Moving to a new country is always a project which requires some time adaptation.
Canada is known to welcome thousands of new immigrants per year.
But while it’s essential to focus on all administrative tasks to do when you arrive, applying for a credit card is highly recommended to build your credit score history as soon as possible.
Why You Need to Apply for a Credit Card As Soon As Possible
Building Your Credit History
One primary reason to get a credit card as soon as possible is to build his credit history in Canada.
When you get one, you’ll be able to make transactions with it.
By doing so, you’ll get a credit score that will improve or decrease depending on your correct card utilization.
Usually, credit card issuers report people’s transactions to the central credit bureaus, such as TransUnion and Equifax.
Then, these bureaus will use your credit card activity to create your profile, which will become the basis for credit scores.
But the main difficulty for a new immigrant is to be eligible to apply for a credit card due to this non-existent credit background.
All financial institutions don’t offer this possibility.
Fortunately, we made this complete list of Canadian banks with active offers for newcomers.
Some of the best credit cards are available only with a specific credit score reached, so if you would like to get one, you should start building your credit history quickly!
Shop Whenever and Wherever You Want (Even Online)
No matter where you are, your new favorite card always comes in handy when buying goods.
Many stores generally accept them.
Plus, you get the possibility to shop online, a non-negligible feature that most debit cards can’t do.
But sometimes, you can have some stores making a declined payment because your card type is unavailable.
It’s also a wise idea to carry at least one card of each type at your side in case of unexpected events.
That’s why picking up between MasterCard, VISA, and American Express should not be taken easy but also based on your purchase habits and usual stores.
So, you can still shop conveniently when there’s no nearby ATM to withdraw your funds or when you don’t want to be hassled by going there.
Besides not needing to carry cash, you also don’t have to count your change, as you can simply view all your transactions in the credit card statement.
However, it’s not advisable to pay using your card all the time because the credit card company will charge a transaction fee.
Sometimes you’ll even find stores that charge USD dollars instead of CAD dollars, even here in Canada.
That’s why you should always ensure that you will be charged in the common currency when you make transactions.
In addition, keep in mind that there’s a credit limit that you shouldn’t exceed and many deals in Canada that will give you great discounts as you pay in cash.
Enjoy Cash Back and Rewards
Through this card, you can either fancy reward points or cashback as you spend.
Whether you are paying for your new pieces of furniture or paying restaurant bills, you can get points that you can convert into items later.
Or money.
It depends on your credit card type, as you can apply for a cashback credit card or one coming along with a rewards system.
Personally, I’m using a rewards one because I can spend my earned points on gift cards or even convert them into cash on online partner stores.
Some users use their points to pay their annual fees, purchase gift cards, book a hotel, or even redeem travel rewards to explore fun places.
Insurance On Purchase
Many people forget about this, but most cards come along with some exciting insurance on purchases.
Some premium cards offer even insurances such as travel and health.
Depending on what you choose, it can sometimes be worth paying the annual fees for a premium card.
So, aside from all the excellent benefits I discussed above, it’s great to get something more out of your card, right?
Avoid Fraud
Unlike debit cards, credit ones are not linked to checking accounts.
Meaning, all your payments won’t be immediately deducted from your own money.
It’s likely a debt that you have to refund.
The credit issuers will be the ones paying the card transactions until you pay your outstanding balance.
But the pro here is that credit users have additional security later than debit cards to avoid fraud and unexpected expenses.
How To Get Your First Credit Card?
Every newcomer can get confused about the steps of applying for a credit card.
However, if other immigrants were able to do it, you surely can overcome the challenges.
With this proper guide, you’ll have a good chance of getting approved and establishing your credit profile.
So, just take a look and follow the guide below to get started:
Determine Your Purpose
Before you proceed with your online application or visit a credit union, it’s crucial to identify your purpose for getting a card.
So, determine if you want to open an account to make cashless purchases, earn a cashback reward, start building an excellent score, etc.
