Credit cards are incredibly popular in Canada. 31.8 million Canadians hold one or more credit products. 

Credit cards are about more than just building credit. You can track your expenses, share joint expenses, earn rewards and book travel ahead of time. With a credit card, you can access funds the moment you need them. You can also give additional cards on your account to family members to ensure they have access in an emergency

If you’re thinking of getting one, let’s dig into what they offer, why they benefit you and how to choose the one that’s best for you.  

You’ll build your credit, plus a whole lot more 

Getting a new credit card or a first credit card and using it responsibility are effective ways to establish a credit history or rebuild a low credit score. With a good credit score, getting a loan may be easier or mean a lower interest rate.

The number one reason people choose a credit card is the rewards associated with it. Whether you’re looking for cash back, flexible everyday points or travel rewards, ensure you look at the card's benefits and find the right card for your needs. 

Beyond building your credit or enjoying rewards, credit cards are also a way to protect yourself against fraud and theft.  

If you carry a balance, switch to a low-rate credit card

If you don’t pay off your balance every month, switching to a low-interest card could save you thousands.

Almost all providers offer a preferred rate credit card option for you to consider. Choosing this option might mean giving up certain rewards or benefits, or having to pay an annual fee. But it's important to compare those rewards and fees to the number of dollars you’ll save.

If you’re interested in cash back, consider a credit card that offers reward points

These cards are ideal if you want to be rewarded with cash when you buy something. 

Purchases eligible for cash back—and the percentage of cash you receive—will vary from card to card.

Some cards give higher points on the dollar for certain items, like gas, groceries, dining and entertainment, while others give the same amount for all purchases.

This is where you should think about your lifestyle and spending habits (and align them with the available cards). If you drive a lot, a card that gives you a higher percentage back for gas purchases might make sense.

If you like to hop on a plane, consider a travel rewards credit card

If you love to travel, these credit cards could be the best option. Look for travel rewards credit cards that are flexible, with no blackout dates, so you can travel whenever you want.

You can use points to book flights and also get valuable extras, like holiday and auto rental insurance, which can save you hundreds of dollars. Some cards also let you cash in points for electronics, houseware, jewellery, accessories and gift cards.

With all cards, keep your eyes open for welcome and bonus points when you first join—these can be worth hundreds of dollars.

The annual fee dilemma: to pay or not to pay

Paying to use a credit card feels counterintuitive to lots of people. But hear us out—these fees can be worthwhile.

Let’s start with low-rate credit cards. Whatever annual fee you pay for the card will be small compared to the amount of interest you’ll save by switching. 

It’s also worth considering the benefits of the card’s rewards and perks (built in insurance coverage and services, lounge passes, money back) as you weigh the pros and cons of an annual fee.

When it’s time to choose the card that’s right for you, do the math: determine your annual savings with each card and see if the savings is worth more than the fee. Plenty of credit cards will waive the annual fee for the first year, so you’ll have plenty of time to decide if that card is worth keeping.

Boxes to check before applying

There is a credit card out there that’s perfect for you. But you may not qualify for every credit card because of your household income or current credit score. 

Choosing a credit card that fits your life

As you narrow down your credit card options, you’ll need to factor in your financial situation and your spending habits. The right card is the one that works best for you and your lifestyle.

With many credit card options to choose from, we’re confident you’ll likely find one that matches your needs. 

Need some help figuring out what’s possible? Give us a call and we’ll chat about finding the right credit card for you.