5+ Best Credit Cards To Build Credit Score In Canada - thecanadianguy.com (2024)

The world is increasingly gaining financial independence with every passing day and banks play a pivotal role in this journey. There are tons of financial instruments to help the masses to make easy payments and avoid the hassle of dealing in cash.

Among all, debit and credit cards are two of the most common instruments you will find in every wallet. Credit cards have a certain way of functioning which is the most different and you must research well before picking the right credit card for yourself.

With that said, it is essential to realize your requirements and where you stand financially before getting a credit card.Now,

What is a credit card?

A credit card is a financial instrument in the form of a rectangular piece of metal or plastic shape that allows you to carry out cashless transactions. It is issued by banks and enables the cardholder to pay for goods and services.

Credit cards come with the condition of a pre-set credit limit. While debit cards directly deduct the amount from your bank account, credit cards allow you to borrow the amount based on your accrued debt. You can thus pay against a line of credit provided you are well within the pre-set credit limit.

Should You Get A Credit Card?

Whether you need a credit card or not depends on factors like your lifestyle and financial needs. Credit cards are a good option for those who have a habit of spending on purchases regularly.

They use it to buy goods and services and then pay the credit card balance back within the said time. This develops a great history and credibility and enables them to go for better cards.

A good credit score proves your creditworthiness and helps you when you apply for a house loan, car loan, etc at lower interest rates.

So if your financial habits are of this kind, then you should consider using a credit card, otherwise, a debit card is something that you should stick to.

Credit Card Requirements

There are certain details you need to disclose while applying for your credit card. A Social Security Number will be needed to check your credit reports, for assessing your creditworthiness.

Some basic information such as your name, date of birth, address, and phone number are essential in the process. You might be asked to furnish details about your employer and income.

The Social Security Number is important as it records your entire borrowing history. Credit card issuers will investigate your credit reports which are generally created by credit bureaus.

Remember that you might not necessarily be able to get a credit card if you just have a good credit score. The reason is Issuers will thoroughly check your income and debt levels before handing you a credit card.

5 Credit Cards To Build Credit Score

While credit cards are useful, choosing a good credit card is crucial. It helps you to enjoy reward points and other benefits. Check out the five credit cards mentioned below and decide according to your needs.

Petal 1 “No Annual Fee” Visa Credit Card

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Cons:

If you are in search of a credit card that doesn’t burden you with the condition of keeping a minimum security deposit, this is what I would recommend to you. With no annual fee and a regular APR of about 22.24% to 31.74%, it is a great option for those with not very good credit.

This credit card is issued to people by WebBank. This credit card will help bring your credit score to a better condition for sure. Petal’s algorithm can easily analyze and study bank information and trends to assess your way of handling income, payments, and savings.

Capital One Platinum Credit Card

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The Capital One Platinum card also has great reviews from users. This is a viable option for fair credit and helps rebuild credit levels for those who don’t have good credit score or credit history. There is no annual fee applicable if you opt for this card.

Also, another highlight is that the card reports bank information to the three significant credit bureaus every month. So there is transparency and authenticity to the fullest.

So, it is one option you must not ignore if you want a card that can build your credit without shouldering the burden of paying high fees.

All you need to do is pay your monthly credit card bills before the due date. Also, make sure to maintain the balance below the pre-decided limit of Capital One Platinum credit cards.

Discover it Secured Credit Card

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High regular APR

The Discover It Secured credit card requires a minimum security deposit of $200. However, the plus factor is that there are no monthly, annual, or one-time fees. The APR on purchases is estimated to be 24.49% (variable).

It has good rewards such as 2% cash back at gas stations and restaurants on up to $1,000 for the combined purchases for every quarter. Also, there is an unlimited cashback of 1% on other purchases.

This card is worth it because it doubles the rewards you earn in the first year. Although it has a minimum security deposit criterion, still it is quite reasonable for a secured card.

Capital One QuicksilverOne Cash Rewards Credit Card

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Cons:

This card has an annual fee of $39 and an APR of 26.99% (variable). There are great rewards such as 1.5% cash back on all your purchases every day. Cash backs will never expire all through the span for which you have the account.

You can enjoy 5% cash back on rental cars and hotel accommodations if you book them through Capital One Travel. It is a great pick for general use and attractive rewards, especially for people with low credit.

Its cash-back earning rate is much ahead of that prevailing in the market on average. The only drawback that makes users hesitant to choose it is the annual fee.

Credit One Bank Platinum Visa for Rebuilding Credit

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Cons:

There are no one-time and monthly fees for this credit card. However, an annual fee of $75 applies for the first year and that of $99 from the next year onwards. The APR on purchases is estimated to be 25.49% (variable).

You can enjoy rewards such as 1% cash back on eligible gas and grocery purchases. Cashbacks of 1% also apply on the internet, mobile phone, satellite TV, and cable services with certain terms and conditions.

It is another great card for those with bad credit. The best part is that there is no minimum security deposit and regular credit-bureau reporting.

What to check while choosing a credit card?

A bunch of factors influence your choice of a credit card. Firstly, credit cards should have a low-interest rate. This is crucial since it will not be harsh on your pocket if you ever have a balance. You must also know the repercussions of not being able to pay your dues on time.

Rewards in the form of cashback, points, and other benefits also attract users when choosing the best credit card. Perks such as trip cancellation coverage are quite useful and can help save you loads of money.

Finally, assess your financial habits, needs, and lifestyle to decide which card to take. Those who go on trips frequently can pick the one with travel perks.

With that said, I recommend you don’t get a card with a long range of rewards if your objective is only to build credit. Choose a card that especially comes with the purpose of credit rebuilding in that case.

Conclusion

The first step in acquiring a credit card is to determine if you require one. You must decide if a debit or credit card is better for your needs.

Once you’ve decided, conduct thenecessary study to select the ideal card for yourself. When you’re ready to apply for a credit card, choose from the options given above. It’s a one-time opportunity, so make it count!