Below are some of the main types of credit cards you can choose from:
- Low-Interest Credit Cards – good for individuals who need to use their cards frequently.
- No-Free Credit Cards – best for students, or for people who want to conveniently pay bills online.
- Rewards Credit Cards – earn rewards for purchases, like travel rewards, cashback, and more.
- Balance Transfer Credit Cards – for purchasing products or services online or paying off other debt.
- Secured Credit Cards – ideal for building credit scores.
- Business Credit Cards – similar to personal credit cards, but mainly used for businesses.
Once you already know your purpose and have chosen the type of card you need, it’s time to proceed to step 2.
Compare Your Choices
There are a lot of credit card issuers out there that offer the same types.
However, they differ in benefits, billing period, and the transaction fees you’ll have to pay.
Thus, you need to be wise about picking the best out of your options.
Here are some of the major banks in Canada that offer credit cards for immigrants:
Royal Bank of Canada (RBC)
- No credit history requirements
- No annual fee
- Get 2500 points as a welcome once approved
- Earn 3500 points when you link your card to their app within 60 days
- Enjoy up to a $15,000 credit limit
National Bank of Canada
- Receive your card without credit history
- Earn $15,000 reward points upon approval
- Get purchase protection and travel insurance(depending on the card type)
- Get more benefits when you apply for a credit card for professionals
Scotiabank
- Use up to $15,000 card limit
- Earn cashback or convert your points into movie tickets and more
- No required credit history
- Earn competitive bonuses after application success
Desjardins
- Earn cashback and reward points
- Use cards with no annual fee (varies on the type)
- No credit history and security deposit required
TD Bank
- Get 1 year Amazon Prime membership when you qualify
- No credit history needed
- Earn welcome bonus (conditions apply)
- No annual fee
Tangerine
Unlike the financial institutions above, Tangerine is an online-only bank that doesn’t have physical branches.
However, they have credit accounts that are open to newcomers.
But you’ll need to have an existing Tangerine checking account before you can open it.
Plus, you have to be a permanent resident of Canada.
So, if you will only go to the country to study or work temporarily, you won’t be eligible for a Tangerine credit card.
Here are the benefits of getting a Tangerine credit card:
- No annual fee
- Earn 15% cashback
- Unlimited money-back rewards
Prepare the Documents and Required Informations
When applying for financial products and services, some information and documents are crucial to be provided.
So, if you will open your own credit account, these are the things you need to prepare as an immigrant:
- Government-issued ID/ Passport
- Must be 18 or above
- Permanent resident card or confirmation of permanent residence
- Work permit (for foreign workers)
- Social Insurance Number
- Proof of enrollment (for international students)
- Security deposit (if required)
- Minimum income (amount depending on the bank)
Not all card issuers have the same requirements.
For more information, you can contact the bank or credit union through phone or email, visit their website, or the physical branch.
Start with Your Application
After completing all the steps I discussed above, it’s time to start with your online credit card application or go to a credit union branch to open an account.
If you go for the convenience of an online application, you simply need to visit the website of your chosen card provider, fill up the details, submit the credit requirements, and pay the refundable security deposit.
The amount will depend on the card issuer and your chosen card type.
Wait for the Card
Although most online applications will give you instant results, the card will still take about two weeks to arrive at your mailing address.
Besides that, there are applications that can take up to a few days.
So, be patient about it and start enjoying the benefits of your credit card when it finally arrives.
Conclusion
Having a credit card can help you in many ways as you settle in Canada.
You’ll get to fancy such great benefits as convenience, rewards, insurances, and especially start establishing your credit history in the new country.
By following all the steps I discussed today, you can take your first step and start getting newcomer credit cards.
However, keep in mind that the advantages of owning a credit card also come with responsibility.
Therefore, do your best to follow the credit terms to avoid credit card fees and consider the tips mentioned above.
For more financial advice and resources, please feel free to browse our blog page.
