Benefits, fees, hidden perks: Choosing the right credit card for your lifestyle.

Original article by:

Nina Dragicevic

MONEYSENSE (THE CANADIAN PRESS)

March 5, 2024

📰 Read the FULL ARTICLE here.

I spoke with The Canadian Press about how to choose the right credit card for your lifestyle, and the fees and perks most people overlook. Here are the highlights and my contributions.

Key Takeaways

• Credit cards are one of the main ways to build a credit history, so even debt-averse people shouldn't skip them.

• Choose a card based on where you spend the most and which rewards you'll actually use, and use online comparison lists to weigh your options.

• Watch for late and over-limit penalties, and for foreign transaction fees, which many travel cards still charge.

• Optional add-ons like balance protection insurance can be costly and hard to claim.

• Many cards include built-in purchase and travel insurance that cardholders often forget to use.

My Perspective

I once worked with a client in their 30s who was ready to buy a home, only to discover they had no credit score at all because they'd never had a credit card. They assumed avoiding debt was helping them, but lenders need to see a track record.

"They thought they were doing themselves a favour."

For younger cardholders who pay their balance in full, a low interest rate usually matters less than rewards like travel points or cash back, and no-fee cards are a great place to start. If you do carry a balance, a balance transfer offer can give you a break from interest while you pay it down. And it's always worth calling your provider to ask for a lower rate or a waived annual fee.

"I think a lot of consumers don't realize that if you just call and ask … in a lot of cases, they will."

Most card fees are disclosed up front, so read the fine print. I usually suggest skipping add-ons like balance protection insurance, which people often buy without understanding it and rarely claim. On the other hand, the purchase and travel insurance that many cards include is under-used. If a rental car company pushes extra coverage or a new laptop breaks, check whether your card already covers it.

Originally published by The Canadian Press in MoneySense, written by Nina Dragicevic, on March 5, 2024. Use the link at the top of this post to read the full article.