Getting a credit card is exciting, as you can get the chance to earn rewards, build credit, and expand your purchasing power. However, many credit card options are available. Each has many features, benefits, and drawbacks to weigh in against others. As a result, narrowing down your options might seem challenging. Fortunately, you can easily find the right card by following a few simple steps. The following steps can help you choose an excellent credit card that benefits you financially:
1. Check your credit score
Your credit score is vital in determining which credit cards you can qualify for. Credit scores in Canada range from 300 to 900, with a higher score giving you access to more exclusive cards, lower rates, and better terms. If you have a lower score there are still plenty of great options available. You can check your credit score for free with Canada’s two credit bureaus, Equifax and TransUnion.
2. Consider your needs
Once you know your credit score, consider your spending habits and lifestyle to better understand what you need in a credit card. For example, perhaps you have a large family and spend more on groceries. A card with a healthy cash back rate might work well, especially if it lets you earn more while grocery shopping.
Another example would be if you commute or travel frequently using your car. A credit card with gas rewards can allow you to earn more cash back to their respective stores when you spend money on fuel.
Those with lower credit scores may consider building their credit score to access more card options. In this case, you may prioritize a secured card — these tend to be easy to qualify for and offer paths to unsecured credit.
3. Research credit card features
Researching the features credit cards have to offer is a good starting point. For instance, Visa and credit card Mastercard are both widely accepted by millions of merchants worldwide.
Many companies offer credit card comparison guides and articles to see popular cards’ features, benefits, and drawbacks side-by-side.
Additionally, consider factors such as the following:
- APRs: This is the rate at which interest accrues and is added to your balance if you carry one. APRs can vary based on factors like the card you have and your credit score.
- Cash back rewards: Some cards pay a flat cash back rate on all purchases, whereas others may pay a higher percentage on spending in certain categories.
- Fees: Credit cards may charge annual fees, late fees, cash advance fees, foreign transaction fees, and more. Compare fees and fee amounts across credit cards.
- Introductory offers: Features like welcome bonuses and 0% promotional purchase or balance transfer APRs can help you save money and reduce interest expenses.
4. Consider a prequalified credit card
Prequalification means a card issuer performs a soft inquiry on your credit score to see if you’re a good candidate for their card. The issuer then offers you terms you are likely, but not guaranteed, to qualify for if you apply. This soft inquiry does not hurt your score — unlike a hard inquiry, which occurs when you apply for a credit card.
A prequalification offer is not a guarantee. However, these can help you narrow your search to cards that better fit your score and needs, saving you time and maximizing your approval chances.
Credit card issuers may send prequalification offers through the mail with a code you can use to apply online. You can also find issuers that let you fill in information online and get prequalified instantly.
5. Research the customer experience
A card might offer excellent features, but you must also make sure cardmembers enjoy using it. Start by researching the card’s customer service options. Credit card issuers may offer phone support, live chat, email help, and self-service content like articles and videos. Read reviews about customer service to understand their quality better.
Furthermore, you can research online and mobile app features by reading reviews and watching videos. An up-to-date online web portal and mobile app can help you pay your bill on the go, redeem your rewards, and navigate your card more easily.
The bottom line
With so many credit cards out there, it’s vital to do research so you can determine the right card for you. Start by checking your credit score and thinking about what you need in a credit card. Then, research your card options by examining each of their features and reading comparison articles.
Look into customer service and mobile or online app experiences as well. Finally, consider applying for a card you are prequalified for, since this can help you narrow your choices and maximize your approval chances. Following these steps will simplify your search and help you find a credit card that suits your needs, spending habits, and lifestyle.
Name: Carolina d’Arbelles-Valle
Job Title: Senior Digital PR Specialist