Credit Card Eligibility Explained

by Barry Choi November 15, 2016 / No Comments

So you’ve been searching for a credit card and found the perfect card for you. However, there’s one problem: You’re not sure if you’re eligible to apply for your chosen rewards credit card.

With premium credit cards, it’s pretty straightforward. There’s usually a minimum income requirement (for example, a yearly annual personal income of $60,000 or a household income of $100,000).

If you don’t reach that threshold, you’ll likely be declined. But in most situations, credit card eligibility depends on your credit score.

How your credit score affects your credit card eligibility

Generally speaking, credit card eligibility is based on your credit score. If you have a good credit score (typically 725 or above), you’ll most likely be approved for an unsecured card. If you have a poor credit score, you may only qualify for a secured credit card.

What confuses some people is how their credit score is calculated. It’s actually pretty straightforward and determined by the following five factors:

  • Payment history (35%)
  • Amount owed (30%)
  • Length of credit history (15%)
  • New credit applications (10%)
  • Types of credit used (10%)

For most people, if you have a history of paying your bills on time and don’t carry too much debt, you’ll have a good credit score. This means you shouldn’t have any problems getting approved for a credit card.

If you know you have a good credit score and end up being declined for a new credit application, don’t freak out. Sometimes lenders may need additional information (or have the wrong information from you) so give them a call if you suspect something isn’t right.

Three credit cards to consider

The Scotiabank Value Visa is a great card for those who’re looking to pay down their balances faster. The card has a 0% interest rate on balance transfers for the first six months (for accounts opened by Jan. 31, 2017). After the promotional rate ends, your daily interest rate will be 11.99% which will help you save hundreds of dollars a year. The card has a low annual fee of just $29 and the minimum income required is only $12,000 annually.

Scotiabank Value Visa

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  • Limited time: Receive a $75 gift card of your choice upon approval
  • Limited time: Get an introductory 0% interest rate on balance transfers for the first six months
  • Low interest rate of 11.99%

Like the Scotiabank Value Visa, the SimplyCash Card from American Express has low personal income requirements (just $15,000 annually). With this card, you’ll earn 5% cash back (up to $250) on eligible purchases at grocery stores, gas stations, and restaurants for the first six months. Even after the promotional rate ends, you’ll still earn 1.25% on all purchases, making it a generous no-fee credit card. As an added bonus, you get travel accident, purchase assurance and protection, and car rental theft and damage insurance.

SimplyCash Card from American Express

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  • No annual fee
  • Earn 5% cash back on all eligible purchases at gas stations, grocery stores, and restaurants in Canada (up to $250 cash back) for the first six months
  • Earn 1.25% cash back on all other purchases when your welcome rate endsli>

The BMO World Elite MasterCard is a travel rewards credit card with an annual fee of $150. Despite the high fee, the benefits included are quite appealing. You get a $300 travel credit (after spending $1,000 in the first three months), VIP airport lounge access, concierge service, and much more. You’ll also earn two BMO rewards points for every $1 spent, which works out to 2% back in travel rewards. However, this card does have higher income requirements than the other two cards. There’s a minimum $70,000 (individual) or $120,000 (household) annual income required.

BMO World Elite MasterCard

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  • Earn two BMO Rewards points per $1 spent—that’s 2% back in travel rewards
  • Sign-up bonus of 30,000 BMO Rewards points (worth $300 in travel rewards)
  • Comprehensive travel insurance benefits

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Flickr: frankieleon