There are several Canadian credit card disclosure rules that regulate how credit card lenders can market their products to consumers like you and me. The goal is to make sure each consumer knows exactly what the terms and conditions of a credit card are before they apply for the card! Have you ever wondered why there is so much fine print on a credit card application? Have you noticed that some information is very bold and large?
Credit Cards Must List All Their Fees
Did you know that Canada requires a credit card provider to list all of the fees that you may be charged when approved for an account? Not every fee needs to be in large print, however, so it is important to read all of the terms and conditions before finishing an application.
Information like annual fees and APR interest rates are large and up front, but you may notice small footnote symbols or numbers next to this information. This is your queue, as required by the disclosure rules, to look in the fine print for additional information.
Rewards Need To Be Spelled Out In Detail
Are you thinking about getting a rewards card? The details of a rewards program must also be provided in advance during the application process.
This means how many points you may earn, what restrictions are on the program, and informing you of any credit categories that rewards must fit into in order to qualify. You must also be informed as to how rewards points can be redeemed.
Balance Transfer and Cash Advance Rates Must Be Included Separately
Even if your credit card provider has the same APR for purchases as they do for balance transfers and cash advances, these annual interest rates must be included separately from each other.
That’s because most lenders have variable APRs that can be adjusted throughout the year, so your interest rates may be higher or lower than other customers. This rule includes any promotional interest rates as well.
Any Card Benefits Must Be Listed in Detail
Many of today’s credit cards have associated benefits with them that many people don’t even realize! From travel insurance to discounts at specific partner retailers, these benefits are considered part of the actual line of credit that you are awarded.
The details of the benefits and how you can take advantage of them are required information as part of the disclosure rules.
Application Rules Must Be Available
Whether it is a rule about how much income you need to make or how to take advantage of a guaranteed credit card, you must have access to these rules as part of the disclosure process.
These rules must be in a prominent part of the application process so you can see if you meet the qualifications of the card before applying for it. If you are denied, this counts on your credit report as a denial even though you didn’t qualify for the card, which is why this rule is in place!
A smart decision about your finances can be made when all of the information that the disclosure rules require to be provided is seen and understood.
Credit cards are a permanent fixture in America.
Make sure you know everything about a credit card before applying for it and you’ll get the perfect credit card to meet your needs! They are available for everyone who qualifies and there are certain rules that need to be adhered to. These rules were implemented when the CARD (Credit Card Accountability, Responsibility and Disclosure) Act was enacted into law.
Individuals under the age of 21 are not allowed to hold credit cards unless they can prove that they have a stable source of income. Credit card companies are prohibited from advertising to this under age group and luring them with gifts that would appeal to them like movie tickets, pizza or T-shirts.
Credit card statements must clearly state all the costs incurred by the credit card holder. There should be no hidden charges and the language used should not be too technical for card holders to understand.
Every monthly statement should show the minimum amount to be paid. The statement should have a clear indication of how long the client will take to pay the amount owed if they paid the minimum amount set every month, a calculation of how much money the card holder would have to pay to be able to finish the balance off in three years and a comparison between the two to show the savings that would be made. It should also show the total interest charged.
Notice and penalties
Credit card bills should be due on the same date every month and payment deadlines should be 5 p.m. and not earlier in the day. ‘Late fees’ should not be charged unless a notice of 21 days after mailing of the statement was given to the card holder. In the event that a card holder has to pay late fees or any penalty, the amount should be reasonable and not more than the minimum payment.
A first violation penalty has been set at $25 and if another violation occurs within six months of the billing phase, the penalty will be $35.
If a card holder opted in for an overlimit fee they will incur this cost every time they have a balance that exceeds the credit limit but this option can be revoked at any time. Charging this fee is however not allowed if there is no consent from the card holder. In the event that an overlimit fee is to be charged, it should only be applied once on a billing statement. The limits of overlimit fees are the same as those of late fees.