Choosing a credit card among numerous alternatives is no mean feat. There are so many credit cards issued by different banks that knowing a difference between them can be mind-boggling. It seems next to impossible to remember what percentage each of the card charges and what bonuses banks give to you, when you apply for any of them. Nor is it easy to remember what initial deposits each of the existing credit cards requires. With such an embarrassment of riches, picking the right card for yourself is hard. Aware of the problem of customers face, we have decided to provide a list of credit cards presently available in Canada.
In what follows, we are explaining what benefits you will be given and what conditions you need to satisfy to receive each of the listed cards. Among them are balance transfer credit cards, rewards credit cards, student credit cards, and others. Those Canadians who wonder what is the best cash back credit card in Canada may familiarize themselves with the list of cash back cards given in the referred article. For other available credit cards, please read the paragraphs below.
The most common credit card is called plain vanilla. In the financial world, this concept refers to the most basic version of a financial instrument. It is the opposite of an exotic instrument, which changes the components of a traditional financial instrument, resulting in a better security. By analogy with a plain vanilla ice-cream which contains no nuts or chocolate, the plain vanilla credit card offers no rewards. Unlike other credit cards with more complex system of bonuses, this card is easy to understand.
Those Canadians who are not particular about receiving bonuses on their cards can be satisfied with the plain vanilla type. The most common plain vanilla cards issued in Canada are Vanilla Prepaid Mastercard and Scotiabank Prepaid Reloadable Visa. What these plain vanilla cards allow you is to have a revolving balance up to a specified credit limit. You use up your credit when you buy something. When you have made a payment, you obtain more credit. At the end of each month, a finance charge is applied to outstanding balance. The plain vanilla cards also have a minimum payment payable by a certain due date. Late payments incur penalties.
There is another type of the credit cards that, unlike the plain vanilla cards, offers rewards. Hence is the name: rewards credit cards. These cards offer rewards on credit card purchases. There are several types of the reward cards. You can have rewards in the form of cash back, points, and travel. When you use a cash back reward card, you receive back a percentage of your spent amount every time you make a purchase. Unlike other credit cards that give rewards in points or flyer miles, the cash back credit card offers you a monetary amount. You will receive between 0.5 percent and 2 percent of your purchases not including refunds as an annual rebate, usually credited to your credit card account. The best cash back credit cards in Canada are Scotia Momentum Visa Infinite, Meridian Visa Infinite Cash Back, and TD Cash Back Visa Infinite Card.
Other credit card companies may give you rewards in the form of points. Every time you swipe your reward credit card, you collect points, which you can later redeem for cash, gift cards, travel, or other merchandise. Note, however, that some cards will give you the same points for all purchases; others will give extra points for certain categories such as groceries, restaurants, or gas, for example. If you are an avid traveler, you might prefer the travel rewards credit cards. By using these cards, you may easily earn free flights or free nights in a hotel. Many travel credit cards also pay higher rewards on travel purchases than on any other purchases unrelated to travelling.
Some credit cards allow you to transfer balances. Called balance transfer credit cards, this type of cards offers customers a low introductory rate on balance transfers, though it does this for a certain, limited time. The balance transfer credit card is valuable to those Canadians who want to save money on a high-interest rate balance on their cards. But remember that balance transfer interest rates are not equal. Some credit cards companies even charge no interest rates. Yet they usually require card holders to make a minimum of two transactions per month. It goes without saying that the lower the promotional rate is and the longer the promotional period is, the more valuable the credit card becomes in the eyes of the customer. But to receive such a lucrative card, you need to have unblemished credit history. Among the best balance transfer credit cards in Canada are True Line Mastercard and Scotiabank Value Visa.
If you are a student at the University of Toronto or Humber college, for example, it makes sense for you to consider the student credit card. Credit card companies that issue student credit cards shut their eyes to a lack of credit history of their customers, understanding that young people simply cannot have any history to their credit. Those college students who want to receive a credit card will have no difficulty in obtaining the student credit card, finding this much easier than obtaining, say, the plain vanilla or cash back credit cards years later. Many student cards also give rewards and low-interest rates on balance transfers. Yet there is a caveat. When you come to apply for the student credit card in your bank, you need to prove to a manager that you have enrolled at a Canadian accredited college. Hence, it is advisable to bring your admission letter or a proof that you have paid for your program. Otherwise, your application for the student credit card may be rejected.
Other credit cards abound. All of them offer different interest rates and different rewards programs. Before applying for any of the credit cards existing in Canada, you should carefully study what they offer and choose the option the most relevant to your needs and financial goals.