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What You Need to Know About Getting Your First Credit Card

Are you prepared to get your very first credit card? Credit cards may be a useful financial tool, but they may also enslave you with excessive debt and unsustainable payments if they are used improperly.

When considering your first credit card, it's critical to understand how credit cards operate, the pros and drawbacks, and if you'll get approved. Here's all you need to know about it.

How to qualify for a credit card

With a credit card, you may make purchases now and pay for them later. Credit card firms, on the other hand, seek to guarantee that their consumers will use their cards to make payments. To be eligible for a credit card, you must satisfy the following fundamental requirements:
  • Minimum age of majority of 18 or 19, depending on your home province
  • Be a permanent resident or citizen of Canada
  • If you’re applying for an unsecured credit card you can’t have an undischarged bankruptcy.
  • An acceptable credit score
  • A social insurance number

Why your credit score matters

Your credit score is a numerical representation of the risk you pose to a lender when you borrow money, and it important since it influences the chances of your credit card application being accepted. If your credit score falls below the minimum needed by the bank or lender, your application may be denied. Customers with poor credit scores may be offered a secured credit card by certain businesses.

Simply simply, a better credit score indicates to lenders that you are a reduced risk.

Choosing the right credit card

Today, Canadians may choose from a broad range of credit card categories, each with its own set of rewards, bonuses, and cost structures, such as:
  • No annual fee credit cards
  • Cash back credit cards
  • Loyalty points
  • Secured credit cards
  • Unsecured credit cards
  • Low-interest credit cards
  • Elite credit cards
Consider what you want to use the card for as well as your financial status when selecting a credit card.

No-fee credit cards
A no-fee credit card is a suitable starting point for first-time credit card applicants who don't spend enough on their card to justify annual fees, or who don't spend enough on their card to justify annual fees.

Cash back credit cards
If you use a credit card for most of their day-to-day spending, a card with cash back rewards might be for you. These cards can help you earn cash back rewards in specific spending categories, like grocery stores, travel, or gas stations.

Secured credit cards
Consider a secured credit card if you're attempting to establish credit for the first time or rebuild your credit following a bankruptcy discharge. A secured credit card requires you to provide the card company with "security," or anything of value, such as a guaranteed investment certificate (GIC), which they may cash in if you fail on your credit card payments. An unsecured credit card, on the other hand, does not need to be secured.

Low-interest card cards
You'll have a debt on your credit card if you intend to use it to make a purchase that you won't be able to pay off each month. You may do this as long as you pay the bare minimum each month. In this instance, a credit card with a low interest rate can be a smart option.

Elite credit cards
Elite credit cards normally have an annual charge and a minimum income requirement to qualify, but they often come with better rewards and privileges. Our Visa Infinite Card, for example, is a premium credit card with significant cash back returns and extensive travel privileges.

Access to exclusive airport travel lounges, special events or discounts, and supplementary insurance coverage for out-of-country travel, theft of products bought on the card, and rental vehicle insurance are just a few of the travel advantages available.

How to apply for a credit card

Every credit card has its unique application procedure, which may be completed online, in person, or over the phone. Once you've decided the card you'd want to apply for, make sure you have the following information:
  • Full name and address
  • Social insurance number
  • Income information

How long does it take to get a credit card?

Your acceptance might be instantaneous depending on your credit history, income, and if you already have a connection with the financial institution or credit card business offering the card.

If your credit card application must be examined and authorized by a human rather than a computer system, it might take a few days to a week to get acceptance.

What to do if your application is rejected

Don't be alarmed if your credit card application is turned down. Instead, take a close look at some of the most frequent reasons why banks refuse credit card applications so you can figure out what you need to improve:
  • Poor credit score
  • Bad track record of repaying loans or other bills
  • Low income/too much other debt
  • Short employment history

Take advantage of this opportunity to improve your financial status and raise your chances of being approved the next time you apply. You may get a free copy of your credit report to double-check your information before beginning to develop or improve your credit score. Look for strategies to increase your earnings and/or pay off other debts. Reapply once a period of time has elapsed and you have a more solid work history.

Tips for using your credit card

Keep an eye on your credit card use to make sure you don't go over your credit limit, since this might harm your credit and result in extra fees. Keep in mind that you must pay your minimum payment on time and in full. Avoid holding a balance on your card to avoid interest costs; instead, pay down the whole amount each month.

Credit cards are useful. A credit card, when used appropriately, may help you manage your finances, improve credit, and even save money via rewards points or cashback.

It's a luxury to be given a credit card, so use it as such. Otherwise, you risk losing access to it and hurting your credit score.