Learn the ins and outs of credit cards—how they work, why you might need one, and how to manage your spending.
What is a credit card and how does it work?
A credit card lets you borrow money from the bank to spend on your everyday purchases.
At the end of each monthly billing cycle, you’ll get a credit card statement (your bill) with the amount you owe (your balance).
Each credit card has a limit—the maximum you can charge to the card.
Your statement has your minimum payment amount and the payment due date.
To maintain good credit, you need to make the minimum payment on your balance each month.
If you don’t pay off your full balance before the payment date, you’ll be charged interest on the unpaid balance.
Let’s say you spend $250 on textbooks and your phone bill—that will be your statement balance.
If your minimum payment is $10, that’s the lowest amount you should pay by the due date.
If you only pay $10, you’ll be charged interest on the remaining $240 until you fully pay it back.
Why do I need a credit card?
A credit card helps you build your credit history. When you want to rent an apartment or make a major purchase down the road, a good credit report will help your application.
As long as you use your card responsibly and make regular payments, a credit card is a helpful first step to building your history of good credit.
Understanding your card and statement
Credit card breakdown
1. Security chip
2. Credit card number
3. Expiry date
4. Cardholder name
5. Security code (CVV/CVC)
6. Cardholder signature
Get to know your statement
Statement balance: How much you owe at the end of your monthly billing cycle.
If you don’t pay it all by the due date, you’ll be charged interest on the remaining amount.
Credit available: How much is available to spend on your credit card.
If your limit is $3,000 and you’ve spent $200, your available credit is $2,800 until you pay back the $200.
Minimum payment: Each month, you need to pay at least this amount towards your outstanding balance.
If you can, pay more than the minimum to keep your interest charges under control—and keep your credit score healthy.
Credit limit: The maximum amount you can charge to your credit card.
Make sure to regularly review your transactions. If you see any transactions you don’t recognize on your CIBC credit card, call 1-800-465-4653.
Managing your credit card
Use your credit card responsibly to help you maintain good credit. Don’t spend more than you can pay off each month and always pay your bill on time. Try these tricks to help you stay on track:
Set budgets All purchases on your CIBC credit card are automatically sorted into spending categories like Restaurants and Transportation. Plus, you can create your own. To help manage your spending, you can set up monthly budgets for each category.
Set up alerts Alerts make it easy to stay on top of your credit card spending. You can receive alerts through push notification, text message, and email. Choose from alerts for upcoming payment due dates, exceeding your monthly spending budgets, approaching your credit limit, and new credit card eStatements.
Make regular payments You can pay your credit card bill using CIBC Online or Mobile Banking®, at a CIBC Banking Centre, or through telephone banking. To avoid missing payments, you can schedule recurring bill payments.
How do I choose the right card?
Here are three things to consider when you're looking for a credit card:
Some cards let you earn rewards at a faster rate, but you have to pay an annual fee. Look for cards with no annual fee that still offer rewards.
The interest rate is what you'll be charged if you don't pay off your full balance each month. If you carry a balance, you'll want to choose a card with a low interest rate.
You can earn rewards, like travel points and cash back, on all your everyday purchases.