What is the best credit card for you? In less than 60 seconds, CardFinder selects the options that best suit you without affecting your credit score, no SIN required.
There is currently a lot of information about how credit cards work and why it is important to use them responsibly, but not much is said about the process of applying for a credit card. Canadians apply for credit cards every day, and the application form can seem like just an exchange of information. However, in order for your application to be approved, credit card issuers must review your current financial situation. To do this, they need to check your credit report, which means that each request can lead to a slight and temporary drop in your credit score – especially if your request is denied.
Prerequisites for a credit card application
Submitting a store credit card application is your way to request access to credit. The main risk for a credit card issuer is to lend you money that you cannot or do not want to repay. He therefore does not know if he will ever see this loaned money again. This is why to apply for a credit card, you must prove to the card issuer (the lender) that you are a responsible and capable borrower.
In addition to basic personal information, such as your name, date of birth (you must be 18), social insurance number (SIN) and address, a credit card issuer may also require following information:
- Your professional situation (your current job and how long you have worked there);
- Your monthly income, broken down by source;
- Details of any other credit cards you have;
- Details of any other monthly debt or obligation, such as a mortgage or car loan.
In addition to all of this, the card issuer will also want to check your credit history. As part of the application process, you must authorize them to perform a background check on you with one of Canada’s credit reporting agencies. The agency will provide the issuer with a copy of your credit report, including your credit score. Your credit score reflects your payment history on other debts.
Minimum income requirements for credit cards
All the information the credit card issuer obtains about you is used to determine whether or not to grant you access to credit and, if so, how much credit to extend to you. The amount of your annual income can have a direct impact on the choice of credit card to which you are entitled and the amount of credit you will be granted.
For example, if you have a limited income, you should only get a small amount of credit to ensure that you can afford to pay your balance in full each month. On the other hand, if you have higher incomes, you may be able to afford to use some premium credit cards with higher annual fees and credit limits, because the credit card issuer may find that you earn enough money to pay off your balance.
Find the best credit cards without affecting your credit score
Apply with confidence. In less than 60 seconds, CardFinder selects the options that best suit you without affecting your credit score, no SIN required.
Information provided to you in your credit card application
Although it may seem like you’re giving out a lot of information to get that new credit card, as a consumer you have the right to access certain information for yourself. More specifically, the company issuing the credit card must communicate to you all the important information concerning the credit card that it will issue to you. In Canada, all of this information must be in an information box:
- The annual interest rate
- The number of days of the interest-free grace period
- The method of calculating the minimum payment
- How the minimum payment amount is calculated
- Foreign currency conversion fees
- Annual fees
- Other account and transaction fees
| Initial credit limit | $5,000 |
| Annual interest rate | 19.99% on purchases, 24.99% on cash advances and balance transfers. The APR increases to 24.99% in the event of late payment, exceeding the credit limit or violation of contractual conditions. |
| Interest-free grace period | 21 days |
| Calculation of interest | Interest is calculated using the average daily balance method |
| Minimum payment | Either 3.00% of your balance or $10, whichever is greater |
| Foreign Currency Conversion | 2.50% |
| Annual fees | $99 |
| Other expenses | Balance transfer fee: 1.00% of amount transferred Additional copy of statement: $5 Overlimit fee: $25 |
Credit card application approval time
For most credit cards, it takes between 5 and 7 days for the application to be approved, but it can take up to 30 days.
For some credit cards, you can apply online and find out if your application has been approved almost immediately; these are instant approval credit cards. If your application is successful, however, you will need to wait 5-7 days to receive the card in the mail, as approval is subject to a background check, i.e. review of your credit and your credit score.
How to activate a new credit card
If your application is successful, or if an existing credit card expires and needs to be renewed, a new card will be mailed to you. Once you have received your new credit card, call the toll-free number on the back of the card to activate it.