I’m always a little suspicious of articles starting with “the 5 things…”, but today I’ll spare you the “lolcat”, plus it’s so 2014. I arrived in Canada 7 years ago, on May 1st 2009. Like many of my French compatriots, I had to learn many things and banking is one of them.
Your bank and your credit card are two different things
When you open a bank account in France, the financial institution you deal with will provide you with products related to this account. The credit card (or blue card!) is one of them. It is rare to have a card that is not issued by your main bank if not for business reasons. Stores sometimes have payment cards, but these allow access to credit (called revolving). American Express is not very present, having only a partnership with Air France.
In Quebec and North America in general, this relationship is less strict. Credit cards from networks such as Visa or MasterCard are issued by banks such as TD, CIBC or Desjardins. Banks have credit card departments that are often separate from their other activities. You can have a TD Bank credit card and a Desjardins chequing account (current). When you go to apply for a credit card at a bank, it doesn’t matter if you don’t have an account at that bank, your credit score does. [highlight color=”green”]Therefore, you should not be “afraid” to subscribe to a credit card offer even if you are not a customer of the financial institution.[/highlight]
You have to pay your credit card
This is the first important tip. In France, since the credit card is linked to the current account, you don’t have to worry about paying it. There is a choice of immediate or due date debit, but the balance is settled automatically.
In Canada, given the first point, the lack of a strong relationship between your everyday bank and your credit cards, it is up to you to pay the balance on your credit cards. This is done by a simple transfer from account to account. Your credit card is an account like any other and you can transfer money to it within the same bank or between different banks. [highlight color=”green”]And paying your credit card(s) on time is very important.[/highlight]
The importance of the credit score
In France, when you open a bank account, you have to prove certain things in order to access the different products (checkbook, credit card, overdraft…). This is often done through an employment contract and a permanent contract is even better. Quebec has adopted the credit score system. We have already talked about it in other articles and the subject is too vast to talk about it here. To summarize, it is calculated by organizations independent of banks and can be consulted by your landlord in case of renting a house, your employer (after having given your agreement), your cell phone operator and of course your bank. [highlight color=”green”]The advice I can give you is to build it as soon as possible. Most banks will provide you with a credit card upon arrival if you secure a certain amount in an escrow account. Afterwards, pay for all your purchases with this card![/highlight] I arrived in May 2009 and in June of this year the iPhone 3GS was released. It was my first post-paid subscription in Canada and since I had a credit card as soon as I arrived I was able to get a subsidized cell phone without paying a deposit. The other trap to avoid is taking out an extra credit card for your spouse. The problem is that he will not benefit from your payments and therefore his credit score will remain minimal. [highlight color=”green”]Everyone must have their own credit card.[/highlight]
But it does not solve everything
The credit score is important, but it is not the ultimate goal. In the context of a mortgage (real estate credit) it is important because it is an indicator of good financial management. [highlight color=”green”]It is a summary that is used for credit card applications [/highlight] but it is not sufficient for the purchase of a property. The financial institution will go further and look at your file in more detail as well as your employment, your financial assets, your car credit, etc.
Conclusion: you have a lot to choose from!
But the big change you’ll experience [highlight color=”green”]is the choices available to you[/highlight]. And this is where milesopedia can help 🙂 There are plenty of different cards to choose from:
So of course one has to be careful and I hope I have shown that I am far from being an easy credit adventurer. It would be a shame to miss out on great travel opportunities by not being informed. Join our Facebook page and our Facebook group dedicated to travel to discover loyalty programs in Canada.
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