Bank account for new comer with no fees/minimum balance?

[ozlis]

I've had awful RBC service - swapped banks ASAP.

 

[alee667]

I've had awful RBC service - swapped banks ASAP.

Which is the recommended bank in that case?

 

[wyho007]

Which is the recommended bank in that case?

I don't have good experience with HSBC.

 

[fahad04]

Tangerine is the best option as a free banking service. From the above posts, some user claimed they don't issue CC easily to newcomers without a responsive banking history or a credit history. But I guess, they would waive these requirements for a newcomer. Please, follow this link:

https://www.tangerine.ca/forwardthinking/borrowing/your-credit-score-and-you

Thanks

 

[arunsgirl]

Which bank are you planning to switch to?

BMO or RBC

 

[mawcanada]

So I have a question, for building a good credit history does this mean paying your credit card in full every month or maybe paying half of it every month and delaying the other half the next month. So is about just making regular payments or paying it in full?

 

[APPNOV2014NY]

So I have a question, for building a good credit history does this mean paying your credit card in full every month or maybe paying half of it every month and delaying the other half the next month. So is about just making regular payments or paying it in full?

Paying your credit card in FULL will lower your score as Card will be shown as not being used.
Keeping higher balances on Credit Card will also lower your score.

Google "credit score utilization ratio"

 

[pie_vancouver]

If you don't pay it full then it will accrue interest.

 

[APPNOV2014NY]

If you don't pay it full then it will accrue interest.

yes , that's true but that's a small price to pay for building up credit history. Your first credit card would start charging interest straight away but once you have sufficient credit history , you can get second credit card with 0% APR for 15-21 months. You won't accrue interest on balances during 0% APR months.

Few years back when I was trying to build my credit history in USA , I kept my credit card utilization around 5% and it worked like a charm.

 

[knowledge101]

yes , that's true but that's a small price to pay for building up credit history. Your first credit card would start charging interest straight away but once you have sufficient credit history , you can get second credit card with 0% APR for 15-21 months. You won't accrue interest on balances during 0% APR months.

Few years back when I was trying to build my credit history in USA , I kept my credit card utilization around 5% and it worked like a charm.

That's not correct. Paying your balance in full AFTER the statement closes and generates (when you receive either an electronic statement/bill or one in the mail) will 1) Report the balance to the credit agencies and 2) Allow you to incur 0 interest as you have a grace period from when the statement closes to pay off your balance. Only paying your balance in full BEFORE the statement will be an issue as it would report a $0 balance to the credit agencies. The amount you pay is not reported; just the balance you have when your statement closes. So paying minimums or paying in full both report as good history and being current, but the minimum payment person is getting screwed if he or she can afford to pay in full.

So like this:

I have credit card X. I charge $100 to the card. My statement closes on February 23rd. I get my statement and it shows $100 balance with a $20 minimum payment due March 15th. No matter what I do after my statement, the balance of $100 was reported to credit agencies on February 23rd. This will not change. So now if I pay $20 or $100 it still will show $100 on February 23rd to the credit agencies. If I pay $20 (the minimum) and then charge another $100, on March 23rd I will have a $120 balance + interest for those $80 in other charges. However banks will waive the free grace period after you stop paying in full, which means the ENTIRE $120 balance will now be subject to interest averaged over 365 days AND COMPOUNDED DAILY!!! THIS IS NOT GOOD.

Here is the way to do it:

I have credit card X. I charge $100 to the card. My statement closes on February 23rd. I get my statement and it shows $100 balance with a $20 minimum payment due March 15th. No matter what I do after my statement, the balance of $100 was reported to credit agencies on February 23rd. This will not change. So now if I pay $20 or $100 it still will show $100 on February 23rd to the credit agencies. I pay the full amount of $100 before the due date and then charge another $100 before the next statement, on March 23rd I will have a $100 balance and no interest. My next due date is now April 23rd, I have no interest incurred, AND my balance history for February and March is reported as $100 for each and shows current and on time.

And yes, as you stated, credit utilization is VERY important. Ideally it should be below 10% at all times when a statement generates, but the number you should never cross is 30%. But yes <10% and your score will be great (assuming everything else is ok and your credit ages well)

 

[pie_vancouver]

yes , that's true but that's a small price to pay for building up credit history. Your first credit card would start charging interest straight away but once you have sufficient credit history , you can get second credit card with 0% APR for 15-21 months. You won't accrue interest on balances during 0% APR months.

Few years back when I was trying to build my credit history in USA , I kept my credit card utilization around 5% and it worked like a charm.

You think interest charges is not a big deal? Do you even know how these credit card comapnies compute interests? Even if you have $10 left unpaid on the balance due it will accrue starting on the first day of the prior statement period base on average daily balance, so if you have big charges in any of the days you will be surprise how much is the interest even if the outstanding balance is small.

