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How much does a credit card cost?

Credit card costs and fees can affect your bottom line.

Before you get a credit card, make sure you understand all the associated costs and fees. The most common cost you’ll encounter is an annual fee, but even no-annual-fee cards have associated fees. It’s not always easy to tell what those fees are and when you’ll face them.

How much does an annual fee credit card cost?

There’s a wide range of how much a credit card with an annual fee can cost. Generally, the more perks, features and benefits it has, the higher its annual fee. So, while a simple cashback credit card might run you $50 to $100 a year, a top tier travel card can reach as high as $500+.

A higher annual fee can net you a wealth of useful benefits that make up for the cost of the card. For example, the American Express AIR MILES Reserve Credit Card offers hundreds of dollars of statement credits on common travel expenses each year, as well as other perks such as access to luxurious airline lounges. The Scotia Momentum Visa Card, on the other hand, has a $39 annual fee after the intro period and simply offers a solid intro APR, solid cash back rewards, discounts on car rentals and purchase protection.

What are some other credit card costs?

Aside from an annual fee, credit cards can carry a variety of other costs, such as foreign transaction fees, or penalties for misuse. Here are some common fees you may encounter:

  • Interest. If you carry a balance on your credit card, you’ll need to pay off the interest that accrues as a result. This interest is determined by your card’s purchase APR.
  • Foreign transaction fees. A card may charge a percentage of your purchase toward a transaction made outside of Canada. This is usually around 1-3% of the purchase.
  • Balance transfer fee. If you transfer a balance to a new credit card, you may have to pay a flat rate or percentage of the amount transferred.
  • Cash advance fee. Some cards charge a flat rate or percentage fee based on the cash advance amount you take out.
  • Late payment fee. If you fail to make a monthly payment on time, you can expect a penalty fee. These are typically around $25 to $38 tacked on to your balance.
  • Finance charge. This is the interest that accrues if you don’t pay your balance in full each month.
  • Over-limit fee. You might get slapped with an over-limit fee if you make a purchase that pushes your account over your credit limit.
  • Returned payment fee. Some cards may charge a penalty fee if a payment you make to your card is rejected or returned for any reason.

How to keep costs down

  • Make your payment on time every month
    One way to avoid interest fees is to pay your balance in full each month. It can help to calculate all of your finances before making any purchases on credit to ensure you can pay it off.
  • Make payments earlier than the due date
    Late payment fees are usually around $25-$38 depending on your issuer. Another fee that comes with credit card use is a bounced cheque fee, which can be as high as $50. This happens when you send out a cheque with insufficient funds in your account. To avoid these fees, make your credit card payments a priority and pay them off earlier than their due date.
  • Avoid cash advances.
    A cash advance fee will appear on your monthly statement if you withdraw money from an ATM. There is usually a flat fee charged in addition to a percentage of the amount withdrawn. Avoid making a cash advance if at all possible.
  • Always check the credit available in your card
    When you make a purchase, make sure you have the credit available on your credit card. If you go over your limit, you will receive an over-limit fee, usually between $25 and $35.
  • Review your card rates and fees ahead of time.
    Interest rates vary from card to card, but if you miss several payments your card might revert to a baseline rate. This could be a much more punishing rate than your initial APR and can start racking up the interest even faster.

Compare credit cards with no annual fee

Getting a credit card with no annual fee is a good way to keep your credit card costs down. That said, they still have associated fees to watch out for. Compare your options to find a card that’s right for you.

Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
Tangerine World Mastercard
15% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn an extra 15% cash back (up to $150) on up to $1,000 of everyday purchases in the first 2 months Until January 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
BMO CashBack Mastercard
5% cash back
Up to 3% cash back
19.99%
$0
Min. recommended credit score: 660
Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,500). Plus, get a rate of 1.99% on balance transfers with a 1% balance transfer fee for nine months.
Tangerine Money-Back Credit Card
15% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn an extra 15% cash back (up to $150) on up to $1,000 of everyday purchases in the first 2 months Until January 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).
Simplii Financial Cash Back Visa Card
10% cash back
Up to 4% cash back
9.99% intro APR for the first 6 months, 19.99% thereafter
$0
Min. recommended credit score: 650
Get 10% bonus cash back at eligible restaurants and bars for the first 4 months (up to $500 spend). Plus, get a 9.99% introductory annual interest rate on purchases for the first 6 months.
Brim Mastercard
Up to $200 worth of bonuses
1 point per $1 spent
19.99%
$0
Min. recommended credit score: 700
Earn up to $200 worth of bonus points when you shop with Brim retailers for the first time through the Brim mobile app.
Walmart Rewards Mastercard
Up to $25 in Reward Dollars
Up to 1.25% cash back
19.89%
$0
Min. recommended credit score: 650
Get up to $25 in bonus Walmart Reward Dollars.
SimplyCash Card from American Express
4% cash back
Up to 1.25% cash back
19.99%
$0
Min. recommended credit score: 700
Earn 4% cash back on purchases (up to $200 cash back) for the first 6 months of Cardmembership.
Walmart Rewards World Mastercard
Up to $25 in Reward Dollars
Up to 3% cash back
19.89%
$0
Min. recommended credit score: 650
Get up to $25 in bonus Walmart Reward Dollars.
American Express Green Card
10,000 points
1 point per $1 spent
20.99%
$0
Min. recommended credit score: 700
Earn a Welcome Bonus of 10,000 Membership Rewards points when you charge $1,000 in purchases to your card in the first 3 months as a new Cardmember.
BMO Rewards Mastercard
10,000 points
Up to 2 points per $1 spent
19.99%
$0
Min. recommended credit score: 725
Get a bonus of 10,000 BMO Rewards points when you spend $1,000 in the first 3 months. Plus, get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.
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Bottom line

If used correctly, credit cards are an effective means of improving your financial flexibility and earning rewards. To make sure a credit card is more of a help than a hindrance, keep your costs down by using your credit card responsibly.

Check out our guide on how to avoid credit card fees to find out how to save even more.

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