An Overview of Canadian Credit Cards   by Morgan Hamilton

Canadian credit cards are very similar to those offered in the United States. All of the major credit card companies offer credit cards to Canadians and some major retailers do as well. There may not be as many choices, but there are still plenty to choose from. It is just as important for a person to compare Canadian credit cards as it is for those in the United States. Credit problems can arise no matter which country you live in.

Visa and Mastercard are the most common credit cards. There are a couple popular choices in Canadian credit cards for each. The Horizon Plus Mastercard is a secured card, which means a person has to deposit money into a savings account which becomes the balance for the card. The Horizon Plus Mastercard is designed to help those suffering from bad credit or bankruptcy. It requires a minimum deposit of $500 and includes a processing fee and a monthly fee.

It is also not available to residents of Quebec. Another Mastercard choice is the Petro-Points Mastercard. This Mastercard offers rewards for discounts on gas purchases. The discount only applies to select Petro stations. Visa offers the Home Trust Secured Visa. This secured card can be opened for any amount between $1000 and $10,000. It also earns interest on any amount left unspent. This card in not available to residents of Quebec. Another Visa option is the TD Green Visa. This card has no annual fee and offers rewards on car rentals. These are only a sampling of some of the secured and unsecured Visa and Mastercard credit cards available in Canada.

As mentioned, it is important for every person to control their credit card debt. With the secured cards that is made easy since a person can not spend more than they have deposited in a savings account. However, unsecured cards offer the potential for careless spending. All balances need to be paid off and the longer a person takes to pay them off the higher their balance due becomes. To avoid the risk of credit troubles or bankruptcy a person needs to charge responsibly.

Canadian credit cards offer the same benefits as American credit cards. Canadians may be more limited in their choices, especially when it comes to reward programs, though. As far as having charging power, though, Canadian credit cards are still good wherever Visa or Mastercard is accepted.

Getting Your First Credit Card   by Debbie Dragon

Many times people who have never had a credit card or any other form of credit think that the banks will turn them down for lack of credit history. While this may be true in some cases, no credit does not mean you have “bad credit”, and provided you have a steady income, chances are you will be able to obtain a credit card.

In fact, there are many banks that routinely offer Visa or MasterCard credit cards to first time applicants. Everyone must establish a credit history somewhere! If you have employment or other means of steady income, select a bank and apply for their credit card. Don’t run out and apply at ten different banks attempting to increase your chances, because that will actually have the opposite effect. Each time you apply for credit, whether it is for a credit card or a loan of some sort, the lender makes an inquiry on your credit report. Rejections show up on your credit report, and multiple rejections send off a red flag to potential creditors that you are desperate for cash- and therefore might have difficulty repaying the credit.

If your first attempt to getting your first credit card doesn’t land you a card, there are two other things you could do to start building your credit to remedy the situation. First, head to your favorite department store and try getting a store specific credit card. These department store cards are easier to get than a Visa or MasterCard, and you will most likely be approved for one of these cards even if you’ve never had credit before. Once you have a department store card, buy something and then pay it off when the statement arrives. You might want to do this for a few months, making purchases and paying them off when the statement arrives. This will start establishing a credit history, and it will show that you make your payments on time. Once you’ve done this for a few months, you can try to apply for the Visa or MasterCard again. The banks will then have your income and a credit history to use as a basis for determining whether or not to extend you credit.

Another option to establish your credit when you don’t have any, is to get yourself a secured credit card. Secured credit cards are limited to the amount of money that you deposit with the credit card company, so essentially, they are a debit card that is not connected to a checking account. While they have their disadvantages, a secured credit card is a viable option for someone who is having difficulty establishing a credit history and obtaining their first credit card.

In the process of establishing your credit history with your department store card or secured credit card, it is absolutely critical that you do not have late payments or miss a payment. However, you may opt to carry a small balance from one month to the next on your department store card as it will show potential lenders that you are able to handle an outstanding balance. For example, if you’ve made a purchase or purchases that total $100 in your first month, when you get your statement, pay $70 and allow $25 to carry over to the next month. When the next statement comes, pay the $25 and half of whatever purchases you’ve made since your last statement.

As long as you consistently pay your bills on time, and do not carry a large balance from month to month, you are establishing a strong credit history. A few months of these good credit habits and you should have no problem when you apply for a Visa or MasterCard.