Canadian Credit Card Rules
Credit cards are convenient to use when customers find themselves short of cash for needed purchases. However, misuse of credit can cause customers to quickly amass debt they cannot pay back. In Canada, credit card companies must spell out interest rates before customers receive credit cards and inform them of how long it may take them to pay off their debt. These laws, as well as other laws regarding credit card companies' behavior, are meant to help customers monitor their credit use and make responsible financial decisions.
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Disclosure Requirements
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Canadian credit card companies must disclose all fees and interest rates on credit card applications. Credit card companies must also disclose on each bill how long it will take to pay off the total debt if the customer only makes the minimum required payment each month.
Grace Period
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Canadian law requires credit card companies to grant a 21-day grace period on new purchases after a customer pays the balance in full. This means that if the customer does not currently owe any money to a credit card company, the company cannot charge interest on new purchases until 21 days after the purchases have been made. Companies may offer a grace period of more than 21 days if they wish.
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Credit Limit Laws
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Credit card companies may not raise a customer's credit limit without the customer's permission. They also may not charge over-the-limit fees on purchases if the reason the customer has exceeded his credit limit is that a merchant has placed a hold on a transaction.
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References
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