Which cards can truly be called the best credit cards Canada is a question that can only be answered on an individual basis, but that doesn’t mean that there aren’t general trends that hold true. For the most part, getting one of the truly elite cards on the market will be something that you will need to work towards for some time before you can make it a reality. The things listed below are some of the key determinants that providers look at when choosing who will and will not get their very best cards. You probably can’t say you’ve achieved all of them yet, but with our advice to help guide you toward that goal, you maight be able achieve that in the future.
1. A Good Credit Score
It should go without saying that no credit card provider is going to give you one of their best cards unless your credit score is excellent. They want to know that they can trust you to pay off your balance regularly as you accrue it, and that is best determined by looking at your credit history as approximated by your credit score. The higher it is, the more consistently you have been able to prove that you can use credit responsibly and can handle having access to a coveted card without going overboard with it. You don’t just start out with a high score; you have to build it over time to get it to the level that is needed for this endeavour. This means that if you are extremely young or new to credit in general, your chances of starting off with one of the best credit cards Canada is extremely low.
That doesn’t mean that you can’t take some time to improve this aspect of your profile, though. Time is, in fact, often the one thing you need in order to get yourself a credit score that will make a good impression on any lender. As long as you spend enough time using credit regularly and paying off your debts as needed, you shouldn’t have any trouble getting your score to rise. Getting a lower-level credit card and using it at least a little bit every month is probably the easiest way to do this, but you can also make some headway by taking out loans, preferably ones with as long a repayment period as possible. You want to be able to show that when you get a new credit card in your hands, you will be a model borrower and work hard to settle that debt each month.
2. A High Yearly Income
Good credit will do a lot of the work for you in terms of being able to be approved for a good credit card, but most will also ask that you be able to prove that you have a high income as well. This is because good credit alone does not make a good financial profile – you could be homeless and penniless and still have a great credit score if the circumstances lined up right. Providers want to know that their best credit cards are going to be used both responsibly and liberally, and the best way to check that is to select for applicants who have plenty of money coming in to fund purchases. That way, they get cardholders who will not only pay back what they owe, but will also use their cards frequently enough to drive some profit for the provider.
So how much money is enough? It depends on the specific card you’re looking for. Some will take you at $60,000 a year in personal income or $100,000 a year in shared household income, but these are becoming less and less common as inflation whittles away at the value of that amount. You no longer support nearly as much discretionary spending with that kind of income as you once could, making it harder for credit card companies to draw in anough business from those customers to make it worth their while to offer them elite cards. These days, you are much more likely to need to hit $80,000 in income on your own or $150,000 as a household in order to get the best credit cards Canada to accept you. All the same, if you have a card in mind and your income falls somwhere in between these two points, you shouldn’t hesitate to check and see if that card is one of the ones with lower requirements. You might just get lucky and find that you’ve chosen well.
3. A Big Budget
Just because you make a lot of money doesn’t necessarily mean you’re going to be spending all that much each month. Maybe you send a lot of money away to your other family members or saving aggressively for your future instead of spending most of your income when it comes in. Whatever the reason for any discrepancies between what you make and what you spend, the amount that you typically charge to your credit card each month is an extremely important factor in whether or not a really good card would be of much use to you. You have to spend money with it to get rewards from a credit card, so it’s not necessarily worth going out of your way to get a great one if you’re not going to be spending that cash to begin with. Your reward yield will be small enough that the extras you receive from having gone out of your way to get the very best credit cards Canada won’t add up to much.
It’s hard to say that you should rearrange your financial priorities for the sake of getting a good credit card, but at the same time, getting one and never using it really won’t do you any good. Your best course of action – at least if your spending restriction is due to saving – might be to set a somewhat lofty goal for yourself and decide that when you hit that goal, you’ll save a little less and spend a little more. That way, you should still be able to keep yourself on the road to true financial prosperity without having to work with so little money for your daily life. If you’re not willing to bump up your budget just yet (and this is a distinct possibility, depending on what your reasons for being so frugal are), it might be a good idea to set your credit card dreams aside for the time being and content yourself with a middling card for now. You can always set your sights higher later on when you’ll get more out of your achievement.
4. Steady Employment
On top of a large income, credit card companies also like to see that most of your money is coming from a steady job. Most people who have the income required will meet this requirement as well, but not all – there are plenty of people who are self-employed who make plenty of money on a regular basis, but to whom lenders and card providers are skittish about lending because that income isn’t guaranteed. If your business was to fail or have a bad month, you’d be making less than what you usually would, and providers don’t want those dips in income to mean that you’ll fall behind on your payments. For this reason, they tend to avoid taking the chance at all.
If you don’t count as being steadily employed at the moment but are happy with your actual income, the easiest thing you can do to improve your credit viability is to pick up a part-time job. It doesn’t have to be anything huge, but once providers see that you have some income coming in from a regular employer who has agreed to give you a certain number of hours to work each week, they may be more willing to lend to you even if that job isn’t where the bulk of your money is coming from. You can also inquire about providing an extended income history if you’ve been consistently making a lot of money in your unusual working arrangement for several years now, since this pattern suggests that there is more stability in your income than they might have first assumed. Sadly, it’s always possible that even that level of assurance won’t satisfy a particular lender, but there’s nothing to be done in those cases but move on and hope that one of their competitors is more open to working with you. It’s not inconceivable that at least one of them will be.
5. A Willingness to Pay an Annual Fee
If you really want the best when it comes to credit cards, you’ll also have to be comfortable with paying a bit of money for it. All the best credit cards Canada has to offer charge an annual fee, and that’s a rule that goes without any exceptions – if it’s free, there is definitely something better out there, and you often don’t even need to look to another provider to find it. The usual charge is around $120, but many are beginning to charge $150 instead (again, inflation is mostly to blame) and there are plenty that charge even more than that. These costs serve as the final filter to weed out applicants who aren’t serious about the card they’re looking at and probably wouldn’t use it much if they did get it; those who are willing to pay are generally much more likely to want to get some use out of it. The higher the fees, the more exclusive the card generally is.
Becoming comfortable with paying fees like this is all a matter of perspective, so if you’re against it right now, all you really have to do is sit down and look at the value that the best credit cards Canada can provide for you. Often, it will be easy enough to make up for the annual fee they charge in rewards alone, leaving the rest as pure profit for you to enjoy. In addition, even if you don’t make a single penny (literally or in the form of gifts and other freebies) on your rewards program, these cards usually come with extensive benefits that you could easily argue justify the fees all on their own. You’d certainly pay more to an insurance company to acquire a year-long policy that covers trip interruption insurance, baggage insurance, emergency travel medical insurance, and all the other things that usually come with these elite cards. Think of it in those terms and you’ll see why it’s perfectly reasonable for providers to charge that much for these cards, even if it might seem like a big expense at the start.
Scope Out the Best Credit Cards Canada With Bonsai Finance
You know what you need to do in order to be eligible to get the best credit cards Canada; now it’s time to take a closer look at specific cards and see if any of them is good enough to be your ultimate goal. We have all the information you need on any of the top prospects in each of the possible reward categories, and we’re happy to share it all with you through our online portal. All of the providers we work with are well-known, reputable, and committed to providing the best deals and service for their customers. No matter which one ends up providing the card that you ultimately settle on, you’ll be content with your choice.