Antony’s Personal Opinion

After living in Canada for about 4 months, I realized that building credit history is very important here. What is credit history? It is a record of our credit activities, for example how much money we have borrowed, how punctual we pay our credit, have we ever declared bankruptcy, etc. There are several agencies, like Equifax, Trans Union and Experian, which monitor our credit activities and give our data to the lenders. The lenders then will decide how much credit they want to give to us and how much interest rate we have to pay.

How do they get our credit record? Many ways… Credit card usage is one example. They monitor how we use our credit card. Phone bill is another example. They will record how punctual we pay the bill. If we borrow money, then it will definitely be tracked by them. Isn’t that scary? There is “someone” out there watching our shopping habits.

Personally, I don’t like to apply for credit. When I was a kid, my mother always told me, never apply for credit. Try your best to buy everything using your own money. Well… buying a house is an exception. The price of a house is getting higher and higher. What I mean here is buying things other than house, for instance car, furniture, television, fridge, etc. If we cannot afford something, simply don’t buy it. American people are more interesting, they use credit card to buy everything, including food, groceries, gasoline and many other things.

In my humble opinion, the idea of credit card is not good. We borrow money to buy something and then we pay them “next time”. Sometimes we are surprise seeing the number in our credit card bill. Debit card is much better than credit card. You still use a “card” to buy something, but now you use your own money. I don’t know why debit card is not popular in North America. They have debit card system already, but somehow people don’t use it. Worse of all, I have debit card in Canada, but I (almost) never use it. Why? Because my bank will charge me if I use it more than the allowed limit (10 transactions per month). Of course I can pay some amount of money to get “unlimited transactions”, but why should I do that.

Before coming to North America, I used credit card very rarely. I used it for online transaction only although I have been using PayPal for quite a while now. I feel much “safer” buying something using debit card. I can see the money is taken out from my account right away. No need to afraid of interest rate. A friend of mine, who is Canadian, was very surprise when he visited a shop in Germany and he could not use credit card. He had to pay using cash or debit card. Interesting, huh?

Since I need credit history, I have been using credit card extensively these days. Last time, when I applied for credit card, my bank asked my credit history, which I didn’t have because I was new in this country. I have showed them my credit card in Germany, but they said they could not accept it. What happened then? They rejected my credit card application. Now let’s thing logically…. I was new in the country, so I won’t have credit history (of course, even kids know that). I would like to start building a credit history, that’s why I applied for credit card. But I cannot apply credit card because I need credit history. Which comes first, egg or chicken?

What I don’t understand, why they didn’t check my portfolio, for instance. Isn’t it sufficient to check my portfolio in the last 1 - 2 years? It should give them an overview about my financial situation. Fortunately, after rejecting my application, they called me back. They asked about my job. I explained to them about my job, how long I have been working with my current company, how much my salary, etc, etc…. Ok, finally they were willing to approve it, but they need my phone bill for the last 3 months. What? Didn’t I tell them that I was still new in the country? How could I have 3 months phone bill? Once again, which comes first, chicken or egg?