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Please note that TD has put these plans on hold for the time being. You can learn more about that here.
Do you have a TD credit card?
Do you either carry a balance or not always pay it in full every month?
If so, changes are coming to interest payments on TD credit cards you may want to be aware of.
TD credit cards to start compounding interest & charging overlimit fees
Yes, TD credit cards are starting to punish cardholders who tend to hold a balance more severely.
Not only will your interest start to be compounded (so you’ll be paying interest on your interest charges too), but they’re also introducing an overlimit fee of $29 for Visa Infinite cards (it exists already on other TD cards).
All this is a big reminder NOT to carry a balance on your credit card in the first place. There are loans with cheaper interest rates available for that if absolutely necessary.
These changes take effect on the first day of your March statement.
Everything was outlined in a letter received for a
How will this affect me?
Currently, interest is only calculated on your card balance and doesn’t include interest that has already been accumulated.
But starting in March, TD will add unpaid interest charges to your balance, and start charging interest on top of your interest.
So, say for example your interest rate is 20%, and you have an unpaid balance of $1,000. Your monthly interest charge would be roughly $16.95.
If you don’t fully pay off your interest by making at least your minimum payment, that $16.95 amount gets added to your statement balance, meaning next month you’d pay interest on a balance of $1,016.95 instead. That’s about an additional $0.29 in interest next month that you otherwise wouldn’t have had to pay – and it’ll only keep adding up.
If you have a TD credit card and pay your balance in full, there’s nothing for you to worry about as this won’t impact you.
But if you do carry a balance, your interest charges may start to rise, pulling even more money out of your wallet. However, payments you make get applied to interest charges first, so as long as you make at least your minimum payment (which for TD cards is $10 plus interest and fees charged) you should be alright.
Low interest credit card alternatives
The only low interest personal card in TD’s portfolio is the TD Emerald Flex Rate Visa, and even it has a wide range of rates, from as low as 8.45% all the way to 16.65%, depending on your credit score, TD’s prime rate, and other factors.
If you have a large balance on your card, or don’t always pay in full every month – here’s an option for both cases.
Related: Balance Transfer Credit Cards 101
|Credit Card||Offer||Annual Fee, Income Requirement||Apply Now|
|BMO CashBack Mastercard||Balance transfer offer of 1.99% for 9 months (terms)||* $0
* 15K personal
|MBNA True Line Gold Mastercard||Low purchase and balance transfer rate of 8.99% (terms)||* $39
Best balance transfer card for TD cardholders
Normally, we would recommend the
So, the best non-MBNA balance transfer card right now is the
You’ll get a balance transfer promotion of 1.99% for 9 months, with a low 1% fee to pay on the balance transferred. If you have a TD credit card with a large balance you want to transfer, it’s your best option right now.
This balance transfer promotion is also available on these 2 BMO cards as well:
Best low interest card
This offer is not availble to residents of Quebec. For residents of Quebec, please click here.
If you don’t have a balance to transfer, but don’t always make your payments on time or in full every month, then consider the
You’ll get a low permanent interest rate of 8.99% on both purchases and balance transfers, for a low annual fee of $39.
What are your thoughts on these interest changes with TD credit cards? What about the new overlimit fee?
Are they making you consider other cards?
Let us know in the comments below.