How to choose the best credit card with no credit history
You want a credit card, but you’re not sure how best to do it. This guide explains how to get a credit card, but let’s first take a look at the benefits of having a credit card. Now that we have discussed some of the benefits of credit cards let’s discuss how to get a credit card, including how to find and apply for the right one. Here is the step-by-step process:
Determine what you are looking for with a credit card.
Before choosing a credit card, it helps to know your needs and how you plan to use your card. Do you want to open a credit card account to start establishing credit? Or maybe you have an excellent No Credit History and want to be rewarded for your purchases? If you’re looking to rack up rewards, it’s helpful to assess where you spend most of your money. Some cards give you more rewards if you spend your money at grocery stores, gas stations, restaurants, and travel. When you know where you are spending most of your money, you can choose a card that gives you additional rewards for these types of expenses. Perhaps you are looking for a credit card with specific features or benefits. When you know what you want from a card, you can determine the type of card you are looking for.
Know the various types of credit cards
Now that you have determined what is most important to you check out the different types of credit cards on the market and who they are for. This can give you a better idea of the type of card that meets your needs, which helps you further refine the card that works best for you.
Here are the most common types of credit cards:
Cashback: Regularly pay your balance in full and want to get rewards for your expenses
Travel bonuses: Travel frequently and want to earn travel rewards
Balance transfer card with TAP introductory offer 0%: Transfer a balance to another credit card and want to transfer your balance to save on interest charges
Credit cards with a guarantee: Want to establish your credit history, and you may not be eligible for a traditional unsecured credit card
Student credit cards: Are young, have less credit experience and are looking to build your No Credit History Are young, have less credit experience, and are looking to build your credit history
Know the stuff to think when deciding a credit card
Now that you have chosen your ideal credit card type, you need to further refine your credit card search by choosing a credit card with features that will benefit you the most.
If you regularly carry a balance on your credit card, consider choosing a card that offers a low-interest rate. Note that you will not be able to choose your exact APR since the issuer determines it once your card request is approved. But you can check out the range of TAP and how it compares to that of the other cards you plan to apply for.
Credit cards are not only a great way to earn rewards – they can offer additional benefits. Common travel benefits include travel insurance, trip cancellation insurance, roadside assistance, and car rental insurance. Some credit cards also offer extended warranties on goods beyond the standard manufacturer’s warranty.
To encourage you to register, many credit cards offer you a registration bonus. Some credit cards also offer higher rewards for the first few months after you sign up. Often you have to spend a certain amount of money during a specific period to qualify.
Choose a credit card that offers rewards that not only will you enjoy, but that are easy to redeem. It is important to note that some reward programs are simple, while others are more complicated, but you can earn more rewards. You have to consider this trade-off when shopping for a credit card.
This is important to consider, especially if you are a big spender or if you and your partner plan to share the same credit card. You will want a credit limit that is high enough to meet your spending needs. You will not be able to choose the exact credit limit because the issuer will choose it for you based on their assessment of your request. But you can check the minimum and maximum credit limits offered to get an idea of the credit limit you will get if your application is approved.
Some credit cards have an annual fee to keep your account open (often in exchange for more valuable rewards). Make sure the rewards are worth it compared to the annual fees charged to you, you’d better go for a credit card with no annual fees.
Foreign transaction fees
If you travel a lot for business or pleasure, consider applying for a credit card with no foreign transaction fees. This will help you save money when shopping outside of Canada or in foreign currency.
Be aware of any other additional fees you have to pay. Before opening a credit card account, knowing the fees and the number of fees can help you avoid surprises. Here are some common costs to keep an eye on:
Late Fees: If your credit card bill payment is late, you may be charged a late fee / or a higher interest rate.
Over Limit Fee: You may have to pay this fee if you exceed your credit limit.
Balance Transfer Fee: If you transfer a balance from another credit card, you may be charged a fee.
Cash Advance Fee: You will be charged this fee if you get a cash advance from your credit card.
Inactivity Fee: You may be charged a fee if your credit card is inactive for a certain number of months.
Determine which cards you will likely get based on your credit profile
To improve the chances that your credit card application will be approved, you need to know the types of credit cards that best suit your credit profile. Each credit card is designed for a specific range of credit scores, so you should apply for cards that you are most likely to get approved for.
Frequently asked question
How does applying for a credit card affect my credit scores? When you apply for a credit card, the issuer usually runs a registered poll.
Once you’ve chosen the credit card that’s right for you, it’s time to apply. In most cases, you can apply for a credit card online, and sometimes you will know within seconds if your request has been approved. Before applying for a credit card, take the time to read the credit card application disclosure agreement to make sure you are aware of the terms and conditions. When you start filling out the application, you will be asked for basic information. This may include the following information:
You must have your social insurance number on hand as you may be asked for it (while, in most cases, you are not required to provide it).
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