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Saving on Credit Cards

Which card is right for me?

The average Canadian carries three credit cards in his wallet – and that doesn’t include debit cards, gift cards, or loyalty cards. But not all credit cards are the same. For example, interest rates will also vary from card to card, and some companies will give you an extra low interest rate for your first few months. To learn more, read How interest on credit cards works.

Here are some more common ways that credit cards differ:

  • Some charge annual fees, others charge a fee if you go over your credit limit.
  • Some credit cards offer rewards, like points you can use to buy airline tickets or cars.
  • Some cards give you cash back.
  • Some cards donate part of your total purchases to charity.

There are literally hundreds of different credit and charge cards to choose from. Think carefully about how you will use your card before you pick one. Use this Credit Card Interactive Tool from the Financial Consumer Agency of Canada to help you choose.

Remember: credit cards are not a status symbol. Don’t pick an expensive gold or platinum card because you think it makes you look rich or important. Pick a card that’s really right for you.

Did you know?

Credit and charge cards are quite different.

  • Charge cards have no limit – you can spend as much as you like. You must, however, pay back what you spend each month. American Express and Diners Club are examples of charge cards.
  • Credit cards let you carry a balance. But they also limit how much you can spend. Visa and Mastercard are two of the most popular examples.

Credit cards are also very different from debit cards. If you buy something with your debit card, the money comes out of your bank account right away. If you buy something with your credit card, you don’t have to have the money right now. But the credit card company may charge you interest – sometimes a LOT of interest – and you can end up spending more to buy the same item. Want to keep more money in your pocket? Read Top five tips to save interest.