The credit card has been one of the common ways to purchase. It made purchasing more convenient than carrying cash with you. If you are new to credit cards, choosing the type of credit card for you might be confusing as there are various types of credit cards. Choosing the best type of credit card in Canada that suits you will depend on your lifestyle and spending habit, which can be overwhelming.
How to Choose The Types of Credit Cards for You?
• Evaluate Your Spending Habits
When you are choosing a credit card, the first thing you need to do is to evaluate your spending habits. Identify which categories of your expenses you spend more money on every month. This will help you determine which credit card rewards program is best for you.
For example, if you spend a significant amount on groceries each month, a credit card with cashback rewards on grocery purchases may be your best option.
• Consider Your Credit Score
Check your credit score before applying for a new credit card, it will have a significant impact on the credit card you’re applying for. You can get a better interest rate and a high credit limit if you have a high credit score. On the other hand, you might not qualify for one if you have a low credit score.
• Understand the Reward Program
Each credit card has its own rewards program. Some credit cards offer cashback rewards, while others offer points that can be redeemed for travel or merchandise.
Understanding the rewards program and how you can earn and redeem rewards is essential. Some credit cards limit how many rewards you can earn, while others have no limits.
Additionally, some rewards programs may restrict how you can redeem rewards, such as blackout dates for travel rewards.
• Consider the Annual Fee
Some credit cards come with an annual fee. The annual fee ranges from a few dollars to several hundred dollars annually.
It would help if you learned how to justify the annual fee. Will you save more money if you choose credit cards with lower annual fees but no benefits and rewards? Or the higher annual fee can be justified with the rewards and benefits?
If you are still hesitant, try credit cards with no annual fees.
• Look For Additional Fees
In addition to rewards programs, credit cards may come with additional benefits. For example, some credit cards offer extended warranties on purchases, travel insurance, or roadside assistance.
Understanding the additional benefits and how you can use them is essential. If you frequently travel, a credit card with travel insurance and other travel benefits may be the best option.
• Compare Credit Cards
Once you have evaluated the specifics mentioned above, it’s time to compare credit cards. Various online tools can help you compare credit cards side-by-side. Look for a credit card that meets your needs and has the best rewards and benefits.
Types of Credit Cards
• Cash Back Credit Cards
There are various types of credit cards, including a cashback credit card. Cashback credit cards offer cashback rewards for purchases made with the card. The cashback you earn from every purchase will vary depending on the card and spending category.
• Travel Rewards Credit Cards
You can get rewards from this type of credit card if you use the card for travel purposes, like flights, hotels, and car rentals.
• Balance Transfer Credit Cards
This type of credit card allows you to transfer high-interest credit card balances to a new credit card with a lower interest rate, saving you more money in interest charges.
• Low-interest Credit Cards
These credit cards offer a lower interest rate than traditional ones, making them a good option if you carry a balance on your credit card.
• Secured Credit Cards
This type of credit card requires you to deposit upon opening an account as collateral. Secured credit cards in Canada are best for individuals with poor credit scores and trying to rebuild their credit.
• Rewards Credit Cards
These credit cards offer rewards points for purchases made with the card. The rewards can be redeemed for merchandise, gift cards, or other items.
• Business Credit Cards
These charge cards are intended for entrepreneurs and proposition rewards and advantages custom fitted to operational expenses.
Choosing the right credit card type for you can be confusing and overwhelming; however, choosing the right one will save hundreds of money in the future. You need to be patient in shopping for the best credit card and consistent with paying your credit card bills.
Credit Cards are more convenient to use when purchasing than using and carrying more cash with you. However, if you handle it wrong, it can go from convenience to inconvenience quickly.
Some individuals are scared to use credit cards, but there is nothing to be scared about. Remember to use your credit card responsibly and pay your balance in full each month.
With the right credit card, you can earn rewards and enjoy the benefits of credit card ownership. If you encounter some problems regarding your credit, feel free to contact Credit Repair Now Canada. We are always open to helping you and guiding you in your fruitful credit card usage.