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Frequently asked questions about credit cards
How to get a credit card fast?
The process of applying for and being approved for a credit card can be a lengthy one, but fortunately, there are instant approval credit cards available. All major Canadian banks and many credit card companies offer instant approval credit cards. When you apply, you will be asked to verify that you meet certain eligibility criteria (age, income, status in Canada and credit score) and to submit certain documents. Once done, you will receive a response within 60 seconds, and will know if your application is accepted, declined or if the issuing company requires more information. You are more likely to be approved if you have a good credit score. Instant approval cards are generally low-cost cards with few restrictions. Be aware that even if you are approved immediately, you will still have to wait to receive your card in the mail, which may take one to two weeks.
How do credit cards work?
Credit cards give you instant access to a loan. Every time you make a purchase with your credit card, you are borrowing money. Your credit card comes with a credit limit; the maximum amount of money you can access. When you use your credit card to make a purchase, it reduces the amount of credit you are entitled to. The balance you owe on your credit card earns interest and you are required to make a minimum payment each month to keep your account in good standing. Your credit card company sends you a monthly statement detailing the amount of credit used, the amount remaining, your transaction history and the minimum amount due.
Why is it important to pay off my credit card balance in full each month?
If you pay off your credit card balance in full every month, you pay no interest on your current month's purchases. However, if you make only partial payments, you will have to pay interest on the entire amount on your credit card balance. If you think you'll have trouble paying off your card balance each month, consider a debit card with a chequing account.
How do I calculate interest on a credit card?
To calculate the amount of interest to be paid each month on your balance, you must convert your annual interest rate into a monthly rate. To do this, divide your annual rate by 12, since there are 12 months in a year. For example, if you have a credit card balance of $1,000 (and your annual interest rate is 19.99%), you would do the following calculation: 19.99% / 12 = 1.7 2. 1.7 / 100 = 0.017 3. $1,000 x 0.017 = $17 A credit card with a balance of $1,000 will cost you about $17 in interest per month. That said, the interest on a credit card is calculated each day based on your average daily balance. So if you carry a credit card balance, your monthly payments will be slightly more than $17, depending on how much you spend in the current month. To calculate your payments without breaking your brain, use our credit card payment calculator.
What is the CVV?
CVV is an acronym that stands for "Card Verification Value". It is a three to four digit code on the back of your credit card, usually located next to the signature space. It acts as a security code to protect your card from fraud. Never confuse your CVV with your Personal Identification Number (PIN). These two codes are different. When you make a purchase in a store at a payment terminal, you will often be asked for your PIN. In contrast, the CVV is used for online purchases. It protects you from fraud by confirming that your credit card is legitimate, belongs to you and is in your possession.
How to dispute a transaction on your credit card?
To dispute a transaction, contact the merchant first. Most of the time, human error occurs and can be easily corrected. If these are transactions that you did not make, and you cannot resolve the problem with the merchant, contact your credit card company. Be sure to provide as much detail as possible, such as the nature of the transaction, location, seller's name, date, invoice, tracking numbers, etc. Your credit card company will walk you through the process, but be prepared to fill out a lot of forms. Most companies impose a time limit for disputing transactions ranging from 30 to 60 days from the date of the transaction. So review your statement carefully each month and act quickly when you find an error. If you are dissatisfied with the way your credit card company has handled your complaint, you can take your case to an external complaint handling organization (ECO) such as the Office of the Ombudsman for Banking Services (OBBS) or the Ombudsman for Investment Banking Services (OBIS).
What is the difference between a reloadable credit card and a prepaid credit card?
The two terms essentially mean the same thing: a card to which you add funds and which can be used like a credit card. However, some prepaid credit cards are not reloadable and therefore only give access to the money on the card. This is the case with prepaid cards that can be purchased in stores and have fixed amounts on them. Some reloadable credit cards also offer an option to build credit for an additional fee, but not all cards do.
What is a no-credit check credit card?
When you apply for a credit card, the issuing company usually does a credit check. If your credit rating is poor, your application may be denied. Fortunately, there are credit cards that are available without a credit check. For example, there are secured credit cards which work by requiring a security deposit, usually equivalent to your credit limit. Some of these cards are guaranteed approval, which means that no matter how bad your credit report is, your application will be approved. No-credit check credit cards are a good option for rebuilding your credit history. You can also look into prepaid cards, which work like debit cards but with some of the benefits of credit cards, such as rebate programs. However, they do not, with some exceptions, allow you to rebuild your credit.
