The average Canadian has an average of 3 credit cards. I on the other hand have only one. I used to be part of that average too. At one point I had 4 credit-card, only to realize I couldn’t manage the payments and debt I incurred on them a while later. Soon after, I paid off my three other credit cards and ended up with only one. One thing I realized is that one credit card is all I actually need. I’m not into any of these fancy rewards, cash backs and fancy features credit-card companies offer. I just need one. Even though I am paying off the debt on my single credit-card and I plan soon to have it paid off. Even after a balance of $0, I will not apply for another credit card. I have no need for it.
My current credit card is Visa Classic Low Rate from RBC. It has an annual fee of $20, which get’s waived automatically because I have over 3 products with RBC. It’s interest rate is 11.9%, which is not the grand daddy of low interest credit cards, but it’s certainly better than the typical 19.9% interest rates the average credit-card charges. In terms of rewards, it has none. It only comes with Extended Warranty, Purchase Security and Zero Liability options that come with it. In the end, I’m happy with my $20,000 credit limit, no rewards, mid-level interest rate and most importantly that I will be credit-card debt free. Hopefully next month.
Here’s what my card looks like:
Your Credit-Card & Your Credit Score
Your credit score is largely affected from your credit-card(s). There are many different variations to how your credit-score is drawn from your credit-cards. Ask your self; Do I pay my credit-card on time? Do I always carry a balance? Am I maxed out on my credit-card? All of these, in some way add up to a score, which is passed on every month to credit score agencies such as Equifax and Transunion. Here is how it all breaks down roughly:
40% of your credit score is determined on if you pay on time. How much you pay on time. Are you late? and how much you pay. Is it minimum balance or fully pay off your balance.
40% of your credit score is determined how much credit you use, relative to credit available to you. Are you fully maxed out? or use only a part of the credit available to you? It is said to best have 50% or more credit available at any given time.
20% of your credit score is affected by your credit history. The longer you have been with that given credit-card, the better standing you are in. Remember, when they said, it’s not wise to close off your credit-cards, even if you don’t use them. This is why. Unfortunately I closed my other three, but within good reasons. Probably to save my self from pure failure in the future.
I came across a pretty interesting site called Insureye. If you never knew what options come with your credit-card(s), here is a good place to discover what comes with your credit-card(s). If you are thinking of getting a new credit-card, you can find one tailored towards your needs. We all have different needs, some of us like cash back, while others who travel/fly a lot like reward miles.
Simply click on Credit Card Navigator and it will lead you to start your search. You don’t have to type in any personal information, it’s completely safe and totally informative. This is where I discovered that my Visa Low Interest Credit Card comes only with – Extended Warranty, Purchase Security and Zero Liability.
This is where I also learned, not all credit-cards offer car rental insurance. I’m sure you’ve read somewhere or heard through friends to not purchase car insurance if you ever rent a car. It’s a waste of money, because your credit card covers you. Wrong!!!! Not all credit-cards offer fancy rewards such as car rental insurance. Mine does not and I’m totally fine with it.