Shopping for a credit card? It can be confusing to decide on the best credit cards Canada due to the wide range of options. Learn what to look out for and what makes a great credit card.
When shopping for a credit card, it is only right to set your standards and expectations before-hand. This is because you need a credit card that suits your spending habits and offers additional benefits that are relevant to you. You will also rarely get a perfect match the first time until you study the options available keenly and pick out the features you are after.
What are the Benefits of having a Credit Card?
When you are shopping for various products or services whether online or offline, your credit card allows you to make payments even when your bank balance is zero. You will then be billed during the next month and pay back the money you owe after your paycheck has arrived.
For each purchase you make and pay with your credit card, you get some points which accumulate depending on your tendency to use the credit card. Your credit card company will then offer rewards such as travel tickets, products, and even services depending on their reward system.
- Build Your Credit Rating
If you pay your credit card debt on time, the credit card company makes positive reports that boost your overall credit rating. Consequently, your chances of getting loans in future are heightened meaning that you can get a mortgage or car loan seamlessly.
- Encourage Savings
Some credit card companies have promotional periods where they lower the interest rates on your credit card debt. This allows you to save hundreds or even thousands of dollars at times in interest rates.
The Major Types of the Best Credit Cards Canada
The best Credit cards Canada vary widely and this can complicate the selection process. You first have to learn to distinguish the types that are available. The following categories are the most dominant:
- No-fee credit card
They are just plain as their name suggests. With these cards, you are charged zero fees annually. The catch is, however, that you will get zero incentives or rewards. Nonetheless, this card type is a great choice when you need a credit card that has fewer complications and are not necessarily looking for rewards.
- Rewards credit card
With this card, you will have to pay an annual fee even when you do not use it. The annual fee reflects on the varying rewards the credit card company offers.
- Student credit card
It helps you to manage your life as a young adult when you might have to pay some bills by yourself. It is also advantageous if you want to establish a great credit history to allow you to access loans easily in future. You have to be careful of the way you manage a student credit card especially when you have no income. If for instance the rates are high and you fail to clear your debts, your creditworthiness is impacted negatively.
- Business credit card
It can help to separate your personal expenses from business purchases especially when you have another personal credit card. However, its payments may influence your personal credit rating.
- Low-interest credit card
It will help you to monitor your spending habits and save a lot of money in the process as you may discover some funds you never thought you had. These cards accrue some low-rate charges on a monthly basis and you should be mindful to avoid complacency.
- Low balance transfer credit card
This card is more applicable when you need to consolidate and organize all your credit cards. The low balance cards allow you to make transfers of your existing balances while taking advantage of extremely low rates. Make sure that you verify the expiration dates as these cards are normally temporary.
- Secured credit card
This is a great option if you want to start building credit or rebuilding your ruined credit score. They normally require you to do a security deposit of an amount equal to the credit card limit. However, in some states, you might be allowed to make partial deposits.
- Guaranteed credit card
Their key distinguishing factor is their comparatively small size and they enable you to keep tabs on your credit limit. As such, you can easily build credit or repair your damaged credit rating but a security deposit is not a requirement.
We are your reliable advisor on all matters regarding personal finance. There are numerous credit card companies who all have varying rates. We can link you up with the best providers and help you to compare their rates, term and desirability aspects. Using our experience and advanced technology, we will help you to choose the best credit cards Canada to suit your needs and lifestyle. Contact us today to learn more about credit cards or to get more tips on how to secure your financial future.