Keep your antenna up when applying for a credit card

It seems like we’re always being approached with promotional offers for credit cards. Whether at sporting events, stores, on college or university campuses, or right in our mailboxes, credit cards are being offered, often with the promise of a free item, special discount or rewards points.

But before you fill out the application form, there are a few things you need to consider.

Third-party sellers. Banks often hire external companies to sell their credit cards and other financial products and services. These third-party sellers can be insistent. Don’t let yourself be pressured into purchasing a credit card you don’t need. You control your purchases.

Interest rates and fees. Do your research when choosing a credit card. Are you looking for the lowest available interest rate? Rewards points? Other benefits such as travel or car rental insurance? Consider what best suits your needs. For example, you may pay a higher interest rate or higher fees for a card that earns you rewards points. To help with your research, check out the Financial Consumer Agency of Canada’s online credit card selector tool.

Optional “add-ons.” You may be offered add-on products or services such as balance protection insurance. For a monthly fee, this type of insurance covers all or part of your credit card balance if you become ill, lose your job or die. The salesperson needs your express consent to provide you with balance protection insurance. But this coverage is not appropriate for everyone. For instance, if you are a student working part time, you may not be eligible in the event of job loss.

Ultimately, you should never feel pressured to make a decision on the spot. Read all of the documentation that is given to you. If you don’t understand something, ask for clarification. It pays to know before you owe.