You really need to be careful if you want to get the right credit card, so we are here to help you with the list of how to choose the best Canadian credit card in 4 simple steps. Insider Monkey have made an excellent research for us.
The first thing is to consider your needs, and the pros and cons of different creidt cards. When you haven chosen your future credit card, you will open an online account and set up auto-pay options. You can find large number of options on the Canadian market, so Insider Monkey have narrowed the best options for you.
Now without a further ado, let’s see the four steps related to choosing the best Canadian credit cards.
You need to take into account your long-term financial plans in order to get the most suitable credit for you and for your plans. At first let’s check out the main catagories of credit cards.
Low-interest cards – it’s good for people who have debts and they are planning to decrease it, or for those who carry a monthly balance
Balance transfer card – it’s for those who carry a balance. You don’t need to face with interest after your transfer from your current bank.
Cash back card – for those who can pay off the full balance in time.
Travel cards – it’s name shows its purpose, it’s for those who travel a lot, as it offers benefits for future trips.
Extra: Specialized credit cards
Student cards – it provides you with lower credit limits and special discounts for students
U.S. dollar cards – you don’t need to pay conversion fees, if you have expenses in US dollars.
Retail cards – offer discounts at specific retailers.
2. Compare interest rates and commissions
When it comes to credit cards, we are generally careful, as there are offers that seem to be too good to be true, and many times these offers contain some traps, such as commissions and high interests. Therefore the first thing you need to take into consideration the interests, processing and transaction fees. Checking out these factors, you can narrow the options. The next thing is to look after the benefits you can get by the credit card. Cash-back values, insurance packages, welcome bonuses, and discounts are just a few of the many benefits that can assist you to save money in long-term. If you pay off your balance regularly, or don’t make transactions, interest rates don’t matter too much. But you need to know that some credit cards offer low interest rates only for a limited period. There are other fees that you need to take into consideration, such as insurance fees, foreign currency charges, annual fees, dishonored payment fees, over-the-limit fees, or inactive account fees.
3. Cash backs of credit card points?
Both types of credit cards have their own pros and cons, and it depends on your spending habits which one you should choose.
Credit card points – Reward point systems are generally used for travel purposes. You need to know that credit card providers ofer you several options to redeem your points, travel options have the most benefits. If you spend your holidays abroad it’s the best if you choose an airline-branded credit card. But if you spend more on accomodation, you should choose a hotel credit card.
Cash backs – similarly to the travel card, you need to check out your spending habits, and choose that card that gives you the most benefit. For instance if your income is based on gas money, the best choice would be the card that offers you cash back points at gas stations.
4. Best credit cards in Canada
Everyone has different financial needs, but here you can find the cards that are suitable for most people.
– Best overall card – American Express Cobalt – Although it has an annual fee of $120, it offers many benefits such as 30,000 welcome bonus points.
– Best low-interest card – American Express Essential – no annual fee, low interests, 0% return
– Best cash back card – Scotia Momentum Visa Infinite – No annual fee for the first year and a 2.03% return rate.
– Best gas card – American Express Gold rewards card – $150 annual fee, 25,000 reward points.
This was the article about how to choose the best Canadian credit cards in four steps. We hope you will find it useul!