{"id":44180,"date":"2023-12-12T09:25:43","date_gmt":"2023-12-12T14:25:43","guid":{"rendered":"https:\/\/hardbacon.ca\/non-classifiee\/how-to-build-credit-for-beginners-introduction-to-credit-cards\/"},"modified":"2024-05-15T03:44:38","modified_gmt":"2024-05-15T07:44:38","slug":"how-to-build-credit-for-beginners-introduction-to-credit-cards","status":"publish","type":"post","link":"https:\/\/hardbacon.ca\/en\/credit-cards\/how-to-build-credit-for-beginners-introduction-to-credit-cards\/","title":{"rendered":"How to Build Credit with Credit Cards"},"content":{"rendered":"\n

The first rule of adulting is to care about your credit score<\/a> as much as you cared about passing your exams when you were younger. Only this test never ends, and it affects your entire life. High school taught you a lot of really valuable lessons. But has anyone taught you how to build credit? Or how to use a credit card<\/a>? Nowadays, you can\u2019t get a cell phone or rent an apartment without good credit. Even some jobs require you to have a good credit score<\/a>. <\/p>\n\n\n\n\n\n\n\n

When can you start to build a good credit score?<\/h2>\n\n\n\n\n\n\n\n

The best way to establish your credit score is to use credit. You can start fairly early in life, even if you’re not yet 18 years old. Fortunately, many banks and other companies offer credit cards specifically designed for those new to credit. Others offer cards that are easy to get for people with bad credit<\/a>. Here are a few ways to get started.<\/p>\n\n\n\n\n\n\n\n

Ask a parent to co-sign a joint credit card<\/h3>\n\n\n\n\n\n\n\n

If you are too young to open a credit card by yourself, ask one of your parents to co-sign on a joint credit card with you<\/a>. You will each be issued your own card linked to the same account. The activity will be reported to both your credit files and you will both be equally responsible for the monthly payments and outstanding balances.<\/p>\n\n\n\n\n\n\n\n

Open your own credit card<\/h3>\n\n\n\n\n\n\n\n

Depending on the province or territory you live in, you may be old enough to open a credit card without a co-signer. If you live in Alberta, Manitoba, Ontario, PEI, Quebec, or Saskatchewan you can open your own credit card when you turn 18. For all the other provinces and territories, you have to be 19. You will be the only one named on the account, and you alone are responsible for the payments and any balance owing.<\/p>\n\n\n\n\n\n\n\n

Start early with a KOHO prepaid card and learn how to manage your money<\/h3>\n\n\n\n\n\n\n\n\t\t
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Get it now<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\n\n\n\n\n\n\n\n

You don’t have to go hard right out of the gate. Consider taking it slow and playing it safe with a prepaid credit card before you jump into getting a real credit card. Unlike regular credit cards, a prepaid card<\/a> only allows you to spend the money that you’ve preloaded onto it. It\u2019s not a real credit card, so it won\u2019t help you build a credit score. But it\u2019s a great way to get used to going cashless and managing your money. <\/p>\n\n\n\n\n\n\n\n

Prepaid cards help to keep your spending in check so you learn how to budget your money while steering clear of debt. This early training can be your secret weapon to forming healthy financial habits that set you up for success when it’s time to build credit with a traditional credit card. <\/p>\n\n\n\n\n\n\n\n

The KOHO prepaid card is perfect for beginners just like you. If you open a KOHO account, you\u2019ll get almost free banking with crazy cash-back perks. How does it work? Once you open your Easy account for free, you\u2019ll get a KOHO Mastercard prepaid card<\/a> that you can use everywhere Mastercard is accepted. You load the card with funds from your own bank account, so you never owe money or pay interest. You can use your account like a guilt-free spending account. <\/p>\n\n\n\n\n\n\n\n

