How does the canadian banking system ? 5 questions to understand everything

You're going to be moving to Canada or just put your bags and you are lost in the face of the banking system ? Decryption by Souad Ouared, director of the National Bank of Canada.

1. In Canada, there are two bank cards : debit card and credit card. What is the difference ?

There are two cards separate and distinct, each of which has their interest. The debit card is linked to your bank account. It is through it that you can access the money that you have to remove in the vending machines to buy in stores, pay at the restaurant... You receive it automatically and free of charge once you open an account in Canada.

The credit card it offers you the possibility to spend money that does not belong to you. It gives you the right to a credit in a limit according to your profile (if you are working or not...). This often varies between 500 and 5000$CA. To obtain this, it is necessary that you make the request with your bank. This can be accepted or not. But don't worry, programs such as the one for the newcomers of the National Bank of Canada can get it even being a new customer. So don't hesitate to request it upon your arrival.

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2. How shall reimburse a-t-on the advances obtained through credit card ?

once per month, you must pay the total amount of expenses advanced. If you do, then you'll have no extra fee charged. However, if you don't pay back, you will need to add interest. These are very high : around 19%. This point scares often the French who arrive in Canada but it is not necessary to be afraid, just be vigilant. It is recommended that you greatly to use this credit system in the function of your means. If you can't pay the full amount, try to repay at least the minimum amount. And for those who are afraid of forgetting to pay on time, you can make a payment pre-authorized, it limits the stress...

3. What are the benefits of the credit card ?

Unlike the debit card, it allows you to make transactions on the internet. Certain, pay, also offer benefits : additional warranties, insurance, etc. But the main point remains that it is the easiest way to build a credit history !

4. Precisely, what exactly is this system of credit history ?

It represents solvency, the credibility of the person to use credit and manage their finances. It is central in Canada ! In concrete terms, each time you make a credit, you are noticed on your behavior. The scores range from R1, the best note, to R9. Each credit is side : if you pay off with more than a month of delay, for example, you go in R2...

The other score used, it is the Beacon Score. A sort of general average of all of your behaviors related to the credit period for payment, number of credits, balances that are used... The ratings go from 300 to 900. As soon as you are below 680, then it is wrong. But don't worry, nothing is final : the credit bureau is a living thing. If you have had a few delays... you can restore your notes over a period of months.

5. In which case consults-t-on our credit history ?

Nobody can access it without your permission. But, you may be asked in 4 main scenarios : - when you are looking to obtain financing to buy a house, a car...

- when you negotiate the credit rate that you will be able to get for a loan (the higher your credit history is good, the lower the rate that you will be offered will be advantageous).

- the owners of a property that you wish to rent, the insurers of the car... can also ask to have access to it.

- just as some employers for whom it remains a criterion of eligibility for a position.

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A last point that may surprise you when arriving in Canada...

The French are often surprised by the level of transaction costs. For common operations such as transfers, withdrawals, bill payments... you will need to account$15 CDN per month on average. Don't be surprised !

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