Credit card application checklist for Canada: what to check before you apply

Before you apply for a credit card in Canada, check that you meet the issuer's requirements, read the information box at the top of the application, know how the application will affect your credit file, and decide the credit limit you actually want. A declined application still leaves a hard inquiry on your credit report, and a limit higher than you need can make overspending easier. This checklist walks through the steps in order, with the documents you are likely to need and your rights under federal and Quebec law.

This guide belongs to the rewards card worked examples. The interactive version is the rewards card checklist.

Step 1: decide whether you need a new card

Ask yourself three questions:

1. Do I pay my current card in full every month? If not, a new rewards card will not help; a lower-rate card or a payoff plan will. See the minimum payment example.
2. Will the new card earn meaningfully more on my spending? Run the comparison in the rewards value calculator.
3. Am I planning a mortgage, car loan or line of credit in the next 6 to 12 months? If so, a new application may be better postponed.

Step 2: check eligibility before applying

Some issuers offer a pre-qualification check that uses a soft inquiry, which does not affect your score. It is not a guarantee of approval.

Step 3: read the information box

For banks, the Financial Consumer Protection Framework Regulations require the key terms to be set out in an information box at the beginning of the application. Write down:

• purchase interest rate
• cash advance and balance transfer rates
• grace period in days (at least 21 days to the minimum payment due date under the Bank Act)
• minimum payment formula
• annual fee and fees for additional cards
• foreign currency conversion method and fee
• other fees: cash advance, over-limit (if any), returned payment, card replacement

See disclosure rules for what each item means.

Step 4: read the rewards and insurance terms

• earn rates by category and any caps
• how points are redeemed and what each point is worth for the redemption you will use
• whether points expire or are forfeited when the account closes
• welcome bonus conditions; see welcome bonus math
• certificates of insurance for any coverage you are counting on, including exclusions and age limits

Step 5: prepare the information you will be asked for

• Full legal name, date of birth, address history (often two or more years)
• Employment status, employer and income; sometimes housing costs
• Social Insurance Number: issuers may ask for it, but it is generally optional for credit applications; the Office of the Privacy Commissioner of Canada says businesses must tell you that giving your SIN is optional when no law requires it, and that you cannot be refused a product or service for declining unless the SIN is legally required or no alternative identifier would work. A credit card application is not income reporting, so the issuer can usually identify you with other details; leaving it out may slow the process.
• Government-issued photo ID if applying in person or for identity verification

Apply only through the issuer's official website, app or branch. Never send card applications or ID through links in unexpected texts or emails; see fraud.

Step 6: consent and the credit limit

• A bank cannot open a credit card account for you without your express consent, and it cannot increase your limit later without your express consent (Bank Act, s. 627.32).
• Choose the limit you want, not the highest you can get. A lower limit reduces the damage from fraud and overspending, but a very low limit can push your utilization ratio up. A sensible middle is a limit that keeps your normal monthly spending well under half of it.
• In Quebec, under newer rules listed by the OPC, the application must state the limit you want and the merchant cannot grant a higher one; see Quebec's rules.

Step 7: after approval

• Activate the card and set up online access through the official app or site.
• Set an automatic payment of the full statement balance from your bank account.
• Turn on transaction alerts.
• Note the annual fee date in your calendar.
• Check your credit reports a few weeks later to confirm the account is reported correctly.

If you are declined

1. Ask the issuer which credit bureau it used and whether it can tell you the main reasons.
2. Get your free credit reports from Equifax Canada and TransUnion Canada and correct any errors with the bureau.
3. Wait before reapplying: several declined applications in a row add inquiries without improving your chances.
4. Consider a secured credit card, backed by a deposit, to build or rebuild history.

Frequently asked questions

How long does a hard inquiry stay on my credit report?

Inquiries generally remain visible on your report for several years, but their effect on the score is usually small and fades sooner. The bureaus explain their retention periods on their websites.

Can I apply for two cards on the same day?

You can, but each application usually creates a separate inquiry. Issuers may also see the other application.

Does a newcomer to Canada need a credit history?

Some issuers have newcomer programs; otherwise a secured card is a common first step.

Can I withdraw an application?

Contact the issuer. If the card has been issued and never used, you can cancel it; in Quebec, the OPC says you owe no membership or usage fees if the card was never used.

Sources

• Justice Laws Website — Bank Act s. 627.32; Financial Consumer Protection Framework Regulations ss. 59 and 62
• Financial Consumer Agency of Canada — applying for a credit card, credit reports
• Office of the Privacy Commissioner of Canada — protecting your Social Insurance Number
• Equifax Canada and TransUnion Canada — free credit reports
• Office de la protection du consommateur — applying for a credit card in Quebec