Interest Rate (Purchase Rate)
The interest rate on a credit card — specifically called the purchase rate or purchase APR — is the annualized percentage charged on any balance you carry past your payment due date. In practical terms: if you pay your statement in full every month, you pay zero interest regardless of your card’s rate. If you carry even a small balance, interest is calculated daily on the outstanding amount using the annual rate.
Daily interest is calculated as: (Annual rate ÷ 365) × outstanding balance. At 19.99%, this works out to approximately 0.0548% per day — which compounds and adds up quickly on large balances.
Quick Facts
| Rate Type | Typical Canadian Range |
|---|---|
| Standard purchase rate | 19.99% |
| Low-rate card purchase rate | 10.99% – 12.99% |
| Cash advance rate | 21.99% – 22.99% |
| Promotional balance transfer | 0% – 3.99% (limited period) |
| Penalty/default rate | Up to 25.99% (varies by issuer) |
| Regulated by | FCAC (Financial Consumer Agency of Canada) |
Canadian Context
Canada’s 19.99% standard purchase rate has remained remarkably stable for decades and is not tied to the Bank of Canada’s overnight rate — unlike mortgages or lines of credit. This rate convergence across major issuers is an artifact of market structure and regulatory expectations rather than collusion. Low-rate credit cards (10.99%–12.99%) are a distinct niche in Canada for those who carry balances; they rarely offer rewards. The FCAC requires all issuers to clearly disclose the interest rate on all credit card agreements and to provide 30 days’ notice before any rate increase. If you frequently carry a balance, see our credit card basics guide on choosing the right card type.
Related Glossary Terms
Information on this page is provided for general educational purposes. Interest rates vary by issuer and card — always review your cardholder agreement for the exact rate that applies to your account.