If you’re like most Canadian teenagers, you applied for your first credit card when you were in high school, and really wanted a new TV or stereo and didn’t get it for your birthday. Or like me your parents got you a joint card on their account “to build up” your credit history. Not exactly a priority when you’re 16 years old, but looking back it was good advice nonetheless. It made you feel like an adult and that you had thousands of dollars at your fingertips…until the first bill came. Then reality set in. As a teenager, you probably weren’t too worried about your rights or the regulations involved with credit cards – but funnily enough, there are some.

The Financial Consumer Agency of Canada (FCAC) has some great information on their website which also includes your rights and responsibilities when applying for a credit card. We thought it would be helpful to summarize those rights below and make Canadians aware of what they type of information should be provided when they apply for a credit card.

Canadian credit card companies must provide certain information when you apply for a card and also when you receive the agreement or contract in the mail after your application has gone through. They advise to read this carefully and keep it for your records.

The credit card agreement must include the following details:

Annual interest rate;

How that interest is actually calculated;

It can be calculated using either the average daily balance method or daily balance method. Check your contract to see which one your card issuer uses but typically they provide the same amount of interest.

Beware of cash advances and balance transfers as you’re charged interest from the day that you actually take the cash out and don’t get any interest-free period as you do when you make a purchase.

Grace period – this is the interest free period you have from the day you make a purchase until your monthly payment is due;

The frequency that you’ll receive your balance statements and this has to be at least monthly

The date when interest starts accumulating;

If you have to pay the full balance when you get your statement and the interest rate that applies if you don’t;

The minimum monthly payment (avoid this if possible!) or how this is calculated;

Your credit limit — if you don’t know after you’ve received your card it must be given to you with or before your first statement is issued;

Details of the additional features that are offered such as any insurance, and the charges, conditions of cancellation, etc;

Another other fees that may apply;

A local or toll-free contact number that you can call during normal business hours to get information on your account

In addition, the contract must clearly state the maximum amount that you would be liable for and have to pay in the unfortunate instance if somebody rips off your card and uses it for buying a trip to the Bahamas or the latest iPod and this shouldn’t exceed $50. This maximum amount only applies if you tell the issuer that the card has been lost or stolen – and don’t wait 4 months to do it. As soon as you report this you aren’t responsible for any subsequent misuse of the card and they should get you a new one. That’s why they always say it’s important to report a lost or stolen card, it really is in your best interest.

So regardless if you’re a teenager or not, or you already have 5 credit cards in your wallet, be aware of your rights when you’re applying for a credit card and make sure you’re getting the information that should legally be provided to you.

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