Growing up in a Nigerian family, I was constantly reminded to always uphold the family name. This included not been referred as a debtor when walking down the streets. This warning followed me all the way even as a resident in a new country, thousand of miles away from Nigeria. Every mail in the post telling me to sign up for credit cards always went straight in the bin.
Fast forward to a few years down the line, I have learnt the error of my ways. While the use of credit card can be termed as spending borrowed money, it can be put to good use if managed responsibly.
The use of a Canadian credit card is a great way to start building your credit history. Having a good credit rating puts you at an advantage in all sort of ways. When applying for a loan or mortgage to buy a home, you are likely to get a wide range of borrowing options with a good credit history. Interest rates could also be lower compared to when you have no credit history.
Smart ways to avoid pitfalls when using a Canadian Credit Card
1. Pay back your credit card balance on time, ALL THE TIME. This helps to build your credit rating and assures lenders of your credibility when the need to borrow arises.
2. Spend what you can afford. Keep purchases within budget so your balance can be paid off every month.
3. Always pay back in full. This helps you to avoid paying interest rate on money borrowed.