Choosing one of the best credit cards in Canada can feel like an impossible mission. There are dozens of cards to choose from, and each one has its pros and cons. But when you dig a little deeper, there’s often a card or two that’s ideal for you. To narrow down your choices, you need to consider your situation, what rewards you like and your spending habits.
Before you apply for a credit card, you need to know your credit score. Checking this number helps you decide which credit cards to apply for. If your credit score is between 660 and 900, it’s considered good to excellent, and you will likely be eligible for more credit cards. If it’s lower, you still have options for cards that will help you build your credit.
You can check your credit score through the credit bureaus, Equifax or TransUnion. It might be free, or you might need to pay a fee. Some financial institutions also allow you to check your credit score for free.
Some credit cards require a minimum personal or household income for you to be eligible. Any income requirements will be clearly outlined during the application process. If your income doesn’t meet a card’s requirements, it’s better to apply for a different card instead.
Generally speaking, there are three types of credit cards:
All credit cards are designed with a specific purpose, so you should choose one that matches your needs.
A rewards credit card is the best choice for someone who has a good credit score and doesn’t typically carry a balance. You can earn points on every purchase you make, which can be redeemed for cash, free flights or other benefits.
Anyone currently carrying a balance on another credit card should consider a new low-interest credit card, especially one with a balance transfer option. By moving your balance to a card with a lower interest rate, you could save money in the long run.
Student or entry-level credit cards offer an excellent way for people to start building their credit scores. If you’ve run into credit issues in the past, a secured credit card can help you rebuild your credit score.
Once you’ve figured out your goals, you need to ask yourself a few more questions to help narrow down your choices.
Even after considering these questions, you’ll likely still have quite a few choices. At this point, look at the fine details to help you settle on the right card. Consider factors like:
Finding a perfect match is rare, but you’ll likely be able to find a card that ticks many of your boxes.
Choosing the right credit card can help you achieve your financial goals by earning rewards, reducing debt and increasing your credit score. Take the time to apply for one that’s right for you, and reap the benefits.
Barry Choi is a personal finance and travel expert. His website moneywehave.com is one of Canada's most trusted sites when it comes to all things related to money and travel. You can reach him on Twitter: @barrychoi.