Top 10 Ways to Use a Credit Card in Canada
Credit cards are one of the most essential things for your financial stability. It helps you make easy pay, purchase on daily goods and services. It allows you not only the hassle-free purchase of anything but also acts as financial verification or score check.
Therefore always be careful with your credit card. Nowadays many people are having a question that how can they use their credit card in such a way that it will reward them back? Well if you have this same question in your mind then don’t worry! Because today we will tell you about top 10 best ways to use credit cards in Canada.
Here’s a list of Top 10 Best Ways To Use Your Credit Card In Canada:
1. Pay off your balance completely
The most important rule when using credit cards is paying off your balance entirely every month. By doing so, not only will it prevent any interest charges from piling up but also keep low credit utilization ratio which lenders prefer should be under 30%. Credit utilization ratio is how much of your available credit limit has been used; therefore keeping this low is vital for maintaining good scores.
2. Make use of rewards
In Canada, many credit cards offer rewards programs where one can earn cash backs, travel points and other benefits too. Look out for those credits which give rewards based on what you spend most money on and ensure that all purchases made daily are paid with these credits so as to get maximum returns possible. For example, if driving long distances often choose gas reward offering card since some rewards programs provide over five percent cashback per purchase.
3.Use it for large purchases
Credit cards usually come with extra purchase protection, extended warranty and insurance coverage against loss or damage for higher-priced items.This means that by using the same for big-ticket products one can take advantage of these added safeties which may not otherwise be offered elsewhere; such as some policies give rental car coverage for up to 31 days.
4. Do not do cash advances
This is because cash advances on credit cards always attract high interest rates and extra fees making them an expensive way of getting cash. Instead, use your debit card or withdraw money from your bank account when you need it. If you fail to make payments on the cash advance then interest will start accumulating which may lead to more financial troubles later on; while some issuers allocate payments towards lowest rate balances first thereby keeping cash advance balance longer on the card.
5.Watch out your statements
It is very important that one should regularly check his/her credit card statements so as to identify any unauthorized charges or errors. By monitoring transactions made through this means he/she is able to report quickly on any problem thus safeguarding against frauds. Sign up for online banking and auto payment notification which can alert you of activities on your account hence helping you detect fraudulent activity earlier.
6. Use automatic payment
Your credit score will be affected by late payments and they may also lead to hefty fines too. You can avoid missing any payment by setting up an auto-pay for the minimum due amount on your credit card. This will help you skip penalties for late payments as well as keep a positive credit history. Late payments will negatively impact your credit score for seven years making it difficult to get credit in future. To avoid interest and maintain good credit always pay off all balances on your credit card if possible.
7. Grasp fees and charges of your cards
Annual fees, balance transfer fees foreign transaction fee are among the charges that come with owning a credit card so know them well enough before applying for one. Being conversant with these charges can help make informed decisions and prevent being caught off guard when you receive your monthly statement. Understand which ongoing fees there exist per each of your credit cards in order to determine whether or not you feel comfortable paying that amount annually.
8. Keep low utilization rate
As mentioned earlier, utilization rate refers to the percentage of total available revolving credits one has borrowed at any given time; strive to keep this figure below 30% as it is considered healthy for maintaining good scores with lenders like banks etcetera . If the balance starts getting too close towards maximum limit then consider making more than just single payment during month so that things don’t go out hand since having debt which exceeds thirty percent ratio limits could imply difficulty settling bills.
Credit Cards that Help Fix Credit in Canada
9.Take advantage of what rewards programs offer
Most credit cards offer additional benefits such as access into airport lounges, travel insurances or even better still concierge service amongst others hence enjoy while making purchases or travelling widely thereby enriching your overall experience about life itself. Ensure that you exploit fully all these aspects made possible by your current plastic money provider because some banks might give certain value adds like discounts at specific online platforms or even concerts plus other members only events.
10. Always be aware of changes in credit card terms and conditions
It is important to know that Credit card companies can change their terms anytime. In case anything changes about fees, interest rates or rewards program ensure you are well informed by keeping track of your provider’s updates through emails, SMS etcetera. If need be go for another type of plastic that suits your needs better but remember always know what each agreement entails before signing up.
Conclusion
The top 10 best ways to use credit cards in Canada offers convenience, protection against fraud as well as privileges associated with them but one should not forget debt can ruin lives so spend responsibly.
