CREDIT CARDS
Meet Morgan
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Morgan needs your help. Follow him along on a financial journey, as he makes mistakes, fixes them, and learns his lesson.
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Click-through time: ~8 minutes.
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Test your knowledge with a quiz and our game: "Talk Like a Banker"!
"Morgan is turning 17 this year. His grandma decides he’s a grown boy and, much to the distaste of Morgan’s parents..."
What is it Used for?
Credit cards can pay for things without using cash or debit.
When you pay with credit, you're not spending your own money.
You're borrowing from the bank and will have to pay it back. This is a loan, but it's interest-free for a month.
If you don’t make the full payment when it's due, you will be charged interest for the entire month. This can get expensive because credit cards charge high interest rates.
Key Features Tip
For your first credit card, look for no monthly fee and rewards that suit you. Cashback is king.
If you get a second one as back up, evaluate other rewards plans that may suit your lifestyle. Assess if the fee is worth it.
Key Features
Monthly Fee
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You get what you pay for. Free cards have fewer features but get the job done.
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Premium cards have additional perks, like purchase insurance, additional reward points / higher cashback, and flight / travel points.
Credit Rewards
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Earn points or get cash back when you purchase items with your credit card.
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The bank tracks your spending and sends you a cashback refund once per year.
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Points can be redeemed for goods and services at participating retailers, like movie theaters, gas stations, restaurants, clothing stores, and airlines.
Card Tips
When you make payments on time, you build your credit history. It can help you secure a rental apartment, and get a car / house loan.
Credit cards come in handy for making hotel / car rental reservations.
Don't withdraw cash directly using a credit card from an ATM - you'll be charged interest immediately (no free month).
Research & Compare Tip
The 'Big 5’ and some online banks offer simple no-fee, cashback cards.
Many retailers, like Loblaws, The Bay, Walmart, or Canadian Tire offer these simple credit cards too.
Recently, new fintech (financial technology) companies started offering simple cashback cards - for example, Brim and Neo.
You can start your research into credit cards by checking aggregators like www.ratehub.ca and reviews done by the newspaper Globe & Mail.