20 Golden Rules of Credit Cards

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Last updated on March 24, 2021

If you only read one article to get tips on how to get the most from your credit cards, read this one:

1. Pay down your credit card bill every month

Pay down your credit card bill monthly. Don’t just pay the minimum, or you will quickly find yourself with a snowballing mountain of debt that will be hard to manage.

2. At LEAST pay the monthly minimum on time

If paying the entire balance at the end of the month is unrealistic, at least pay the minimum due on time. If you don’t, you could be hit with increased interest rates, and a lower credit score.

3. Set-up direct payment if possible!

You can set-up your bank account so that it automatically pays your credit card monthly minimum payment, or the entire credit card balance at the end of every month. The first ensures you’ll never be late, the second that you’ll never have debt.

4. Carry a balance occasionally? Keep a low interest credit card in your wallet

If you carry a balance from time to time, get a low interest credit card with no annual fee as a back-up credit card, like the  MBNA True Line® Mastercard®, which charges a low 12.99% interest on purchases and balance transfers, and 24.99% interest on cash advances. That way, if you ever need to make a purchase you know will revolve month to month, you’ll be able to do so at a lower interest rate.

If you’re a more frequent spender looking for even lower interest, you’ll have to settle for a low annual fee as well, like with the  MBNA True Line® Gold Mastercard®, which has a $39 annual fee, but then you’ll only pay 8.99% interest on both purchases & balance transfers as well as 24.99% on cash advances!

5. If you carry a balance, always look for a balance transfer offer

If you already carry a balance, keep an eye out for low rate balance transfer offers that might offer you up to a 1.99% rate for 6 to 12 months, and actively transfer your balances.

6. Don’t use the same credit card to charge and carry balances

Use your rewards credit cards to earn points or cash back on new purchases and low interest credit cards for carrying balances. Transfer your balances from your rewards card to a low interest card if you have to.

7. Pay down your balance before your  introductory period ends

Banks have designed low rate and balance transfer offers to make money when you forget to pay them down or transfer to a new offer before the introductory period ends. Don’t be one of the suckers.

8. Pay down your most expensive balance first

Eliminate high interest debt as fast as you can. If you’re carrying multiple balances on different credit cards, and can’t consolidate your debt on one low interest credit card, pay down the most expensive debt first.

9. Don’t go over your credit limit

Although banks provide credit limits, they often allow cardholders to go over their limits – go figure. If you do, the issuer can charge you an over limit fee, often $25 or more, plus they can raise your interest rates.

10. Get a specific card for foreign purchases

Most Canadian credit cards charge a foreign transaction fee of 2.5% on foreign purchases, wiping away any benefit you might get from your rewards and then some. Get a Canadian credit card that does not charge any foreign transactions fees at all, and you’ll be well ahead of the game.

11. If you don’t keep a balance, use a rewards credit card

Why use cash, debit or a non-rewards card if you can make the same purchase and get 5% cash back or points towards a free flight? So long as you pay off your balance, you might as well get rewarded for purchases you would have made anyways.

12. Don’t use more than 30% of your credit line

Carry a credit card balance that exceeds 30% of your credit line and your credit score will likely take a hit. If you keep bumping up against your line either ask for a credit line increase, since Canadians banks can no longer increase your line without your express consent, or get another credit card.

13. Don’t use the cash advance!

There is no more expensive way of accessing credit on your credit card than a cash advance. First there is usually a minimum cash advance fee of $7.50 or the greater of 1%. Second, there is no grace period, so the cash advance will be charged interest from the moment it’s withdrawn. Third, cash advances often have higher interest rates than purchases, many as high as 24.99%!

14. Use credit cards for insurance and purchase protection

How many times have you paid for extended warranties, car rental insurance, travel medical and trip cancellation insurance? Before you ever do that ever again, check your credit card to see if your card automatically covers you if you make the purchase with your card. These hidden benefits can save you $100’s per year.

15. Put the screws on your credit card company

Not enough people do this. Many credit card companies will lower your interest rate if you threaten to transfer your balance, or come up with a payment plan to reduce your monthly payments. Some will waive an annual fee if you threaten to close your account. Squeaky wheels get the grease, so stick out your palm and ask.

16. Maximize your rewards

Different credit card programs offer different earn rates for making different types of purchases. Find and use the credit cards that maximize your rewards based on where and how much you spend. You can also use a credit card comparison site to help you find the best credit card for you.

17. Check for sign-up bonus offers

For whatever reason, banks continue to reserve their best offers for new customers. If there’s a bank offering 25,000 points with a first year annual fee waiver, and all you have to do is make one purchase, why wouldn’t you take the offer? Plenty of credit card “churners” have travelled far & wide on the banks’ dime, why shouldn’t you?

18. Don’t apply for a credit card you won’t be approved for

Some of the juiciest offers go to those with the best credit and highest income. If you know you don’t fall into either of those categories, don’t bother applying for a premium credit card, chances are you’ll be declined. The problem is if you apply and get declined often enough, your credit score will get lowered.

19. Read the fine print

The Government of Canada has done a great job of making cardholder agreements, especially the information box (shumer box), easily understandable for consumers. Read it before you apply for a credit card to ensure you know the rules of the game. Each issuer will have different triggers for raising rates, applying penalty fees etc…

20. Review your credit card statement

Review your statement online weekly, especially if you pay off your credit card balance with automatic bill pay at the end of every month. Doing so will let you know if your spending is within budget, will prevent you from paying unauthorized credit card charges and will help you identify recurring payments for services you might want to cancel.


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GreedyRates is Canada’s go-to resource for all things personal finance. Our expert articles and videos cover every topic under the financial sun, including credit cards, credit scores, loans, bank accounts, budgeting, investing, RSPs, TFSAs, GICs, taxes, and more. Want our advice on a personal finance issue? Send us an email at [email protected] and we’ll gladly give you some free tips.

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