Apply for a free and easy to get credit card<\/h2>\n\n\n\n\n\n\n\n

There are many free and easy to get credit cards in Canada. With generous acceptance criteria, you have a better chance of finding one you’re happy with.<\/p>\n\n\n\n\n\n\n\n

If your score is so low you cannot get such a card, look for secured credit cards<\/a>. They are like training wheels for your credit score. But in order to get one, you need to give a certain amount of money to the credit card issuer to “secure” the card in case you stop making payments on it. Approval is usually guaranteed as long as you are a resident of Canada and legally old enough for a credit card, and your credit limit is equal to the amount of your security deposit. <\/p>\n\n\n\n\n\n\n\n

Neo Credit<\/h3>\n\n\n\n\n\n\n\n\t\t
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Get it now<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\n\n\n\n\n\n\n\n

We voted the Neo credit card<\/a> “best card for 2024”. Why? Because you can get 15% cash back on your first purchase at a Neo partner. The best way to get maximum discounts is to always consult the Neo application. There you’ll find offers from the various partners, so you can shop knowing where to go. On average, we’re talking about a 5% cash back, which is excellent compared to other credit cards with no annual fee. Note also that Neo accepts a wide range of credit scores, so as long as yours reaches 600, it shouldn’t prevent you from getting it.<\/p>\n\n\n\n\n\n\n\n

Some participating Neo partners include Netlifx, Amazon, Walmart, and more as well as small local businesses in your area. Furthermore, Neo ensures that if your average monthly cash back is less than 0.5%, they’ll step in to make up the difference. <\/p>\n\n\n\n\n\n\n\n

If your score is lower than 600, the Neo Secured Mastercard<\/a> is an excellent tool for building your credit history and it’s one of the best secured credit cards in Canada<\/a>. There is no credit check required, no annual fee, and the minimum security deposit is just $50! This card will also give you amazing cash back.<\/p>\n\n\n\n\n\n\n\n

BMO Cashback Mastercard<\/h3>\n\n\n\n\n\n\n\n\t\t
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Get the card<\/a>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\n\n\n\n\n\n\n\n

<\/a>Nothing is more versatile than cold hard cash. The BMO Cashback Mastercard<\/a> will put money back in your pocket. You can use your cash back rewards for books, groceries, and maybe even some school spirit wear. Or you can be a cash back master and use the rewards you earn to invest. The possibilities are endless. <\/p>\n\n\n\n\n\n\n\n

In addition to the welcome offer, you\u2019ll get 3% cash back on groceries, 1% on recurring bill payments, and 0.5% on all other spending categories. You can redeem your cash back starting at $1 and choose whether you want it deposited into your BMO account or as a credit on your credit card statement. <\/p>\n\n\n\n\n\n\n\n

What is credit?<\/h2>\n\n\n\n\n\n\n\n

To understand how to increase your credit score with a credit card, you need to understand credit. Credit is money that you borrow from a bank or other financial institution; they are also called creditors or lenders. Very few people have enough of their own money on hand to purchase a house, new car, or pay the full cost of their university program with spare cash. So they borrow money to help them pay for the expensive things. They take out mortgages<\/a>, student loans<\/a>, and personal loans<\/a>. <\/p>\n\n\n\n\n\n\n\n

Interest is the extra money you pay back to the lender on top of the original amount you borrowed. All loans charge interest. Lending is a business and it needs to be profitable so people continue to have access to credit when they need it. Think of interest as the price you pay to use someone else\u2019s money. Any money you owe to a creditor is called debt. What role does your credit score play in all this?<\/p>\n\n\n\n\n\n\n\n

What is a credit score?<\/h2>\n\n\n\n\n\n\n\n

Before any lender will give you money, they will check your credit score<\/a>. Your credit score is a 3-digit number on a scale of 300 to 900: 300 is the worst credit score, and 900 is the best. It\u2019s like a grade that evaluates how well you manage your debt; the money you owe to other people. Your score is determined by:<\/p>\n\n\n\n\n\n\n\n

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