Compare credit cards in Canada

A credit card allows you to charge purchases to your card which you’ll then pay for later. Each month you’ll get a statement showing what you spent over the previous month, and you can either pay off your balance in full or just pay the minimum monthly payment (typically 2-3% of your outstanding balance).

Unlike a loan with a rigid repayment schedule and a fixed end date, credit cards give you some flexibility and are open-ended. The credit’s there when you need it, and you can pay off your debt as fast or as slowly (within reason) as you like.

There are plenty of situations when a credit card could be a smart choice. For starters, used carefully, they can be a cheap – or even free – way to borrow. But even if you don’t need to borrow money, there are other benefits you may want to consider.

Some credit cards come with purchase protection, theft insurance and extended warranties so if something happens to great new TV you just bought you may be able to get a refund through your card issuer or their insurance provider.

If you’re young or new to credit, then you probably won’t have much of a credit record. If you’re planning to get a mortgage or perhaps car finance sometime in the future, then to get a decent rate, you’ll need to show that you’re capable of borrowing money and repaying it on time. A credit card is one way to demonstrate help build credit.

But even if you have excellent credit and you don’t need to borrow, a credit card could still work for you. Plenty of cards come with perks or rewards – from loyalty points or cashback through to airport lounge access or travel insurance.

There are credit cards to suit almost anybody, but you’ll need to be 18 or older and a Canadian resident in most cases, unless you meet the criteria for credit cards for foreign workers with work permits.

Credit cards are offered at the issuer’s discretion – in other words, when you apply for one, the card issuer will weigh up your application, and if it thinks you’re a safe bet, it’ll offer you a card. Card issuers normally state their minimum criteria (which could include a minimum income or being an existing customer) but meeting these criteria isn’t a guarantee of approval.

For really premium cards, you’re likely to need a decent income and a good track record of borrowing responsibly (a high credit score), but credit builder credit cards and student credit cards are much easier to get approved for. If you’re not sure what your credit score is and what’s in your credit report, you can find out free with Finder.

If your credit card application is approved, your specific circumstances will determine what credit limit (that’s the maximum debt you can build up on the card) the issuer will offer you. Your personalized limit will depend on factors like your credit score, and your income and outgoings.

Once you’ve held a credit card for a few months or years, you might want to raise a request to increase your credit limit. Any increase will be at the card issuer’s discretion, but if you’ve been using your card sensibly (making repayments on time) and your circumstances haven’t changed for the worse, there’s a reasonable chance your request will be approved. Some card issuers will even pro-actively suggest a credit limit increase after a while.