Credit Card Fees in Canada: Every Fee a Card Can Charge

Interest is the cost most people think of with a credit card, but a card can also charge a range of fees, some yearly, some per transaction and some only when something goes wrong. The Financial Consumer Agency of Canada (FCAC) puts it simply: “Different credit cards have different fees.” Every fee a card charges is set out in its application and cardholder agreement. This page goes through each kind of fee, what triggers it and the usual ways around it. It is part of our credit card basics guides.

Annual fees

FCAC: “Financial institutions may charge an annual fee for some of their credit cards. Usually, the charge will appear on your credit card statement once a year. Cards with an annual fee usually offer extra rewards and benefits or a lower interest rate.”

Cards range from no fee to several hundred dollars a year. A few examples from our card data:

Avoiding it. A card with no annual fee avoids the charge altogether, and FCAC notes that “Some no-fee credit cards offer similar rewards and benefits to cards that do have an annual fee.” Whether a fee is worth paying depends on what you’d earn or save: FCAC’s own test is to estimate a year’s rewards and subtract the fee. Our no annual fee card picks list the no-fee options, and the credit card comparison shows each card’s fee side by side.

Additional cardholder fees

“You may have to pay an additional annual fee if you request a card for an additional cardholder. The fee for the second card is typically lower than it is for the first card,” FCAC says. The table above shows a few cards’ fees. Some cards charge nothing for extra cards. How an extra card works for the other person is covered in authorized user vs joint credit card, and what it does for their credit in being an authorized user.

Foreign currency conversion charges

When you pay in another currency, the issuer converts the amount to Canadian dollars and then adds a conversion charge as a percentage of it. FCAC’s example: a €1,000 purchase converted at 1.45 is $1,450, and a 2.5% conversion rate adds $36.25, for a total of $1,486.25. A 2.5% charge is common among the cards in our data (it’s also the rate in FCAC’s example), while some cards charge none: the Scotiabank Passport Visa Infinite+, for example, lists a foreign transaction fee of 0%.

Avoiding it. A card with no foreign transaction fee, or a U.S. dollar card for frequent U.S. dollar spending, which FCAC says can help you “avoid having to pay foreign currency conversion rates.” Our no foreign transaction fee card picks compare them. Refunds on foreign purchases can come back at a different exchange rate than the original charge.

Cash advance fees

Taking cash on a card usually costs a fee each time, set as a fixed amount, a percentage or both, plus interest from the same day with no interest-free period. The fee is higher outside Canada, according to FCAC. The full cost, the limits and the alternatives are in credit card cash advances.

Balance transfer fees

“A balance transfer fee is usually a percentage of the amount that you transfer,” FCAC says; with a 3% fee, moving a $1,000 balance costs $30. The interest saved has to outweigh that fee, and a promotional rate usually lasts only for a set period. The balance transfer calculator works out whether a transfer saves money after the fee, and our balance transfer card picks compare the offers.

Over-limit fees

Going over your credit limit can cost an over-limit fee. FCAC: “If you go over your limit, you may have to pay an over-the-limit fee. Federally regulated financial institutions can’t charge over-the-limit fees in certain situations. For example, if a merchant puts a temporary hold on your credit card that goes over the credit limit.” A gas pump hold of $100 when you have $90 of room and spend $20 is FCAC’s example of a case where the fee can’t be charged.

Avoiding it. FCAC suggests asking the issuer to stop transactions that would go over the limit (not every issuer offers this, and some low-value transactions may still go through), setting up low-credit alerts, or asking for a higher limit. An issuer must get your express consent before raising your limit. If a purchase is refused at the till instead, why a credit card gets declined covers the usual reasons.

Late and missed payment costs

Missing the minimum payment or paying late doesn’t only risk a fee. FCAC lists “your interest rate increasing”, damage to your credit score, the loss of any promotional rate and the issuer cancelling the card. A card’s late payment terms are in its agreement. What happens if you miss a credit card payment covers each consequence, and minimum payments explains how the minimum is calculated.

Dishonoured payment fees

A payment that bounces can cost a fee. FCAC says this applies if you pay by credit card cheque and it’s returned for non-sufficient funds (NSF), if a pre-authorized debit payment is rejected for NSF, or if you use a credit card cheque for a cash advance that goes over your limit. Paying from an account with enough money in it on the payment date avoids it.

Reprinting fees

“Your financial institution may charge you when you ask for copies of certain documents,” FCAC says, such as reprinted statements or receipts from earlier statements. Online statements usually avoid the charge; FCAC notes institutions “usually allow access to online statements for the previous 12 months.”

Inactive account fees

“Some financial institutions will charge an inactive account fee if you don’t use your credit card for a long time,” according to FCAC, which adds that an institution “may even close your account if your card is inactive for a year.” An occasional small purchase keeps the card active. Closing an unused card instead has its own effects, described in how to cancel a credit card.

Balance insurance premiums

Credit card balance insurance, sold as an add-on, charges a premium on the card. FCAC lists it among a card’s possible fees. It is separate from the travel and purchase coverage some cards include at no extra charge, which credit card insurance explained covers.

Merchant surcharges

A merchant can add a surcharge for paying by credit card, except in Quebec. FCAC: “Your purchase may cost you up to 2.4% more. They must inform you of the surcharge before processing your payment.” The surcharge must be shown at the point of sale, at the store entrance and on the receipt. Paying another way, or at another merchant, avoids it.

Secured card set-up fees

Some secured cards add a one-time set-up fee to the deposit; should I get a secured credit card covers the costs, and our secured credit card picks compare deposits and fees.

Where to find a card’s fees

A card’s fees are set out in the information box included with the credit card application and in the cardholder agreement, and the monthly statement shows any fee charged that month. The other main cost of a card, interest, is explained in how credit card interest works.