until your card is completely paid off.

Many credit cards feature a variable APR, subject to automatic adjustments tied to benchmark rates. Rising interest rates might lead to an increase in your card’s purchase APR. If you maintain a balance, monitor your card’s rate and explore options to lower your APR.

Balance Transfer Fee

When you transfer a balance to a credit card, you’ll usually encounter a balance transfer fee. This fee typically ranges from 3% to 5% of the transferred amount, with a minimum of $5 to $10 per transfer. Check your card’s terms for specific fee details and its application.

Occasionally, the introductory balance transfer APR may present a promotional balance transfer fee for transfers executed shortly after card opening. As you evaluate various balance transfer card options, factor in the fee costs and potential savings over the promotional duration.

Foreign Transaction Fee

When you use a credit card outside of Canada or make online purchases in foreign currencies, you might encounter foreign transaction fees. These fees can differ but typically hover around 3% of the transaction total. Certain credit cards, especially premium and travel cards, are exempt from foreign transaction fees.

Reward Program Categories

Credit cards in Canada often offer bonuses for common spending categories like travel, dining, gas, and groceries. But each card issuer might define these categories differently. For example, one issuer might include taxis, tolls, parking, and campgrounds in their travel category, while another could focus on airfare, rental cars, cruises, and hotels.

Keep in mind that there could be exceptions, like excluding purchases from non-Canadian merchants in a category or gas bought from warehouse clubs or supermarket stations. Sometimes, specific stores might not count for bonus rewards, but you’ll still get the regular rewards for those purchases.

Extra Cardholder Perks

Credit cards also come with various purchase and travel benefits in Canada. However, not all these benefits may be as comprehensive as they initially appear. It’s crucial to fully grasp how these perks function to avoid assuming coverage that may not exist.

For example, rental car insurance often acts as secondary coverage, and the credit card benefit typically extends to rental car damage or theft. In case of an accident while driving a rental car, you might need to first file a claim with your auto insurance. Moreover, the credit card benefit doesn’t extend to liability claims for causing harm to others or damaging their property.

Rules for Statement Credits

Certain credit cards provide statement credits to help reduce specific expenses, like airline fees or delivery app charges. It’s essential to carefully review the fine print to understand which purchases qualify and the mechanics of this benefit. While a website might advertise an annual amount you can receive, remember that you’ll receive a monthly statement credit that needs to be utilized each month to avoid losing it.

Where to Apply for Premium Credit Cards?

Now that you understand the details, it’s time to apply for a cash back credit card and enjoy great deals. But finding the right card is important. That’s where Great Canadian Rebates comes in. We’re an online platform that helps you compare different credit cards available in Canada and choose the best one for you.

We’ve partnered with top financial merchants to give you plenty of options. Our platform is regularly updated with the latest offers, rebates, and exclusive sales. You can easily find and compare travel credit cards and the best Canadian cashback credit cards to make your purchases more valuable.

Visit our website today for more information.