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When you arrive to Canada with the aim to settle there, you need to take care of many problems: housing, job, educational institutions for yourself or your children, and even language courses, if your English needs improving. Your finances should also be on the agenda. As a new comer to Canada, you need to choose not only the right bank where to keep your money but also the right credit card that would give you maximum rewards and benefits.

Navigating among numerous credit cards available in Canada is not an easy feat, particularly if you come from a country where banks such as Scotia, MBNA or even Desjardins do not exist. Then how would you know, when you have just landed in Canada, what credit cards offer a low interest rate, fast cash back, or luxurious travel privileges? You can ask your financial advisor to help you choose the best option or you can rely on the list of the most popular credit cards for new immigrants recently compiled by specialists. But what can you do, if for some reason, banks look at your financial history with skepticism and refuse to offer you the cards appearing on this list?

Will that be cash or .a secured credit card

Navigating among numerous credit cards available in Canada is not an easy feat

When your creditors mistrust your financial prospects or when, as a newcomer, you have neither credit history nor a large sum of money to assuage their worries, you may apply for a secured credit card. The secured credit card will not only help you easily build your financial reputation but will also ensure your financial growth. This card can indeed improve your financial situation, because it works unlike other credit cards that encourage spending. Its main difference from other credit cards is that it requires you to have some collateral on your account. When you need a loan from a bank, it will take some tangible guarantee from you before giving you the money. Any valuable physical object can serve as such guarantee. This is why this type of card is called secured: its is backed by a secured payment.

To receive the secured credit card, you need to deposit a specific amount of money into your bank account that would work as collateral. The deposit ensures your bank that it will suffer no monetary loss. The required deposit typically starts at $200 and is usually equal or larger than the limit offered. Like other credit cards, the secured credit card can be used to make payments online and in-store. The most popular secured credit cards in Canada among which you can choose are People’s Trust Secured Credit Card, Home Trust Secured No Annual Fee Visa, Home Trust Secured Low Interest Visa, and Capital One Guaranteed Secured Master Card. An annual fee on these cards never goes higher than $70. Their interest rate ranges from 12.99 percent to 19.99 percent.

To obtain any of these secured credit cards, you need to fill in a standard credit card application. There is not much information you need to write on this application form, but it is more serious than it appears at the first blush. Far from just collecting your personal details, this application is, in effect, an assessment of your credit history and credit score. On it, a credit reporting agency will base its calculation of how much money you need to deposit to receive your secured credit card. You will need to answer other questions, too. When you apply for the secured credit card, you will be asked about your estimated monthly payments, your loans, and your mortgages. You will also need to provide some information about your salary, employer, and any other additional source of income. To qualify for the secured credit card, you need to be at least eighteen years old and have a valid Canadian address.

Note also that a credit reporting agency will not only assess your credit history when you apply for the secured credit card but will also carefully watch your transactions. If you succeed in keeping your balance low and will make all your payments on time, you will surely build reliable credit history that will later allow you to apply for any of the best credit cards popular in Canada. Indeed, making payments on time is of paramount importance, if you want to establish a reliable credit reputation in the new country. Even if you pay a couple of days later than you should, you may undermine your bank’s trust in your paying abilities, which will delay the appearance of your card on your credit file. Only if you make scheduled payments for a long period will you be able to build a good credit score in Canada.

When your credit score improves, your bank may decide that you no longer need to be secured. It will give you your deposit back and will issue you a regular credit card. If you want to close your secured credit card account, you may do this any time, too. Your deposit will be returned to you in full. There is thus no catch in using the secured credit card. With all the benefits it offers considered, it may be a good card to order when you are just starting your life in Canada.

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