Financial Glossary.

A perk on some premium cards that lets you use airport lounges, sometimes through a membership such as Priority Pass. Access rules, guest policies, and the number of free visits differ by card.

A yearly charge for holding a credit card. Premium cards charge $100 to $800 per year but often include rewards and perks that can exceed the cost. No-fee cards exist but typically earn at lower rates.

The yearly interest rate charged on unpaid credit card balances. Purchase rates in Canada typically range from 19.99% to 22.99%. Paying your balance in full each month avoids interest charges entirely.

A person added to someone else's credit card account. They receive their own card and can make purchases, but the primary cardholder remains responsible for all payments.

Moving debt from one credit card to another, usually to take advantage of a lower promotional interest rate for a set period. A transfer fee, often 1% to 3% of the amount, typically applies.

A one-time charge for moving a balance to a new card, usually a percentage of the amount transferred. Factor it into your calculation to confirm the transfer still saves you money overall.

A type of spending that earns a higher cash back or points rate than everyday purchases, such as groceries, gas, dining, or recurring bills. Matching a card's bonus categories to your habits maximizes rewards.

The process of establishing a positive credit history over time by using credit responsibly: paying on time, keeping balances low, and avoiding too many applications at once.

Using your credit card to withdraw cash, for example at an ATM. Interest begins immediately with no grace period, usually at a higher rate than purchases. It is generally best avoided.

A reward that returns a percentage of your spending as money, usually applied as a statement credit or a deposit. Rates are often higher in bonus categories such as groceries or gas.

A federal Crown corporation that insures eligible deposits at member institutions up to a set limit per depositor, per insured category. It covers deposits such as savings, chequing, and GICs.

A bank account built for day-to-day transactions such as bill payments, debit purchases, direct deposits, and Interac e-Transfers. Monthly fees can often be waived by keeping a minimum balance.

A security method where the chip embedded in your card is read by the terminal and you enter a personal identification number (PIN) to authorize the transaction. It is the standard in Canada.

A person who agrees to share responsibility for a credit account with someone who has limited credit history. If the primary applicant cannot pay, the co-signer is legally responsible for the debt.

Tap-to-pay technology (NFC) that lets you complete smaller transactions without inserting your card or entering a PIN. It is supported by Visa, Mastercard, and American Express.

The maximum amount you can charge to your credit card. Keeping your balance below 30% of your limit (your utilization ratio) helps maintain a healthy credit score.

A detailed record of your credit accounts, payment history, and inquiries kept by the credit bureaus. You can request a free copy from Equifax and TransUnion and should review it for errors.

A three-digit number (300 to 900) that summarizes your creditworthiness. In Canada it is calculated by Equifax and TransUnion based on payment history, utilization, credit age, credit mix, and recent inquiries.

The share of your available credit you are currently using. Keeping utilization below 30% supports your score, and below 10% is considered ideal.

Combining several debts into a single balance, sometimes at a lower interest rate, to simplify payments. A balance transfer is one way to do it, but it works best when paired with a plan to pay the balance down.

An electronic transfer of funds straight into your bank account. It is commonly used for payroll, government benefits, and pension payments, and it is usually faster than a paper cheque.

How much cash back or how many points you receive per dollar spent, often expressed as a percentage or a multiplier. A card may have a base earn rate plus higher rates in bonus categories.

A limit on how much spending qualifies for a bonus rate, after which purchases earn the base rate instead. For example, a category might earn a higher rate only on the first few thousand dollars spent each year.

One of Canada's two main credit bureaus. It maintains credit files and calculates credit scores for Canadian consumers.

A fee, commonly around 2.5%, added to purchases made in a foreign currency. Some cards waive this fee, which can add up on trips abroad or when shopping from foreign retailers online.

The time between your statement date and your payment due date, usually about 21 days, during which no interest is charged on new purchases as long as you pay your balance in full.

A credit check triggered when you apply for credit, such as a loan or a new card. It can lower your score by a few points. Several inquiries of the same type within a short window are often counted as one.

A Canadian service for sending and receiving money electronically using an email address or phone number. Most chequing accounts include e-Transfers at no extra cost.

A program run by an airline, hotel, or retailer that rewards repeat business with points or miles. Many credit cards let you earn directly in a program or transfer points into one.

The smallest amount you must pay each month to keep your account in good standing, usually 2% to 3% of the balance or a fixed dollar minimum. Paying only the minimum leads to significant interest over time.

A person new to Canada who has not yet built a Canadian credit history. Some cards and banking packages are designed to help newcomers get started with credit and everyday banking.

A card that does not charge a yearly fee to hold it. These cards are popular first cards for students because they let you build credit without an ongoing cost.

A fee charged when a payment or withdrawal is attempted but your account does not hold enough money to cover it. Linking a backup account or overdraft protection can help you avoid it.

A service that covers a transaction when your account balance is too low. It charges a fee and interest on the borrowed amount, so it is meant as a short-term safety net rather than ongoing credit.

The record of whether you pay your bills on time. It is the single largest factor in your credit score. Even one missed payment can lower your score noticeably.

Rewards earned on purchases that can be redeemed for travel, merchandise, gift cards, or statement credits. The value per point varies widely by program, so the same balance can be worth more or less depending on how you redeem it.

Moving points from a credit card program into an airline or hotel loyalty program, often at a set ratio. Transfers can unlock higher redemption value but are usually not reversible.

A recurring withdrawal you authorize a company to take from your account, for example a mortgage payment or a monthly bill. You can review and cancel these authorizations through your bank.

A temporary, reduced interest rate offered for a limited time, such as 0% on balance transfers for several months. When the promotion ends, the standard rate applies to any remaining balance.

A deposit account that earns interest on your balance. High-interest savings accounts from online banks often offer the best rates. Eligible deposits are protected by CDIC coverage.

A credit card backed by a refundable cash deposit that serves as your credit limit. It is a common tool for building or rebuilding a credit history.

A credit check that does not affect your score. It includes checking your own score, receiving a pre-approval offer, or an employer background check.

The monthly summary of your credit card activity: purchases, payments, interest, fees, your balance, and the minimum payment due. Reviewing it each month helps you catch errors and unauthorized charges.

An amount applied against your credit card balance, often used to deliver cash back rewards or a promotional offer. It reduces what you owe rather than being paid out as cash.

A credit card designed for students, typically with no annual fee and relaxed income requirements. It is a common first card for building a credit history responsibly.

One of Canada's two main credit bureaus. It maintains credit files and calculates credit scores that lenders use to assess applications.

Coverage that may come with a credit card, such as trip cancellation, trip interruption, or emergency medical care abroad. Coverage limits and conditions vary, so review the certificate before you rely on it.

A one-time reward in points or cash for new cardholders who meet a minimum spending requirement within the first few months. Read the requirement carefully to make sure it fits your normal budget.