Do I Have to Get a Credit Card with My Bank?

For most, it’s likely that the first credit card you sign-up for will be through your bank – but whether or not you have to get a card with them is another story. Like all bank accounts and financing options, we don’t think you should limit your choices to what’s being offered by the lender you do your daily banking with; in fact, getting a credit card with another provider may be better for you.

Before making a decision, consider some of the advantages and disadvantages of getting a credit card with your bank.

ADVANTAGES

Quick Application Process –The credit card application process is often tedious. Credit card issuers need to gather as much information about you as possible, to determine your creditworthiness and then give you the credit card of your choice. Thankfully, much of this information is already recorded by your bank; this means the application process would be expedited when applying for a credit card offered by your bank.

Big Financial Picture and Easy Payments –Credit card payments will also be easier to make, as all your financial information is consolidated with one provider and laid out in front of you. You will be able to see how much you have spent on your credit card and how much money you have in your debit account, all on one online banking account; this makes monitoring your finances and paying off your credit card balance simple.

Waived Annual Fees – Because of hefty annual fees, it can be difficult to get good annual returns from your rewards credit card. However, some banks, such as TD, will waive the annual fee on your credit card if you also have a bank account with them; this is something to seriously consider, if your bank offers a rewards credit card that could generate a good return and you don’t want to worry about having to pay an annual fee for it.

DISADVANTAGES

Forgone Sign-up Bonuses –Credit card issuers want your business and may offer attractive sign-up bonuses to get it. The kicker: these bonuses can be a lot better than the ones offered by your bank. By staying loyal to your bank, you may be missing out on hundreds of dollars of credit card sign-up bonuses. For example, what if you did all your banking elsewhere but found a Scotiabank credit card with a $200 sign-up bonus? Could you ignore that? Goodbye, free money.

Less Variety –When you shop for credit cards exclusively at your bank, you limit your choices. For example, credit cards for certain rewards programs may not be offered by your bank. If you’re an Aeroplan rewards member, and like the idea of getting an Aeroplan credit card but also want to get a card through your bank, you would have to be a CIBC or TD customer. If you’re not willing to get a card from a different bank, you’ll miss out on some great rewards.

Seized Bank Accounts – In most credit card agreements with your bank, embedded in the fine print is a clause which gives your bank the authority to withdraw directly from your account to pay off your credit card balance. This is typically only used for the minimum credit card payment, however, if you carry a significant balance long enough without paying, your bank may seize your bank account altogether. Scary stuff.

It is important to weigh the pros and cons of any credit card, before you submit an application for it, but this is especially true if you’re thinking about staying loyal to your bank and only getting a credit card with them. Your bank may not have the best credit card in Canada for you, so it’s crucial to shop around before making your decision. You may even want to consider getting a second credit card, if you already have one with your bank.

To see what’s out there, use our credit card comparison tool and find the best credit card to suit your needs – no matter who offers it!