It can be difficult to get an additional credit line when your credit score is low however, it is possible to get it completed. It’s true that it is essential to do so in order to improve the credit rating. A high score is crucial when you plan to get financing for an investment property or a new vehicle.
In this article, we will discuss the different kinds of credit that are available to people who have bad credit in Canada and discuss a few of the specific products you can apply to. There are several kinds of credit cards that are available to people with poor credit.
Secured Credit Cards
Secured card are relatively simple to acquire since you’re required to pay a down payment to reduce risk for your financial institution. It is still possible to pay your monthly bill, however the amount you prepaid is kept in case of default. Only after you close the account will you receive the down payment.
The amount that can be secured on a card could vary from $200 to $5,000. The amount of down payment can vary, too. Secured cards typically have an annual cost of between $10 and $30.
Low Interest Credit Cards
Credit cards with low interest rates are secured by major banks as well as credit unions and online lenders. They have low interest rates, but low credit lines ranging from $500 to $1,000. This is a great option for those trying to build credit by only charging what they can pay in full each month.
If you follow this method it is not necessary to have any huge credit lines. However, before you pick a low-interest credit card make sure you inquire whether your payments are reported to Credit Monitoring Bureaus TransUnion and Equifax regularly. If not, you’ll not necessarily be building credit.
Store Credit Cards
Credit cards that are tied to a specific retailer can be a great way to build credit and gain some benefits along the way. If the location is one that you frequently visit and you are able to take advantage of discounts or sales as well as coupons from the store , which aren’t accessible to all.
It is possible that stores offer an interest-free time frame during which to pay off your balance without any additional charges. If you don’t pay off the balance by the time frame, the stores typically charge higher than the average interest rate on the amount owed.
Cards for prepayment
If you’re having trouble using other cards but require one to purchase items online or pay for certain expenses There are prepaid cards that are available. They function similar to debit cards and use funds that you’ve pre-loaded before you make purchases. There is no monthly bill to be paid.
You can typically reload a credit card in a store or using the funds transferred from a different account. As long that you have a bank account as well as a debit card, there’s no need to utilize an pre-paid card. There could be charges that are associated with it, and it’s not a way to build credit.
The transactions made using a prepaid card don’t report to the most prominent credit monitoring agencies.
Credit Card Products to Try
These cards are great choices for those with poor credit.
No-Fee Scotiabank Value(r) Visa Card
The Bank of Nova Scotia comes the Zero-Fee Scotiabank Value Visa offering a fantastic beginning cost of 3.99 percent. This is applicable to balance transfers that allow you to transfer balances from a card that has greater interest rates and reduce your debt faster.
Other advantages that come with other benefits of the No-Fee Scotiabank Value Visa Card include protection for your card and itemized transactions, as well as discounts on car rentals, and other cards that can be used as supplementary. The annual fee is non-existent and the credit limit is greater than $500.
The interest rate increases dramatically to 16.99 percent after the initial period ends.
Refresh Financial Secured Visa Credit Card
The secured credit card offered by Refresh Financial is fairly new and is specifically designed to those who have low or zero credit. There is no credit verification needed to get the card. There is however an annual charge of $12.95.
Credit limits are determined by the income of the borrower and range from $200 all the way to 10,000. The amount of deposits you must make will depend on the credit limit you have. The rate of interest is 17.99 percent.
Refresh has a few attractive features on this card. One of them is that you earn a $100 referral bonus for each person you refer to the company that eventually sign to sign up to the card.
BMO(r) Preferred Rate MasterCard(r)
This BMO Preference Rate MasterCard is available to people who have bad credit, but not for those who have bankruptcy within the last seven years. To be eligible, you’ll need to supply income and employment details.
There’s an 17.5 percent interest rate, but there is also a 21-day interest-free time. Certain people could qualify for a special deal of 11.9 percent interest depending on their credit score and income.
The additional benefits that are offered through BMO Mastercard include additional benefits. BMO MasterCard include benefits for travel such as roadside assistance, purchase security and trip cancellation protection.
TD Emerald Visa Card
It is the TD Emerald Visa Card is an excellent choice for families that want to share the credit card account. It is possible to connect up to four cards. Interest rates are fantastic and is an incredibly low 12.75 percent. The annual cost is just $25.
Additionally, you’ll receive trip interruption insurance and trip cancellation insurance as well as car rental discount. With the lower permanent rates of interest this can be an excellent option to consolidate debt.
RBC Visa Classic Low Rate
It is the RBC Visa Classic Low Rate is a different credit card that will aid in paying off the debt quicker because it comes with a low 11.99 percent interest rate, and an annual cost of only $20. This card comes with free travel checks as well as optional insurance for travel.
Additional cards are also available at no cost, making it an ideal card to share with your family. You’ll be pleased with the auto-payment feature, which allows you to schedule regular payments. That means you’ll never be behind and you’ll get steady progress towards improving your credit score.
A Word of Caution
Don’t begin the credit reconstruction procedure if you’re unsure and are likely to fail to make payments due to the new card. This will only bring your credit further down. Make a commitment to pay for any other expenses in cash until you’ve paid off the old debt and have a small amount of cash to put aside.