Credit card interest, the grace period, cash advances and balance transfers in Canada
Quick summary
If you pay your full statement balance by the due date, you pay no interest on purchases. The FCAC says federally regulated institutions must give at least 21 days to pay after your billing period ends. Cash advances and balance transfers get no grace period, so interest starts right away. Use the finder below, and see how credit cards work for the basics.
Checked November 12, 2026. Main source: FCAC: How credit cards work (modified October 15, 2025, read November 12, 2026). See all 1 source.
Key facts
- Minimum grace period
- 21 days, for federally regulated institutions
- Source: FCAC, Oct. 15, 2025
- Grace period applies to
- Purchases only
- Source: FCAC, Oct. 15, 2025
- Cash advances
- No grace period. A fee may also apply
- Source: FCAC, Oct. 15, 2025
- Balance transfer fee
- Usually a percentage. Example: $1,000 at 3% is $30
- Source: FCAC, Oct. 15, 2025
Find your due date and estimate interest
Enter your statement date and the interest-free days on your agreement. Add a balance and rate to see a rough interest estimate if you do not pay in full.
When do I need to pay to avoid interest?
The FCAC says federally regulated issuers must give at least 21.
Pick your statement date to see the date.
What does carrying a balance cost?
An example, not your rate.
About $8.22 in interest.
Estimate only: balance times the yearly rate times days, divided by 365. Issuers use their own methods and can apply your payments in their own order, so your statement is the real number. Cash advances, cash-like transactions and balance transfers have no grace period. Nothing you type is saved or sent.
Rules from FCAC: How credit cards work (modified October 15, 2025, read November 12, 2026). The interest estimate is our arithmetic, not your issuer's calculation.
How the grace period works
The FCAC says the grace period starts on the last day of your billing period. It is the time you have to pay your balance in full without being charged interest on purchases.
Its example: you buy something on January 15 and your statement is dated February 1. With a 21-day grace period, you must pay by February 21 to avoid interest.
The FCAC says interest keeps being charged until you pay the full balance. Paying only the minimum does not stop it.
Source: FCAC: How credit cards work (modified October 15, 2025, read November 12, 2026).
Purchases, cash advances and balance transfers
| Type | Grace period? | What the FCAC says |
|---|---|---|
| Purchases | Yes | Interest-free if you pay the full balance by the due date |
| Cash advances | No | Interest starts right away. Fees can be fixed, a percentage, or both |
| Cash-like transactions | No | Includes wire transfers, money orders, travellers' cheques and gaming |
| Balance transfers | No | A fee, usually a percentage, applies. Promotional rates last a set period |
Source: FCAC: How credit cards work (modified October 15, 2025, read November 12, 2026).
Cash advances: the costly choice
The FCAC example uses 19% for purchases and 22% for cash advances. Retail cards may charge more. Your rates are on your agreement.
Because there is no grace period, interest runs from the day you take the cash. The FCAC suggests considering a personal loan or line of credit first.
Source: FCAC: How credit cards work (modified October 15, 2025, read November 12, 2026).
Balance transfers
A balance transfer moves debt from one card to another. The FCAC says the fee is typically a percentage of the amount. Its example: $1,000 at 3% costs $30.
Promotional rates apply for a set period, and there is no grace period on the transferred amount. Check what rate applies when the promotion ends.
Source: FCAC: How credit cards work (modified October 15, 2025, read November 12, 2026).
Missing a minimum payment
The FCAC says missing a minimum payment may raise your interest rate, either for a while or for good. Read your agreement for the exact rule.
Source: FCAC: How credit cards work (modified October 15, 2025, read November 12, 2026).
Other fees to watch for
| Fee | What the FCAC says |
|---|---|
| Merchant surcharge | Up to 2.4% outside Quebec. The merchant must tell you |
| Foreign currency conversion | Example given: 2.5% |
| Over-limit, reprint, dishonoured payment, inactive account | Issuers can charge these. Check your agreement |
Source: FCAC: How credit cards work (modified October 15, 2025, read November 12, 2026).
Credit limit increases need your consent
The FCAC says an issuer needs your express consent to raise your limit and must confirm it in writing by your next statement.
Source: FCAC: How credit cards work (modified October 15, 2025, read November 12, 2026).
Check what you learned
3 quick questions. Nothing is saved or sent.
1. What is the minimum grace period for federally regulated issuers?
2. Which gets a grace period?
3. If you pay only the minimum, is interest still charged?
Questions people ask
How long is the grace period in Canada?
The FCAC says federally regulated institutions must give at least 21 days after your billing period ends. Other issuers may differ.
Do cash advances have a grace period?
No. Interest starts right away, and fees can apply.
Do balance transfers have a grace period?
No. The FCAC also says a fee applies, usually a percentage of the amount.
If I pay the minimum, do I avoid interest?
No. The FCAC says interest is charged until the full balance is paid.
What happens if I miss a minimum payment?
The FCAC says your rate may rise, temporarily or permanently.
Can my issuer raise my limit without asking?
No. It needs your express consent and must confirm in writing by your next statement, per the FCAC.