Canada is well-known worldwide for its timely growth and the ease it serves its residents, whether locals or ex-pats. Even with all of the amenities, financial stability may still be lacking. Thus, banks facilitate credit cards in Canada to help residents build their credit and give themselves a financial buffer. So before you apply for the best credit cards in Canada, go through their briefs thoroughly to understand why and which card you must apply for.
Some of the Best Credit Cards in Canada
Applying for a credit card is safe when you know the benefits of the card you are applying for. Thus, we have listed the five most preferred credit cards in Canada and their benefits to help you choose the best.
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American Express Cobalt Credit Card
It is amongst the most reputable credit card companies in the world. This card costs approximately $12.99 per month and comes with some benefits. American Express has always provided the points facility for credit cards. This particular card provides 30,000 bonus points if a user spends the required amount in the first year. Also, a card holder could get 5x points on food and drink purchases and 2x points on travel-related expenditures.
The interest rates of American Express credit cards are 21.99% on cash advances and 20.99% on purchases.
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Neo Mastercard
This is one of the renowned credit cards that provides instant online approval to applicants with a 600 credit score. The Neo Mastercard in Canada is one of the most preferred cards, as it provides a huge cashback of 15% on the first purchase. This credit card has no annual charges. Instead, it offers 1% cash back on all purchases and 5% cashback to the Master card partners.
Neo Master card has a broad list of partners listed on its website, or you can also inquire about the same via their customer support service. The interest rates on the Neo Master cards are 21.99%–26.99% on cash advances and 19.99%–24.99% on other purchases.
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KOHO Prepaid Visa
The Koho prepaid visa credit card is designed specifically for those with poor credit, and it functions as a prepaid credit card for users. The major advantage of using this card is building your credit while utilising your own money and not going into debt. A prepaid card has no interest rates and zero annual charges whilst offering 0.50% cashback to the user on all purchases. Also, you could be the lucky one to get 1.20% on your loaded card balance.
What is a Secured Credit Card in Canada?
A secured credit card in Canada does not need credit history and can be applied for without considering credit scores. If you are approved for a secured credit card in Canada, you will have the best opportunity to demonstrate to your lender that you can handle credit responsibilities.
Having an approved secured credit card means you are liable to repay your credit each month, if possible. If it is not possible for you, then relax. You can just keep the balance below 35% of your credit limit.
If you follow the above-detailed criteria for the secured credit card, you can eventually qualify for the unsecured credit card in Canada. In this way, you can take advantage of the benefits of unsecured credit cards and the reward points and sign-up bonus.
How to Apply for a Credit Card in Canada?
It is always important to remember that a credit card impacts your credit score. So we suggest you avoid applying for several credit cards at a time to check which one approves your application. Thus, before you apply for a credit card in Canada, you must cross-check your financial situation first to see which card will benefit you the most.
Ask these below questions yourself to understand your needs and financial situation:
- What is the motive of a credit card? (for enhancing credit scores, paying bills, or an emergency fund).
- How do you intend to utilise it?
- Do you want to attach a family member or partner to the card?
Compare the Benefits Before You Apply for a Credit Card
Here is the list of important things you must beware of before you apply for a credit card in Canada:
- Ease of use- if you apply for a credit card from your current bank, it will be easy and quick to provide you with online access while connecting it to your bank account.
- Additional benefits: Most credit cards offer additional benefits such as cashbacks, payment protection, roadside assistance, travel insurance, and extended warranties. Therefore, look into all the benefits and choose one that suits you the best.
- Income requirements- your annual earnings will impact your credit score and the cards you apply for.
- Knowing the associated fees if you want to use your credit card to plan your trip.
- Late payment fees: Some credit cards charge late fees if you miss a payment or pay after the due date. Also, these late charges could increase your interest rate, so make sure you avoid late payments.
- Annual fees: Annual fees on credit cards can range from $0 to $100 or more per year. Some credit cards could also provide you with the first year fee.
Apply for a Credit Card in Canada
Here is the requirement list following which you can easily apply for a credit card in Canada:
- Your full official name
- Your date of birth
- Your current home address in Canada
- Your contact details
- Your email address
- Proof of your employment status.
- Proof of your annual income or your spouse’s income (if applicable)
Wrapping it Up
Credit cards provide the convenience of paying off your bills and building your credit for future needs. The credit card application procedure might seem overwhelming, but it is easy when you know which card to apply for and what all the required documents are. Thus, it is a piece of advice to understand the benefits, interest rates, and feasibility of each card before you apply.
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Frequently Asked Questions (FAQs)
To qualify for a credit card in Canada, you must be of age 18 or older, have permanent residency in Canada, your credit score must meet the eligibility criteria, and also, you need to have a social insurance number.
The minimum annual salary required to avail of an unsecured credit card in Canada is $12,000.
Yes, non-residents of Canada are eligible to get a credit card. Non-residents or newcomers can apply for a credit card even if they have no previous credit history in the country. Thus, as a non-resident, you can still apply for various cards, like prepaid cards, secure credit cards, and store cards.
First of all, along with your legal name, email, and date of birth, you need to submit proof of your current employment status and proof of your gross annual income. Also, you are required to submit your residency status by your current and past addresses and social insurance number.
Yes, you can apply for a credit card in Canada. But for that, you will need to meet the eligibility requirements, such as income and credit score, to be approved.
In order to get credit in Canada, you must first apply for a credit card, loan, or line of credit. Most lenders will require you to have a good credit score in order to be approved.
In order to be eligible for a credit card in Canada, you must be 18 years of age or older, have permanent residency in Canada, and have a valid Canadian credit history and social insurance number.
Yes, credit scores do apply to Canada and the same is used to assess a consumer's creditworthiness. How do I qualify for a credit card in Canada?
What is the minimum salary for a credit card?
Can foreigners opt for a credit card in Canada?
What documents do I require to apply for a credit card?
Can I apply for a credit card in Canada?
How do you get credit in Canada?
Who is eligible for a credit card in Canada?
Does credit score apply to Canada?
