Canadian Credit Cards

“What’s in your wallet?”

“Don’t leave home without it”,

“PRICELESS!”

Just some of the many slogans that we have become familiar with over the years thanks to the marketing departments of Credit Card Companies. Credit Cards have come a long way in a short time, and not for the best in all cases.

Everywhere you turn, there’s someone asking you to apply for their card. You may been approached everywhere from Airports, Sporting Events to standing in line for a concert by “Marketing Teams“, usually offering a “Free Gift“ in exchange for your application.

There is a constant stream of letters in the mail offering “low rates” to transfer your debt from one company to another. Many promotions and perks, everything from Air Miles, Aero Plan Miles, Cash back Offers, Road Side and Travel Assistance, credit cards are becoming very complex.

These days, Credit Cards are rarely being used for their intended purpose of being an “in between” to be paid off every month. Now more than ever, Credit Cards are becoming the “medium” of choice above cash and cheques which are becoming obsolete by the day, especially with Electronic and Online banking becoming more and more convenient to never have to actually touch cash or write a cheque.

Consumer credit is reaching epidemic proportions across North America. Many people living well beyond their means, with the trusty “Credit Card” giving them the power to “buy” things even when they don’t technically have the money to do so.

We live in a society of “I want it, and I want it NOW”. Credit card companies love every minute of it. And they are hoping that you will BUY NOW and PAY LATER…MUCH Later.

Credit Card companies allow borrowers to maintain the account by making minimal payments, while the interest keeps accumulating, keeping borrowers on the “credit card“ treadmill, really hoping that you never get off.

Traditional credit cards offered by Canadian Banks are facilitated by the 2 main Credit Card companies Visa and MasterCard. These cards range between 10-20% interest rates, and are usually “no fee”, but, that too depends on the card and the “perks” associated. (example, Gold or Platinum).

But, over the last few years, many Credit Card Companies such as Citibank, Capital One, MBNA, have flooded the market place. Based on the overwhelming amount of credit card usage, many companies and stores are jumping on the bandwagon to cash in on this trillion dollar a year industry.

Wal-Mart Visa and Canadian Tire MasterCard are just some examples of collaborations between stores and credit companies to increase their exposure.

Commercial Credit Cards utilized by many retail and department stores are a different story. These cards are usually “financed” by companies such as Wells Fargo, GE Capital and Citi Group, and therefore, charge much higher interest rates.

Companies such as HBC (Zellers/The Bay), Sears, Future Shop, Best Buy, etc., have rates around the 28% range, making them a less attractive alternative.

Credit Cards, when used for their intended purpose are a very valuable financial tool. These days, it is impossible to rent a car, book a hotel, or a vacation without the use of a credit card. Also, with online shopping becoming the method of choice, a credit card is usually a pre requisite.

But, if you plan to carry a balance, seek a lower cost alternatives such as a Line of Credit, where interest rates are usually half that of a standard credit card.

Read all applications carefully before applying to ensure you get the card that is right for what you need, and that there are no fees or extra charges for unnecessary bells and whistles attached to the card.

To re-establish or repair your credit consider the benefits and ease of use of a Secured Credit Card.