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Credit cards for temporary residents in Canada
Find out how you can get a credit card as a temporary resident or immigrant to Canada.
What is a temporary resident?
A temporary resident is a non-citizen or non-permanent resident of Canada who is legally authorized to enter the country for work, study or tourism purposes. Visits for temporary residents usually last up to six months or longer, and most temporary residents have a visa or residency permit that allows them to stay in Canada for a specified period of time.
4 ways for non-residents to get a credit card in Canada
There are a few options for Canadian credit cards for non-residents that you can look into if you’re immigrating to Canada or staying in the country for an extended period of time.
1. Sign up for a newcomer to Canada credit card for temporary residents
Many big banks and some smaller financial institutions may allow you to sign up for a newcomer credit card for temporary residents as part of a comprehensive “welcome to Canada” banking package. These credit cards are unsecured and can help you build your credit.
2. Purchase a prepaid credit card for non-residents in Canada
You need to load money onto a prepaid credit card for temporary residents before you use it. You can buy these cards from grocery stores or apply for them from your bank or a financial institution. Prepaid cards don’t come with interest and using them won’t affect your credit score.
Compare prepaid credit cards for temporary residents
3. Sign up for a secured credit card for temporary residents
Secured credit cards for temporary residents require you to put money down in advance as collateral to secure the money you borrow. This deposit can be used by your provider to pay off your balance if you default on your payments. You’ll pay interest on any money you borrow with a secured card and your credit score can go up or down depending on how often you make regular payments.
Examples: Refresh Financial Secured Card and the Capital One Secured Credit Card.
4. Compare secured credit cards for temporary residents
Use a Visa Debit or Debit Mastercard
If you need a credit card to shop online or pay bills, you may be able to get by with a Visa Debit or Debit Mastercard. These are debit cards that are affiliated with a credit card but only allow you to spend money out of your bank account.
Examples: Scene Scotiacard Visa Debit and the BMO Debit Mastercard
How to apply for credit cards for non-permanent residents in Canada
Using a credit card to build your credit score in Canada
Using a credit card for temporary residents in Canada can help you build your credit score as a new immigrant. This can make it easier for you to get approved for lower interest rates on future loans or mortgages. Building your Canadian credit history is important since banks will only look at this score – and not your credit score from back home – to determine your eligibility for financing in Canada.
This can be a good thing if you have bad credit at home because it means you get to start fresh. It can be a bad thing if you had good credit before coming to Canada since you’ll have to build your credit score all over again. If you have good credit at home, you may want to provide proof of this just in case your credit card issuer is able to factor this into their approval process.
6 Easy ways new Canadians can build credit fast
If you don’t have permanent ties to Canada, you’ll likely be seen by credit card issuers as a higher risk borrower. Before you apply for credit cards for temporary residents, make sure you consider the following:
- You may be asked to provide reference checks. For some applications, you’ll be asked to supply names and contact information for Canadian residents who can confirm the details you provide on your application. This could include the person from whom you rent your home, your employer or any other individual that you have financial obligations with.
- Your first Canadian card will likely have a low credit limit. As a temporary resident, you’ll likely be granted a much lower credit card limit than you would normally expect as a Canadian citizen. If you use the card regularly and make your repayments on time, you’ll be able to apply for a credit limit increase at a later date.
- Pay your bills on time. Your Canadian payment history with phone, Internet and electricity companies may also be reviewed to check for late payments or defaults. If you want to qualify for other credit products in Canada as a temporary resident, you should aim to have excellent credit while you’re here.
- You might not find out why your application was denied. You may not be notified as to why your application was rejected if you’re a temporary resident applying for a credit card.
Pros and cons of getting a card as a temporary resident
- Build your credit. If you plan to become a permanent resident of Canada, getting a credit card as a temporary resident will help you build your Canadian credit history.
- Flexible payments. Credit cards for temporary residents allow you to make purchases in local stores using credit, which you can then pay off as you please.
- Increased borrowing power. It may be easier to get approval for loans or a mortgage if you already have a credit card issued by a Canadian bank.
- Make bill payments. Getting a Canadian credit card for non-residents might make it easier for you to set up a mobile phone or utilities contract as you get settled.
- Limited availability. Not all financial institutions offer credit cards to temporary residents, and those that do will likely offer a limited number of products to you.
- Higher income requirements. You may need to meet higher income requirements since you don’t have a credit score to prove your creditworthiness.
- Credit history. Your credit score in Canada could go down if you apply for a credit card and you are declined (since they’ll typically do a hard check on your credit).
You have several options to get a credit card as a temporary resident in Canada. These include signing up for a newcomer to Canada banking program credit card or using your Visa Debit or Debit Mastercard instead of a credit card. You may also be eligible for a secured or prepaid credit card. Compare Canadian credit cards for non-residents to find the best fit for your unique set of needs and budget.
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