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Credit cards can help you build a credit history and maintain a good credit score. Here’s how to find one that suits your financial goals.
Critical to building a credit history, credit cards are a rite of passage into financial adulthood.
Even if you’re debt-phobic or have heard too many horror stories of people maxing out their cards, you can’t skip this step.
Cindy Marques, certified financial planner and director at Open Access Ltd., had one client in their 30s preparing to buy a home—while completely missing this piece of the puzzle.
“They went to see if they’re eligible for a mortgage, and their (credit) score was non-existent, because they just never had credit cards,” Marques said. “And they thought they were doing themselves a favour—‘I never had debt. So this shouldn’t be a problem.’”
Credit cards, however, are important tools to build credit history and maintain a good credit score, Marques added. Thankfully most of them come with perks too, catering to almost every lifestyle.
Many people default to picking a card from their bank because it’s easier, says Shannon Terrell, a finance writer and spokesperson for NerdWallet Canada. But it’s better to shop around, especially with online-only banks.
Scotiabank Passport™ Visa Infinite Card
SimplyCash Preferred Card from American Express
MBNA True Line Mastercard credit card
“Because they don’t have those same overhead costs as a traditional financial institution, they’re often able to offer better interest rates, lower fees, and better perks overall,” Terrell said. “So honestly, you have nothing to lose and everything to gain by shopping around.”
Marques agreed: just getting a credit card with your bank is a wasted opportunity.
Consider your lifestyle—where you are likely to do the most spending, where you might use rewards—to find your fit. A simple Google search will find many “best of” lists for cards in every category.
“They will do all the comparisons for you, across all the different providers, and you can organize a list based on: I prioritize Air Miles, I prioritize cash back, I prioritize low interest rates,” Marques said.
“They’ll compare all the providers with best in class in those categories, and show you their current rates, their current signup offers, et cetera.”
As for younger consumers, Marques said low interest rates aren’t typically a priority, assuming you aren’t already managing a lot of credit card debt and you’re not transferring a balance.
Instead, travel rewards and cash back from your favourite retailers are likely the biggest returns on your spending, she said. Options with no annual fees are also valuable for someone just starting out, although there will be fewer rewards.
When getting a new card, there isn’t much room for negotiation, Terrell said—what you see is what you get. If you want different or better perks, the provider will just point you to another card that offers them.
Negotiations come into play if you already have debt, Marques said, or are transferring debt between cards to take advantage of the lowest rate.
Using signup offers—such as zero interest for the first 12 months—with a balance transfer means you can get a break from interest and pay down your balance faster, she said. Or if you want to keep your current card, you can simply call your provider and move your balance to a lower-interest option.
“There is an opportunity to negotiate their interest rates or even negotiate on your annual fees,” Marques said. “I think a lot of consumers don’t realize that if you just call and ask … in a lot of cases, they will.”
In terms of hidden fees, Marques said most costs are upfront—annual fee, interest, ATM withdrawal fees, and so on. Read the full details about the card.
But some add-on insurance, such as balance protection, can be costly and challenging to claim. For many, Marques said, it’s better to skip. Often people sign up because they don’t know what the insurance is for, and lack the savvy to understand it’s unlikely they will ever claim it, she added.
Late and over-limit fees are penalties that young consumers should become familiar with quickly, Terrell said. You can be dinged as much as $60 for going over your credit limit.
The other “sneakier” cost, she said, is the foreign transaction fee—not something people think about upfront, but many use their credit cards when they travel.
Even a card hyped up for travel rewards often still charges a percentage, usually around 2.5 per cent, on the transaction amount, Terrell said. Frequent travellers should seek out cards that advertise no fees for shopping while out of country.
As for hidden perks, many cards automatically carry insurance for purchases or travel, and Marques said these are usually under-claimed in the industry.
Credit card providers often have unused budgets for this coverage because people forget to claim them. Read the booklet that came with the card. Rental car company asking for extra insurance? New laptop broke down? If you paid with your credit card, Marques said, call them up.
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Last Friday I applied and sought out an increase to $60,000 on a RBC credit card in Canada. Today is Wednesday ,February 5. 2025 and although I have not heard back from the bank, although my goal is to only use $20,000 as regardless of the bank that you borrow from you should take into account credit utilization. I never borrow from the banks any other way and I route the funds into my corporate bank accounts. I trade stock and am a private investor! Hence the gamble to seek higher returns in the market .
I don’t recommend people use them as they are seriously prone to financial destruction of a very serious nature. They can very easily go off the rails leaving the card holder dealing with the aftermath of misinformation as to the terms and not always because of misunderstanding by consumers or clients but most often by employees of the large Canadian banks. I have and currently due have balance transfer loans currently out! I have done balance transfers with all of them and on average the amount is usually $20,000 that represents roughly 40% credit utilization I can live with that but some times I go much higher depending on the offer 1% is really very good but then I need to take into account the time frame the banks have allowed? In Canada it is unlikely to go past a year !
Because I don’t have personal consumption debt that is particularly high if any really taking into account societal norms and my spending habits . I am particularly prone to trying to buy on a personal consumption level at .10 cents on the dollar . I am not a monk nor am I particularly high on the release of my carbon footprint while I am on this planet .
It would be my opinion that no other loan agreements in Canada or the United States from my understanding can come close to the rates. No! Canadian or American should the use and need be there? Can find a better rate or terms .
Although this is true they are deadly to the user if not treated with respect as to the financial damage to your personal financial reputation regardless of being warranted or not would be the most likely outcome for the over extended financially .
I use them I have done dozens but I believe the risk is great to those that currently want to borrow from Peter to pay Paul.
PS
The positives might be subject to consideration in the Canadian Banks ability to keep really very detailed records. I try to also consider the risks to the banks while recognizing really great rates and the allowance of such loans as it is privilege although a privilege that can wipe you out financially .
Edward HC Graydon
Graydon Investments Group LTD
Basically and regardless of the type of loan or the way they are structured balance transfer cards offer the lowest rates in the United States and Canada . But again for the sake of transparency I use them as the only method of borrowing . But they are not conducive in allowing use during the process except for the stated purpose of the loan amount that was designated the reason for need .
Balance transfer cards if you are lucky enough to have been given the offer are a financial blessing and nightmare both wrapped up in one
Personally I have never found a better loan rate and nor do I believe one can be found so in my opinion balance transfer cards are the cream of the crop.
I will clarify, I suppose any Canadian who wanted a higher credit limit might be able to pledge assets with the goal of doing a balance transfer amount much higher although this might not change the frequency that they are renewed.
I never pledge my assets to the bank on credit cards but I suppose one could and be able if so inclined but regardless of who you are in Canada within reason it is going to be difficult to obtain credit card limits that are really high without pledging assets against the loan to the banks.
But even if you decide you wanted to go that high with the goal of doing a balance transfer, I would challenge any Canadian regardless of who to find a better way to borrow money with rates that are below prime.
You cannot unless the banks waive all the fees as a form of customer service gesture.
And after all this if you still want the loan and you are currently holding debt you will more than likely fall victim to balance transfer loans that at times resemble predatory loans that after a while given what they really are you will become financially ruined on average.
Edward HC Graydon
Graydon Investments Group LTD