As mentioned earlier, I do have two lines of credit from two different banks here in Canada (both are Big 5 banks). Some of the questions people frequently ask me “Are there any fees for lines of credit here in Canada, and if yes, then how much?”

The answer to this question is simple: There are no fees for a line of credit in Canada. The reason for this is that banks do want you to get a line of credit so that they can benefit from the interest that you pay.

But, can there be any fees in the future?

Well, yes – there an be. Lines of credit, especially unsecured lines of credit, have terms that allow banks to change anything in your line of credit, including imposing a fee. In fact, TD Canada Trust imposed a $35 non-usage yearly fee on lines of credit for 2 weeks back in 2009. That decision was to reduce the bank’s risk overhead in the wake of the US financial crisis. When the fee was imposed, thousands canceled their unused lines of credit to avoid the fee, and that’s exactly what the bank wanted. When the bank reached an acceptable risk overhead, it canceled the fee.

PS: This post only applies to lines of credit in Canada. It seems that some banks in the US have something that they call unused fee on lines of credit, which is proportional to the unused portion of the line credit.

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