Your First Credit Card or How to Start Your Credit History
Credit History, Credit cards, Visa, MasterCard, and American Express- things that often confuse and fascinate people who are new to Canada.
Everybody around uses those plastic cards and it feels like the right thing to do to get one too. And getting a credit card is a wise choice.
Credit cards are convenient and very useful. They allow you to make a purchase today, but you don’t have to pay for it for 5- 6 weeks.
You can use it to set up regular payments for dental insurance, rent, utilities and other services, without having to remember when it’s due. With a credit card you can make purchases online or by phone, which is very convenient. Credit cards are essential part of our lives now.
The way it works is that the merchant or a store agrees to accept a lower payment from a bank- issuer of the credit card. The difference, often 2.5% -3%, goes to the bank to cover the overhead costs, licenses etc. The remained is the bank’s profit.
It is also beneficial for the merchant- it increases sales due to the convenience of cashless transactions and the ability of customers to borrow. It also reduces the occurrences of employee theft.
Credit card holder receives a short term loan for 4-6 weeks as well as other rewards from the issuing bank. Aside from those perks, your first credit card allows you to build up your credit history and finance future large purchases such as a car or a house.
It may be difficult for the newcomers to obtain their first credit card. First, you have to spend some time in Canada, get a job, and develop good spending habits. Moreover, different banks have different requirements for credit card applicants. Bank of Montreal, for example, used to only issue credit cards to their banking customers.
Usually, you have to spend at least 6 months in Canada and be employed for at least 3 months to be able to get a credit card. Some banks are more liberal in their requirements and might issue a credit card more easily. Those banks are Royal Bank, Citibank and Capital One.
About 10 years ago I signed a contract with a bank to issue credit cards for my clients. It’s absolutely free and you don’t need a credit history to get it. Once you activate our credit card you will receive a gift from the bank- $10 credit with participating stores, restaurants and other merchants. Moreover, you will get 1% in cash back rewards on all purchases as well as $10 store credit every year. The only thing you need to get this credit card is a recommendation from me. All the required information as well as my recommendation is included on the application form that we can submit on your behalf.
If you are an existing client or would like to use our services you can contact us to receive your first credit card.