How to Get a Credit Card in Canada: The easy steps

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If you’re wondering about how to get a credit card in Canada, you’ve come to the right place. Many people assume that applying for a credit card is a straightforward process (which it is), but there are a lot of variables to consider. Every credit card has different qualification requirements and the card you apply for plays an important part in your financial welfare. That’s why knowing how to apply for a credit card is so important.

How to get a credit card

Applying for a credit card is a simple process. Generally speaking, it can be done in three ways:

  • Apply online – Generally speaking, the easiest way to get a credit card is to apply online. You would fill out all of your information, and then wait to find out if you’re approved or not.
  • Apply in a branch – Applying for a credit card at your financial institution is another option you have. While going this route can take longer and may require paperwork, your relationship with your bank may affect the outcome of your application. For example, you might be approved for a better card due to your history with the financial institution.
  • Apply in a store – Some stores have representatives that can sign you up for a credit card right away. This is similar to applying online, but the store rep will do the application for you. This can be beneficial as often you’ll get instant notice of approval. If approved, there’s usually some kind of bonus you get right away.

While some credit card applications can be approved right away, others may take anywhere from one to 10 business days for a final answer. In some cases, the credit card provider may ask you to contact them to verify your information before approving your or not. 

If approved right away, some credit card issuers will give you a virtual number that you can use immediately to make online purchases. Otherwise, you’ll need to wait for your physical card to arrive. Now you know how to apply for a credit card in Canada.

Credit card application requirements

If you’re still wondering how do I get a credit card for the first time? You need to understand that every credit card provider will have requirements for you to be approved. Generally speaking, you’ll need the following minimum application requirements:

Income requirement

Most credit cards have a minimum annual personal or household income requirement. For entry-level cards, the income requirement is usually $0 – $12,000. Premium credit cards typically have a requirement of $60,000 – $150,000. To be clear, household income refers to all people in the home so you can combine the incomes of you and your partner to qualify. It’s also worth mentioning that American Express typically doesn’t have an annual income requirement to be approved for some of its cards. 

Credit score

Generally speaking, most credit card providers require you to have a minimum credit score for you to be approved. Some providers only require a fair standing (560+), but some premium cards likely have higher requirements and want you to have a good credit score (660+). Note that when you apply for a new credit card, a hard inquiry will be performed that will slightly reduce your credit score.

Your age

To qualify for a credit card, you must be at least the age of majority in the province or territory in which you reside. It’s still possible to get a credit card if you’re a minor, but you’d have to be a supplementary user on someone else’s account.

Residency status

You must be a Canadian citizen or a permanent resident to be approved for a Canadian credit card. That means your home address needs to match your credit report address. That said, it is still possible to be approved for a Canadian credit card if you’re Canadian and living abroad. You would just need someone to physically pick up the credit card from your Canadian address or you would need to request the card be mailed to an alternative address.

Social insurance number

Credit cards will require you to have a Social Insurance Number (SIN) to be approved. Since your SIN is tied to your credit report, the credit card bureaus will check your credit history to see how creditworthy you are before approving you or not.

How to pick a credit card

Knowing how to get a credit card can be an intimidating process when you have hundreds of cards to choose from. That said, there are a few things to consider that will help make your decision process easier.

  • Do you want to pay an annual fee? There are many great no-fee credit cards on the market. That said credit cards that have a yearly fee typically come with better perks.
  • What kind of rewards do you want? Cash back cards are popular since they’re easy to understand, but travel rewards programs can be more valuable. Store credit cards are also worth considering if you shop at select merchants frequently. 
  • How important is the interest rate? If you suspect that there will be times when you won’t be able to pay off the full balance of your credit card, it would be a better idea to get a credit card with a low interest rate that offers balance transfers. 
  • What is the welcome bonus? Credit card providers are always changing their sign up bonuses, so browse the providers to see what card offers are currently available.
  • What additional perks do you want? Some benefits cardholders may get include no foreign transaction fees, travel insurance, mobile device insurance, and more. 

How to get a credit card with bad credit 

Most credit cards require you to have at least a fair credit score to be approved. This obviously presents a bit of a challenge for people who have bad credit. To improve your credit score, you need to use credit. However, with bad credit, you can’t get approved for credit. It’s literally a Catch-22. Fortunately, there is a solution if you find yourself in this situation.

If your goal is to improve your credit score, then you should get a secured credit card. With these types of credit cards, you load security funds onto your card. That money then acts as your credit limit. For example, if you load $500 as your security deposit, you’d have a limit of $500. As you pay off your bills every month, your progress will be reported to the credit bureaus (Equifax and TransUnion). Over time, your credit score will slowly increase, which will allow you to apply for unsecured credit cards later.

Another option is a prepaid credit card. The name prepaid credit card is a bit deceiving since you’re not getting a traditional credit card where you get an interest-free loan. With prepaid credit cards, you’re preloading funds which you could then spend later. This option is handy for anyone with bad credit or for those who want to manage their money.

How do I get a credit card for the first time? 

Asking how do I get a credit card for the first time is not an odd question. They don’t exactly tell you how the process works in school. As explained above, you’ll want to apply online, visit a branch, or sign up in a store. 

That said, if you’re a student or new to Canada without an established credit history, you’ll want to apply for a credit card at your financial institution. That’s because your bank will likely have student or newcomer banking packages available. These packages will often include the option to sign up for a credit card. The requirements to qualify for these types of credit cards are usually much lower than going the traditional route.

How to use credit cards responsibly

Knowing how to get a credit card in Canada is just one part of the process. You also need to know how to use your credit cards responsibly. Here are some tips to keep you on track.

  • Try to pay your bills on time and in full every month. By doing this, you’ll improve your credit score and avoid interest charges.
  • Watch your spending. Don’t fall into the trap of charging your purchases with no idea how to pay off your bills. As a general rule, try to keep your credit utilization ratio below 35%. That’s where your balance doesn’t exceed 35% of the total credit you have available.
  • Review your credit card account regularly. It’s always a good idea to go over your statements line-by-line each month to ensure that all the posted transactions are yours. If there’s anything you don’t recognize, it could be a sign of fraud.
  • Keep your card secure. Make sure that your PIN is not easy to guess and if you ever lose your card, report it right away.

About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

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