 

[mawcanada]

That's not correct. Paying your balance in full AFTER the statement closes and generates (when you receive either an electronic statement/bill or one in the mail) will 1) Report the balance to the credit agencies and 2) Allow you to incur 0 interest as you have a grace period from when the statement closes to pay off your balance. Only paying your balance in full BEFORE the statement will be an issue as it would report a $0 balance to the credit agencies. The amount you pay is not reported; just the balance you have when your statement closes. So paying minimums or paying in full both report as good history and being current, but the minimum payment person is getting screwed if he or she can afford to pay in full.

So like this:

I have credit card X. I charge $100 to the card. My statement closes on February 23rd. I get my statement and it shows $100 balance with a $20 minimum payment due March 15th. No matter what I do after my statement, the balance of $100 was reported to credit agencies on February 23rd. This will not change. So now if I pay $20 or $100 it still will show $100 on February 23rd to the credit agencies. If I pay $20 (the minimum) and then charge another $100, on March 23rd I will have a $120 balance + interest for those $80 in other charges. However banks will waive the free grace period after you stop paying in full, which means the ENTIRE $120 balance will now be subject to interest averaged over 365 days AND COMPOUNDED DAILY!!! THIS IS NOT GOOD.

Here is the way to do it:

I have credit card X. I charge $100 to the card. My statement closes on February 23rd. I get my statement and it shows $100 balance with a $20 minimum payment due March 15th. No matter what I do after my statement, the balance of $100 was reported to credit agencies on February 23rd. This will not change. So now if I pay $20 or $100 it still will show $100 on February 23rd to the credit agencies. I pay the full amount of $100 before the due date and then charge another $100 before the next statement, on March 23rd I will have a $100 balance and no interest. My next due date is now April 23rd, I have no interest incurred, AND my balance history for February and March is reported as $100 for each and shows current and on time.

And yes, as you stated, credit utilization is VERY important. Ideally it should be below 10% at all times when a statement generates, but the number you should never cross is 30%. But yes <10% and your score will be great (assuming everything else is ok and your credit ages well)

Thank you that's very helpful.

 

[APPNOV2014NY]

One more relevant link:

https://www.creditkarma.com/question/zero-credit-card-utilization-a-bad-thing

You think interest charges is not a big deal? Do you even know how these credit card comapnies compute interests? Even if you have $10 left unpaid on the balance due it will accrue starting on the first day of the prior statement period base on average daily balance, so if you have big charges in any of the days you will be surprise how much is the interest even if the outstanding balance is small.

;D I paid interest only during my first year of Credit History building exercise. I did not pay much interest by keeping 5% utilization rate on a 500$ secured credit card. As far as I can recall I have not paid a single dime as Interest to credit card companies in last couple of years. I did pay 3% fees on Balance Transfers and Car loan interest but not on Credit Cards. I have over 120k limits on my USA credit cards after 9 years of Credit History and my wife piggy backed on my Credit history and got 30k credit limit on 2 cards after 6 months of getting SSN ( this makes me super jealous ). Enough bragging . Apologies. Lol. All this is useless now since both of us will start from scratch to build Canadian credit history

Original Poster -> Credit History building is not rocket science and you will find much better information on Financial forums then Immigration forums.

 

[knowledge101]

One more relevant link:

https://www.creditkarma.com/question/zero-credit-card-utilization-a-bad-thing

;D I paid interest only during my first year of Credit History building exercise. I did not pay much interest by keeping 5% utilization rate on a 500$ secured credit card. As far as I can recall I have not paid a single dime as Interest to credit card companies in last couple of years. I did pay 3% fees on Balance Transfers and Car loan interest but not on Credit Cards. I have over 120k limits on my USA credit cards after 9 years of Credit History and my wife piggy backed on my Credit history and got 30k credit limit on 2 cards after 6 months of getting SSN ( this makes me super jealous ). Enough bragging . Apologies. Lol. All this is useless now since both of us will start from scratch to build Canadian credit history

Original Poster -> Credit History building is not rocket science and you will find much better information on Financial forums then Immigration forums.

The point of arguing with your post was to prevent spreading misinformation. Carrying a balance is NOT necessary to build credit. Paying off the balance in full each month as long as you actually use the card each month will achieve the same effect and avoid the interest. You're welcome to pay the small amount of interest, but to some newbies who have 0 credit experience it can turn into a bad habit and snowball...essentially, why teach people a bad habit if there's a chance they may get into a bigger hole? Both carrying a balance and charging a card, paying it off post-statement, and charging it again next month achieve the same exact thing on your credit report and will not appear any differently.

 

[APPNOV2014NY]

The point of arguing with your post was to prevent spreading misinformation.

I disagree. I have not provided any incorrect information and I have backed up my knowledge and experience with relevant links.