Consumers urged to shop around before signing credit card contracts

Walter Noel, Minister of Government Services and Lands and minister responsible for consumer affairs, is advising consumers to shop around before signing credit card contracts.

Consumers should take time to determine which type of credit card is best suited to their purposes, and educate themselves on the terms and conditions prior to signing a contract. They should also understand such terms as the annual percentage rate (APR), annual fees, late payment fees, minimum monthly payment, and cash advance fees.

Minister Noel said: "Consumers should determine which overall package would be best for them and not choose a credit card solely on one factor such as a rewards program or a low introductory rate.

"People should consider all their options before borrowing on credit cards as interest rates on these cards are among the highest. Interest rates can vary widely from one credit card to another, and can range as high as almost 30 per cent on credit cards issued by some retail stores. 

"Consumers should be certain of exactly what they are contracting for. I encourage people to ask for all relevant information related to their card."

Card holders are reminded that significant savings can be realized when high interest credit cards are paid off with other forms of credit that have a lower annual percentage rate, such as regular bank loans.

The minister also advises that the Financial Consumer Agency of Canada (FCAC) is a 
newly-created agency now working to protect and educate consumers in the area of financial services. FCAC can be contacted toll-free at 1-866-461-FCAC (3222) or visited at its Web site
www.fcac-acfc.gc.ca.

Media contact: Rick Callahan, Communications, (709) 729-4860.

2001 12 18                         12:05 p.m.