Since you have to give up some of your money for a while to put down collateral for a secured credit card Canada, you might not be sure if those products are worth your time. What can you do with a secured credit card that you couldn’t do with just some cash or a debit card? The 5 things we outline here are just some of the many important advantages you’ll enjoy if you choose to go ahead and get one of these cards.
The number one reason that most people get a secured credit card Canada is to help build their credit up. A high credit score can make your life easier in so many ways, from qualifying you for better rates on loans and mortgages to making it easier to get some apartments or jobs. The sooner your start to work on this aspect of your financial profile, the better the results will be, so it makes sense not to delay in doing this. Secured credit cards ask you to make a deposit against your line of credit so that they don’t have to worry about whether or not you’ll pay your bills, so they are much more likely to accept you even if your current credit is sub-par. Once you have your new card, using it wisely will mean there’s no way to go but up, which should be a welcome change for most people with this concern.
Buy Things Online
Many people do more shopping online than in real stores these days, but if you don’t have a credit card, you’re out of luck. Many retailers (especially large, established stores that don’t necessarily need to expand their payment options in order to attract customers) only allow you to pay for their products or services with a credit card. Some may offer an alternative method like PayPal if they want to make things easy for you, but most will not take a debit card payment, many will give you no way to get past the checkout screen without entering your credit card number.
A secured card works for this purpose as much as any other card. It’s a great way to get a card that’s almost guaranteed to work, even if you don’t have a credit history or have some previous black marks on your record. With one in your pocket, you’ll have access to a whole new world of deals and specialty retailers that you couldn’t shop from any other way.
Pay For Hotels and Rental Cars
Similarly to online retailers, many hotels, motels and rental car chains won’t accept payment in any form other than with a credit card. This can leave you in a tight spot if you find yourself on the road and in need of one of those services without a card of your own. Some places will take cash, but you have to look specifically for them, and they may not be the most reputable or safe establishments out there. Plus, many people do not carry cash with them at all times, so there’s still the matter of needing to have enough money on you to contend with. If you want to make sure you have at least some kind of credit option available to you at all times, a secured credit card is easy to get and won’t let you down. That makes it a good option for travellers wanting to keep all their options open.
Track Your Expenses
Conventional payment methods can make it hard to keep on top of how well you’re following your budget. Because you don’t have to pay anything off when you use your debit card, many people don’t always check their balance as often as they should. It’s easy to just keep charging things to your card and not worry about it unless you hit overdraft fee territory, and since you’re not physically exchanging money like you would be with cash, it’s hard to keep track of before that point even if you wanted to do so.
The obligation pay down your debts each month makes having a credit card different from that relaxed state of affairs. If you don’t check how much you owe on your card, you’ll pay for it (literally). This means that almost everyone does keep close tabs on their credit card statements and is more aware of how much they are spending on them. You might be surprised to find out just where your money is going, and if you feel up to it, you could even use that insight to make positive changes to your spending habits.
Enjoy Purchase Security
The reality of any purchase method is that sometimes it will get stolen. While it’s not impossible to recover your losses when you have an issue with an unauthorized purchase on your debit card, getting a fraudulent transaction reversed is usually easier with a credit card because most cards include purchase protection as a matter of course. You generally have to worry about fraud a lot less with a credit card in your pocket, secured or not.
There are other cases in which using a credit card can help you recoup money you might otherwise lose. If you purchase a product yourself that turns out not to be what was advertised or that you are unhappy with for some other major issue, chances are good that you will be able to reverse the charge by disputing it (assuming you’ve already asked for a return in the usual ways, of course). The credit card company may then refund your purchase and take over the task of fighting with the company for the funds for you, assuming the total is large enough. This perk has the ability to cut a lot of hassle out of your life.
The Next Step: Get Your Own Secured Credit Card Canada
Knowing what to do with a secured credit card Canada is one thing, but getting one for yourself is quite another. Bonsai Finance can help you to do that if you’re at all interested in it. You can view many offers for secured credit cards right from our website and even apply for them there too if it suits you. You’ll know you’re getting in touch with reputable lenders who you can trust with your deposit money and you won’t even have to go looking for them. With this option available to you, there’s no reason to even consider doing your secured card search alone.