New to Canada? Here’s What to Know About Credit Cards

making a purchase

If you’re new to Canada, learning how credit cards work may be one of the first steps toward building your financial profile. When used thoughtfully, a credit card can support your day-to-day spending while helping you establish a credit history here in your new country. Below is a practical overview to help you get started.

Live Webinar: Understanding Credit in Canada: A Learning Session for Newcomers – Thursday, April 16 at 11 a.m. EST

Are you new to Canada and looking to better understand how credit and borrowing work? Click here to sign up for an exclusive webinar with TD Bank.

Apply for a TD Credit Card Designed for Newcomers

The Basics: How a Credit Card Works

A credit card allows you to make purchases by borrowing money from a financial institution, up to an approved limit. You can use it for everyday expenses, online purchases, and sometimes cash advances or balance transfers.

Each month, you’ll receive a statement summarizing your transactions and the amount owed. You may choose to pay the full balance by the due date or make a partial payment and carry the remaining balance forward. If you carry a balance, just be aware that interest charges may apply.

Why Credit History Matters

As you settle into life in Canada, building a credit history may play a role in reaching your financial goals. Lenders, landlords and, in some cases, employers may review your Canadian credit history when assessing applications.

Making all your payments on time and keeping your balance within your limit can help you build a positive credit profile over time.

Key Terms You May See

When researching or applying for a credit card, you may encounter some unfamiliar terms. Let’s make it easier for you by explaining some common phrases related to credit cards.

Minimum Payment: This is the smallest amount you are required to pay by the due date to keep your account in good standing.

Annual Percentage Rate (APR): The APR is the yearly cost of borrowing if you don’t pay your balance in full. It includes the interest rate and may include certain fees.

Billing Cycle: This is the monthly period during which your purchases are recorded. At the end of the billing cycle, you receive a statement. If the full balance isn’t paid by the due date, interest may apply.

Here are some answers to common questions about Canadian credit cards.

Learn more about the TD New to Canada Banking Package

What Should I Know About Credit Card Charges and Fees?

As you begin using a credit card in Canada, you may notice that certain transactions cost more than others. Knowing what to expect, especially when it comes to fees and interest, can help you make informed decisions.

Here are some of the different types of credit card transactions:

Purchases: This is the most common use. When you buy something, your credit card issuer pays the merchant, and you repay the amount later.

Balance Transfers: A balance transfer lets you move debt from one credit card to another. Periodically you may receive a promotional interest rate, which may help reduce borrowing costs if managed carefully.

Cash Advances: A cash advance allows you to withdraw cash using your credit card. These transactions often come with higher fees, and interest may begin immediately, even if you usually have a grace period on purchases.

When Will Interest Be Charged?

In Canada, interest is charged if you don’t pay your full balance by the statement due date. Most credit cards offer a “grace period”. That grace period is the time between the end of your billing cycle and your payment due date. During that time, you can typically avoid interest on purchases if your balance is paid in full.

Be aware, however, that some transactions, such as cash advances, may not have a grace period and may start charging interest right away.

What Fees May Apply?

In addition to interest, some credit cards may include other fees. Reviewing these details before applying may help you choose a card that fits your needs.

Annual Fee: Some credit cards charge a yearly fee for the ability to use the card and maintain the account. The amount can vary depending on the card.
Late Payment Fee: If you miss a payment, you may be charged a fee. Late payments may also affect your credit history.
Foreign Transaction Fee: If you make purchases in another currency, you may be charged an additional percentage of the transaction amount.

Book an Appointment at a TD Branch Now

Can I Make Credit Card Purchases Outside of Canada?

Yes. If you plan to travel or make purchases in another currency, your credit card may be a convenient payment option. In many cases, it may reduce the need to carry large amounts of cash. That said, it’s helpful to understand how international transactions work.

Some credit cards charge a foreign transaction fee when purchases are made in another currency. Reviewing your card’s terms in advance may help you avoid unexpected costs.

Some credit cards may also offer competitive exchange rates compared to some currency exchange services. From a security standpoint, using a card may reduce the need to carry significant amounts of cash while travelling.

How Will My Credit History Affect My Financial Life?

As you establish yourself in Canada, building a credit history may support your financial goals. A credit card is often one of the first tools newcomers use to begin developing a credit profile.

Your credit history may be reviewed when you apply for a loan, rent a home, or, in some cases, apply for a job. A strong credit profile may improve your chances of approval. It may also help you qualify for better interest rates over time.

Using credit responsibly can help you build a positive history. Paying on time and staying within your limit are two simple ways to get started.