What is the difference between a secured credit card and a prepaid card?
A secured credit card is a card that requires you to make a security deposit. The amount of the deposit is usually between one and two times the desired credit limit. For example, to obtain a $1,000 credit limit, you will need to deposit between $1,000 and $2,000. If you cannot pay your balance, the lender will keep part or all of the deposit. Other than the deposit, a secured credit card works like a regular credit card. In contrast, a prepaid credit card does not require a security deposit. You deposit the funds you want and only have access to them. It works like a debit card, but you can access certain benefits usually reserved for credit cards, such as online payments and rewards programs. With some exceptions, it does not affect your credit rating.
What is the difference between a pre-approved credit card and a prepaid credit card?
A pre-approved credit card is an offer to join a credit card that is sent to you by an issuing company by mail or online. The company sent you this offer because your profile, which they obtained from a credit bureau, matched the card in question. Receiving such an offer does not guarantee that you will be approved for the card: you will still have to apply and may be declined. These offers often come with exclusive promotions, such as low or no interest rates for limited periods. It is always important to read the terms and conditions to make sure the card is suitable. On the other hand, a prepaid credit card is a card that requires you to deposit funds to use it. It works like a debit card, but with some of the advantages of a credit card, such as online payment. Using it does not affect your credit score.
How can I lower my credit card limit?
To lower your credit card limit, you must contact your credit card company. Many institutions offer the option of requesting a lower credit limit online, but you can also call your lender to make your request. There are many reasons why you might want a lower credit limit, but consider the potential impact on your credit score. Lowering your limit can increase your credit utilization ratio, which can have a negative impact on your score.
What credit cards are accepted at Costco?
Costco warehouses only accept Mastercard credit cards. However, you can use a Visa card to make purchases on the Costco website, including purchasing a Costco Purchase Card, which allows you to make in-store purchases.
How do I increase my credit card limit?
If you want to increase your credit card limit, you can contact your credit card company. Many institutions allow you to apply online, but you can also contact your lender by phone. You may have already received an offer of a credit limit increase from your institution, which means that they consider you eligible for an increase. You can accept this offer in the same way, however, take the time to decide if this is a good choice for you. Ask yourself if you really need the new limit and, more importantly, if you will be able to pay your balance off every month.
Is there a better card than CIBC Costco Mastercard?
It depends. If you use your credit card primarily at Costco, the CIBC Costco Mastercard is still the best, as it is the only one that specifically offers rewards on your Costco purchases. If you also use your card for other expenses, there are several cards that may be better suited to your needs. For example, if a large portion of your budget is spent on groceries, you may want to look into cash back credit cards or rewards points on your grocery purchases. To help you in your search, you can use our credit card comparison tool and filter the results according to your preferences.
Which card gives the most points?
There is no exact answer since each card offers a different percentage of points for different categories of purchases. Your spending habits will determine which credit card will give you the most points. For example, if you regularly fill up with gas, you'll gravitate towards a card that gives you a lot of points for dollars spent at the gas station. It's also worth noting that cards with higher annual fees tend to have more generous reward programs. You can use our credit card compararison tool and select the "Rewards" filter to find the best card for you.
I'm 75 years old, I pay everything with the credit card, and I pay it back in full at the end of the month. I spend more or less $2,000 per month. Which credit card do you recommend?
The best credit card for you will depend on your shopping habits. Since you pay off your balance every month, low-interest or balance transfer cards aren't really for you. Instead, you should look for cards that give you points or cash back to make your money go further. The key to choosing the best card is to determine how you spend your $2,000 a month. For example, if one-third of your spending goes toward your groceries, some cards offer great cash back rates on grocery purchases. By using our credit card comparison tool, you can break down your monthly spending into categories and see what rewards rate each card offers.
I spend about $25,000 a year on my credit card and my expenses are mostly split between gas, groceries and shopping. What would be the best credit card for me?
There is not necessarily a "best card" for you: there are several options depending on your spending habits. One option might be a credit card that offers a percentage of cash back or points (a lot of the best cards offer points instead of cash back) on all your gas and grocery purchases, which would allow you to get more value out of your purchases. Credit cards such as those offered by Canadian Tire and PC Financial are particularly attractive if you always fill up at the same location. To find the one that's right for you, you can use our credit card comparison tool. Here you can enter your monthly expenses for gas, groceries and more and filter the results according to your preferences.