SARAH COLUCCI, MORTGAGE BROKER
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Mortgage Blog

TD Bank To Charge "Interest on Interest" On All Credit Card Balances Effective March.

1/25/2020

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Mounting credit card debt is an expensive problem for many credit card users all over Canada, and despite most Canadians having credit card balances, many are still unsure about how their credit card’s interest gets calculated.

Unfortunately, because different financial institutions calculate interest in various different ways, a borrower can be under informed about the process and end up paying much more interest than desired instead of switching to a cheaper credit card.

TD Bank recently sent out a notice to customers advising that effective March of this year, it will begin charging “interest on unpaid interest” which will then get compounded daily.

As a reference, Royal Bank of Canada and Canadian Imperial Bank of Commerce do not not charge interest on interest; they both only charge compounded interest on the daily outstanding balance. Scotiabank does have some products such as the Momentum MasterCard Credit Card that it charges interest on interest on, however, it does not calculate charges this way for most of its other credit products.

To avoid paying credit card interest, cardholders must make a payment within 21 days of their purchase which is the interest-free grace period. Cash advances do not have a grace period.

If a cardholder cannot pay their entire balance in full, interest begins to accumulate from the day of their transaction to the day the balance is paid off. Interest then gets calculated on the daily balance and is divided by the number of days in the statement period. The credit card’s specified interest rate is then applied to the equation.
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TD Bank has decided to add any unpaid interest charges to the outstanding balance and compound that amount ultimately making the minimum monthly payment more costly.

Time to consolidate? Try our refinance program to pay less interest each month and save money.

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Newmarket, ON
​L3Y 2G9

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Sarah A. Colucci, Mortgage Agent Lic. M14000929
Mortgage Edge, FSCO Lic. 10680

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Email: sarah.colucci@coluccimortgage.com
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  • Home
  • ABOUT ME
  • Why Use A Mortgage Broker
  • APPLY ONLINE
  • PRODUCTS
    • BEAT THE BANKS
    • WHY INVEST IN REAL ESTATE
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • SELF-EMPLOYED MORTGAGES
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • PERSONAL LOANS
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE QUESTIONS
  • MORTGAGE DICTIONARY
  • MY LENDERS
  • MISSION
  • MORTGAGE NEWS
  • MULTIMEDIA & APPEARANCES
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • TESTIMONIALS
  • HOUSE HUNTING CHECKLIST
  • MORTGAGE WITH ME