Simple Habits That May Help Build Your Credit Score

Pay On Time: Making the required minimum payment by the due date each month may help strengthen your credit profile. Paying the full balance when possible can also help you avoid interest charges.
Use Only What You Need: Keeping your balance well below your credit limit may positively affect your credit score. Many experts suggest aiming to use less than 30% of your available credit.
Stay Within Your Limit: Maxing out your card or missing payments may lower your credit score. Consistent, careful use can help you build credit over time.

Additional Features That May Be Helpful

Beyond helping you build credit, some credit cards offer added features that may support your everyday spending and travel needs.

Rewards Programs: Many cards provide rewards such as cashback, travel points, or other benefits. Depending on the card, you may earn points for each dollar you spend. These points might later be redeemed for travel, merchandise, statement credits or gift cards.

Built-In Insurance Coverage: Some credit cards include certain types of insurance coverage. This may include travel-related insurance, purchase protection, or extended warranty coverage on eligible items. Reviewing your card’s details can help you understand what protections may apply.

Exploring TD Credit Card Options

As you build your financial life in Canada, you may want a credit card that fits your spending habits and goals. TD offers a range of options designed for different needs.

The TD Platinum Travel Visa Card allows you to earn travel rewards on eligible purchases.
The TD Rewards Visa Card lets you collect points on everyday spending.
The TD Cash Back Visa Card offers Cash Back Dollars on eligible purchases.

Some cards may also include optional features such as TD Credit Card Payment Protection, which can provide support in certain unexpected situations. Reviewing each card’s details may help you decide which option is right for you.

Moving Forward with Confidence

Credit cards can be a practical financial tool. With a clear understanding of how they work — and consistent, responsible use — they may help you manage expenses, access benefits and build your credit history over time.

Ready to bank? Learn more about the TD New to Canada Banking Package today

Why Choose TD?

More than 160 years of helping Canadians:

TD has a proud history of delivering financial solutions to Canadians for more than 160 years. TD also brings a century of experience helping newcomers navigate the unique challenges of the Canadian banking system.

With over a thousand branches, and the ability to also serve you in more than 80 different languages, TD has become one of the largest and most trusted banks in Canada, now serving 16 million Canadians.

TD offers online support and resources of interest to newcomers on topics such as banking basics, moving to Canada, credit score essentials, and more. TD is open longer hours for your convenience and has thousands of ATMs across Canada to help you take care of your everyday banking needs quickly and easily.

Ready to Bank?

Learn more about TD New to Canada Banking Package today.

Book an appointment to talk with a TD Personal Banking Associate about the TD New to Canada Banking Package. You can book online right away, or visit the TD website to learn more.

Legal Disclaimer:

Information provided by TD Bank Group and other sources in this article is believed to be accurate and reliable when placed on this site, but we cannot guarantee it is accurate or complete or current at all times. The information in this article is for informational purposes only and is not intended to provide financial, legal, accounting or tax advice, and should not be relied upon in that regard. This information is not to be construed as a solicitation to buy. Products and services of the TD Bank Group are only offered in jurisdictions where they may be lawfully offered for sale. All products and services are subject to the terms of the applicable agreement. The information in this article is subject to change without notice.

^®The TD logo and other TD trademarks are the property of The Toronto-Dominion Bank or its subsidiaries.

Sources

Government of Canada, “How Credit Cards Work”, Canada.ca, Ottawa: Financial Consumer Agency of Canada, 2024. Available at: https://www.canada.ca/en/financial-consumer-agency/services/credit-cards/credit-card-work.html
(Accessed March 1, 2026).

Government of Canada, “Credit Report and Score Basics”, Canada.ca, Ottawa: Financial Consumer Agency of Canada, 2024. Available at: https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/credit-report-score-basics.html
(Accessed March 1, 2026).

Government of Canada, “Improving Your Credit Score”, Canada.ca, Ottawa: Financial Consumer Agency of Canada, 2024. Available at: https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/improve-credit-score.html
(Accessed March 1, 2026).

TD Bank Group, “Perks and Rewards”, TD Canada Trust, Toronto: TD Bank Group, 2025. Available at: http://www.td.com/ca/en/business-banking/how-to/manage-my-business-credit-card/perks-rewards
(Accessed March 1, 2026).

TD Bank Group, “TD Credit Card Payment Protection”, TD Canada Trust, Toronto: TD Bank Group, 2024. Available at: https://www.td.com/ca/en/personal-banking/products/insurance/td-credit-card-payment-protection
(Accessed March 1, 2026).

TD Bank Group, “Apply Online for a Credit Card in Canada”, TD Canada Trust, Toronto: TD Bank Group, 2024. Available at: https://www.td.com/ca/en/personal-banking/products/credit-cards
(Accessed March 1, 2026).