How can I get a credit card?
Categories: Credit & Loans
If you are a new arrival to Canada, you will unfortunately not have a credit rating. This can make it hard to get a credit card.
Banks and other lenders check your credit rating whenever you apply for any kind of loan or credit, including a credit card. Without a credit rating it is impossible to get a normal credit card from a Canadian bank. Conversely, without a credit card, it is extremely difficult to build a positive credit rating! Newcomers to Canada can find it very hard to build up a credit rating and get a credit card or other loan.
Although you cannot get a normal credit card from a Canadian bank, you may be able to apply for a secured credit card. A secured credit card is credit card that is secured against a deposit that you make to the bank, or against a piece of property that you pledge as collateral.
If you apply for a $500 secured credit card, you bank will ask you to put $500 in a deposit against your card. Think of a secured credit card as a pre-paid credit card. (Some banks even call them pre-paid cards.) A secured credit card is of little-to-no risk to the bank, so you can apply for one even if you do not have a Canadian credit rating. However, you must have enough cash or collateral to equal the amount you pledge for your secured credit card.
If you pay off your balance every month and demonstrate that you can use credit responsibly while using a secured credit card, your credit rating will increase enough to apply for a normal card or other type of loan.
A secured credit card is a great way to build up a credit rating in Canada from scratch. Ask your bank if they offer the service.
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