Why is credit and managing credit cards important in Canada?
Credit cards such as Visa, MasterCard and American Express are a way to postpone payment for items you purchase. Each month you will receive a statement listing all the purchases you made during the last month. Credit cards must be used wisely. If you do not pay the total balance of your bill each month, you will be charged a much higher interest rate than if you got a loan from a bank.
If you use it well, a credit card is a good way to establish a good credit rating. A good credit rating is usually needed for large purchases such as a car or a house, where you require a loan or a mortgage.
Most financial institutions can offer a credit card for newcomers to Canada. These can often be linked to foreign accounts.
Major stores also may offer their own credit cards. If you have many credit cards, it’s important to keep track of the amount owing on each card. If you are not paying the balance of each card each month, it is easy to get into debt trouble quickly.
The Canadian Centre for Financial Literacy (CCFL) offers worksheets on money matters including Credit and Credit reporting in 8 languages. See Modules 6 & 7: CCFL Worksheets