Photo by Andrea Piacquadio from Pexels
There are many great reasons to carry a credit card. Beyond the convenience and purchase protection included in credit card purchases, they’re also important financial tools for establishing your credit history and borrowing money—both of which you’ll need if you want to make a major purchase, get a loan or take out a mortgage. “The longer you have a credit account open and in use, the better it is for your score. Your credit score may be lower if you have credit accounts that are relatively new,” reports the Financial Consumer Agency of Canada (FCAC). Applying for a credit card is a financial commitment to be taken seriously, but the process is considerably simpler than applying for a mortgage or a personal loan. If you want to know how to apply for a credit card, and how to find the right card for you, you’ve come to the right place.
What do you need to apply for a credit card?
Basic application information
Whether you apply online or in person, you’ll need to have the following on hand:
- Full legal name
- Date of birth
- Email address
- Canadian home address
In some cases, you might also have to supply data about how long you’ve lived there, plus past addresses.
- Current employment status
This could be as simple as reporting your job title, but it might also include contact information for your employer.
- Gross annual income
This is the amount of money you earn annually, before taxes and deductions. If you aren’t salaried, you can estimate your income—you aren’t required to show proof. That said, do not make up a number. Lying about your income is a violation of credit card terms.
- Social Insurance Number
While usually optional, you might be asked to provide your social insurance number.
- Your residency status
If you want to apply for a credit card, you’ll generally need to be a Canadian resident or citizen. There are some workarounds for newly-landed immigrants that might require extra information or a separate application process. Also, some banks offer financial services aimed specifically at new Canadians. Take a look at Scotiabank’s StartRight Program and the BMO NewStart Program. (Check out the MoneySense Financial Guide for those new to Canada.)
At what age can you apply for a credit card?
You will need to be the age of majority to apply for a credit card. Your age of majority depends on the province you live in, and will be either 18 or 19 years old in Canada.
Does applying for a credit card affect my credit score?
In a word, yes—but it goes both ways.
When you apply for a credit card you’ll go through what’s called a hard credit inquiry, which results in a small dip in your score. The reasoning behind this is that if you are applying for credit it shows that you have some measure of financial need. The impact of an application on your score, however, is insubstantial, temporary and will resolve itself within a few months.
Multiple applications over a short period of time have more of a negative effect, so avoid that by researching which card you want before you start applying. “If there are too many credit checks in your credit report, lenders may think that you’re: Urgently seeking credit [and] trying to live beyond your means,” reports the FCAC.
On the other hand, using a credit card responsibly will affect your credit score positively, and is one of the best ways to build a strong rating.