Interest and payments
How credit card interest works in Canada
Understand grace periods, purchase rates, cash advances and why payment timing changes your borrowing cost.
Reviewed and updated August 12, 2026
Interest depends on the transaction
Purchases, cash advances and balance transfers can have different rates and rules. Cash advances commonly begin accruing interest immediately, while new purchases may receive an interest-free grace period when the statement balance is paid by its due date.
Minimum payments keep debt expensive
Paying only the minimum can stretch repayment over years. A fixed payment above the minimum shortens the schedule and reduces total interest, provided you stop adding new charges.
Use the rate that matches your plan
For everyday spending, compare the purchase rate. For an existing balance, compare the transfer rate, transfer fee and promotional period together. For cash withdrawals, check the cash-advance rate and any transaction fee.