I want to get a credit card
Applying for a credit card on campus... is it a good idea?
Although it may be very tempting to accept the credit card offers extended to students on campus (it's convenient, after all!), here are four good reasons not to accept the first offer that comes along.
1- You have not shopped around to find the best credit card
Did you know? Credit cards are not all the same and do not offer the same advantages, terms or interest rates. If you accept a credit card offer on campus, you are not giving yourself a chance to select the best card to suit your needs, your ability to pay and your lifestyle.
Solution: Take the time to find out the features of several credit cards before you make your choice. You can also use the Credit Card Selector Tool from the Financial Consumer Agency of Canada.
2- You haven't drawn up your budget yet
With a credit card in your pocket, it is very tempting to buy that new laptop or treat yourself at a restaurant right away. The bill will not come until the beginning of the following month... But will your budget (your income minus your current expenses) or your savings be enough to enable you to pay the bill, or make the payments asked for?
Solution: At least go through the exercise of drawing up a typical budget for one month. See whether there is any room in that budget to pay for the extra purchases you would make with a credit card. Use a calculator to figure out how much a purchase would really cost you, once you paid the interest charges.
3- You already have one or more credit cards with outstanding balances
Best avoid getting yourself further into debt! It would be better to adopt a strategy for paying off your debts as quickly as possible.
Solution: There are many organizations that can help you straighten things out. Consult the financial aid office of your educational institution, the Carrefour jeunesse emploi of your region, an association coopérative d'économie familiale (ACEF) or a budget counseling organization.
4- You don't know whether your credit record is good
Your credit record is like a financial report card. Your behavior over the past seven years, on average, is recorded there. Have you ever made late payments? Applied for several credit cards? Left bills unpaid? Your credit card application could be rejected, and that information too would be entered in your credit history.
Solution: Ask to see your credit record, it's free! It's a good habit to adopt every two years to check your credit status, see whether there are any errors or whether someone has attempted to steal your identity. Next step: take control of the situation. Ask for assistance from one of the organizations mentioned in paragraph 3 to put some order into your finances.