What is a Personal Credit Card?

A personal credit card is described as the most adaptable and suitable payment method for ordinary consumers. Credit cards grant cardholders interest-free credit when they buy any goods or services from retailers.
One fitting description of personal credit cards is given by key.com : Credit cards offer convenience, safety, and the ability to buy what you need without having to carry cash. With a credit card from Key Bank, you’ll also receive fraud protection, 24-hour card member service, price protection, and more. Whether you’re a college student or an individual looking for a credit card that offers rewards on purchases or platinum purchasing power, we have a credit card to meet your needs.
This article tells credit cardholders about advantages of credit cards; steps in acquiring credit cards; and, the types of credit cards in Canada.

What are the Advantages of Credit Cards?

Credit cardholders have free access to unsecured credit with interest-free payments. As soon as payment for purchases is made, you get hold of these services and commodities. There are numerous benefits and rewards like rebates, points for air travel, comprehensive warranty programs, car insurance as well as damage or loss insurance coverage. There is also protection for fraud and zero liability for cardholders in case of any deception. A lot of banks offer consumers an assortment of products so their clients can opt for regular cards which do not have annual fees. There are also low-interest rate cards. Consumers should be familiar with details about credit cards such as long-term borrowing requirements.

What are the Steps in Acquiring Credit Cards in Canada?

The approval of credit card applications depends on the person’s credit history. Your personal credit score is reported by two credit bureaus which are Equifax and Trans Union. Credit numbers range from 300 to 900 with higher numbers indicating a more favourable credit score. This allows you to get a larger credit limit when you apply for a credit card.
For immigrants, foreign credit history is not applicable in Canada. That is, Canadian credit institutions and banks do not recognize foreign credit scores. This can make it quite difficult for newcomers to Canada who want credit cards. However, as we shall see, there are several options for those who are interested in quickly obtaining a Canadian credit card.
If you are coming to Canada from overseas and a bank in your own country allows you to keep an account open after you have moved to Canada, you ought to do this. You can use your overseas card in Canada while you build up your Canadian credit score. You are permitted to see copies of your credit reports and scores without penalty by contacting Equifax or Trans Union in writing and requesting your credit score be delivered to you by snail mail. Other methods, such as "free online credit score" agencies, will also reveal your credit score, but may penalize you by lowering your credit score if numerous credit score requests are made in a limited period of time. The Government of Canada has published "Understanding Your Credit Report and Credit Score," a tutorial that walks you through a sample credit report and its interpretation. This resource is often the only explanation for Canadians trying to interpret a credit report. It is available free of charge through the Financial Consumer Agency of Canada.

What are the Types of Credit Cards?

1. Secured credit cards
A secured credit card is not a typical line of credit. While it offers an agreed credit limit and charges interest on balances, applicants need to offer some sort of "security" for the credit issuer. This could be in the form of a cash deposit or personal possessions that can be collected in the event a balance is not paid off within a previously agreed time frame. Secured credit cards are the card of choice for many newcomers to Canada as they allow speedy credit reporting within Equifax and Trans Union when balances are paid off and can quickly establish a credit score in Canada. However, secured credit card issuers are legally permitted to seize assets or other security put forward if a balance is not paid off in a certain time frame.

2. Joint credit cards
Joint credit cards offer the cardholder an unsecured or "regular" credit card when a second name, which is usually one with an established Canadian credit history, is added to a card. This can either be in the form of friends, family members, or work colleagues. Joint credit cards offer the flexibility of having unsecured credit, but carry a personal liability in that its joint holder or co-signer is permitted to use the credit card at will and can quickly accumulate debt that might legally become the responsibility of the original applicant.

3. Retail credit cards
There are numerous retail outlets and financial related businesses that offer unsecured credit cards. These are typically offered through a loyalty scheme or incentive to shop within a designated place of business, such as Presidents Choice Financial Points MasterCard. It offers points that can later be exchanged for groceries or other items within a President's Choice supermarket. Retail credit cards are usually regarded as easier to acquire than typical credit cards offered by banks, but tend to be issued with high interest rates resulting in payments that can quickly spiral out of control if a balance is not paid off by its due date.

Credit Card Regulations

The Canadian government says that new laws apply to credit card loans offered by financial institutions. These are regulated by the federal government. The regulations enhance consumers' access to clear information about key details of these financial products, such as interest rates, fees and penalty charges. They look after the rights of consumers by limiting certain business practices of financial institutions.

References

cba.ca
livingin-canada.com
key.com