The first time I applied for a Canadian credit card was thrilling. I had just returned to Canada after spending 20 years in Tehran, and I felt like I was claiming back part of my identity. I had made the move on my own in pursuit of a better future. I had landed a full-time job with a more-than-decent salary, and everything should’ve been smooth sailing from then on, right?

I was quickly humbled. 

Turns out there was a lot I didn’t know about financial management, including how to choose a credit card that would enable me to get my life set up. But the trouble didn’t become apparent until a year or two later, when the debt I had racked up sent my first-ever credit card to collections. Yikes. 

I had no idea about all the nuances involved in credit card fees and how interest rates work, let alone the consequences of accumulating too much debt.

The only consolation was that I discovered I’m not alone in feeling lost in this credit card maze. A growing number of Canadians are relying on credit to cover their essentials, and less than two-thirds pay their balance in full every month. 

Whether you’re a newcomer to Canada, looking for your first credit card, considering switching cards, or simply navigating seasonal spending, I know how overwhelming it can feel. There are literally hundreds of cards on the market – so how can you make a considered choice? Here’s everything I wish I had considered when choosing a credit card.

There are different kinds of credit cards for many different needs

Credit cards come in all shapes and sizes (okay, not literally), but there really is no one-size-fits-all here. Your choice could differ vastly from someone else’s depending on your financial situation, goals and preferences. 

That’s why getting a solid lay of the land before you jump into the first offer you find is so important. And that starts with understanding the different types of cards available. Full disclosure? I had no idea there was more than one type of credit card when I got my first one, so you’re already ahead of the game. 

The type of credit card you choose is going to depend on what stage you’re at financially, and what kind of card can best support you.

Types of credit cards

Low-interest rate credit cards: Low-interest rate credit cards may be a good choice for people who tend to carry a balance — especially when figuring finances out—as they can help reduce interest charges. Looking back now, this is exactly what I should have gotten initially. 

No annual-fee credit cards: One of the big lessons I learned was that most cards have annual fees. But not all of them do. A no-annual-fee credit card doesn’t charge you an annual fee each year for using the card (although interest charges and other fees may still apply) — and some come with a variety of perks and benefits. But keep in mind that no annual fee doesn’t always mean the best value, depending on which card you get.

Rewards credit cards: These credit cards – categorized into cashback, travel rewards, and general rewards – earn you cashback, points or miles with each purchase. They’re designed for financial efficiency, and are perfect for someone with a more disciplined approach to their financial goals. 

Secured credit cards: These credit cards are for people like me who, through insufficient information, no credit history or unfortunate circumstances, end up with a limited or poor credit history. To get a secured credit card, you must provide a security deposit, which serves as collateral and reduces the risk for the issuer. These credit cards can be a useful tool for rebuilding credit, and timely payments contribute to an improved credit history over time. 
Retailer credit cards: Retailer cards are specific to a certain store or family of stores, or to an online retailer. A retailer could issue their own credit card—which would only be valid at their stores—or they could partner with a major credit card like Visa or MasterCard, which can be used anywhere.

Other credit card factors to consider

Knowing the types of credit cards out there is a good place to start, but you’ll want to get more granular when choosing the best card for you. When picking my first credit card, I was oblivious to its high-interest rate and fees, which made me fall short of timely payments and led to a poor credit score. Watch out for these points to avoid unnecessary stress.

1. Interest rates: If you carry a balance month-to-month, paying attention to the annual interest rate (APR) is critical. Opting for credit cards with a low APR can keep a lid on those interest charges, which means fewer charges to pay and more money in your pocket. 
2. Rewards programs: If you’re a goal-oriented spender and want to earn rewards, you’ll need to consider cashback versus travel miles or points. Think about which rewards align with your spending habits and preferences. 
3. Fees and charges: Ah, my Achilles’ heel. Review your card’s fee structure — including foreign transactions, late payments and cash advance fees. Many credit cards come with an annual fee, too, so it’s key to determine whether the card’s benefits outweigh this cost. You can also look for credit cards that waive the annual fee for the first year. It’s also worth noting that many fees can be avoided by paying in full and on time, and not going over your credit limit.
4. Credit limit: This is another big one. As someone who hadn’t used credit cards before, I didn’t know how to assess the appropriate credit limit. A higher credit limit would’ve done me wonders because I was a pretty big spender and relied on my card for daily purchases. Of course, the credit limit you’re offered may depend on your credit history. And although a higher credit limit can be useful in case of emergencies, keep in mind that it does need to be paid back and should always be used responsibly. 
5. Additional benefits: Once you check off all the essential points of comparison, take a look at other perks, too. Some credit cards offer travel insurance, purchase protection and extended warranties. Some premium cards may also come with travel benefits, like airport lounge access.

Values-based credit cards to explore

With your values and goals top-of-mind, it’s time to play ball. Vancity’s enviro™ Visa* credit cards offer a range of options for various short-term and long-term goals, depending on what stage you’re at and what’s important to you. Here are some considerations:

You’re looking to build your credit – and your credit score

If you’re busy building solid ground (and a solid credit score) and need to carry a balance, Vancity’s enviro™ Visa* Classic card offers a low-interest rate, reward points, insurance coverage and no annual fees. By paying off low-interest credit card bills on time and in full, you prove that you’re a responsible borrower, which helps in building your credit score. Bonus points if you can pay your balance off in full or make more than the minimum payment. 

You’re slowly growing your finances 

After somewhat recovering from my early financial mishaps, I’ve reached the stage of wanting to earn points, but I am still relatively risk-averse. enviro Visa* Gold card is my choice for growing while maintaining a low barrier to entry. Plus, I’m able to get valuable Vancity Rewards points that can be redeemed for cash back, travel, charitable donations and—my favorite—gift cards.

You’re ambitiously building a life 

I already have my sights set for the next stage of life, where I build a business of my own and give back to communities and non-profits I care about. If you’re already there, enviro Visa* Infinite card lets you earn more points, get greater insurance coverage, and more. 

There’s also the enviro™ Visa Infinite Privilege* card, which offers the most reward points, premium (and I mean premium) benefits and insurance coverage, travel benefits, plus other perks like carshare driving credits, discounts on coffee and free meal kits. Yum.

Choosing the right credit card is an important part of securing your financial future 

In a nutshell, picking a credit card is about more than just acquiring spending power. Ignoring the fine print on interest rates and fees left me with a debt hangover, and I had to learn the hard way that credit cards are more than flashy perks. They’re truly a reflection of you and an investment in your future. 

If applying for my first Canadian credit card felt like reclaiming a piece of my identity, empowering myself through smarter financial choices has made me feel like I’ve built an entirely new identity: a financially savvy one.

Whether you’re a newbie in Canada or eyeing a card switch, get into the details like a detective—interest rates, fees, benefits, and all. When you understand the terms, it’s a lot easier to pick a card that doesn’t just fit today, but sets you up for a financially epic tomorrow. Learn more and find the card for you today.

_{enviro™, Carbon Counter™ and Vancity enviroFund™ are trademarks of Vancouver City Savings Credit Union.} 

_{* Trademark of Visa Int. Used under license.}