Stepping into the world of credit cards can be tricky, especially if you have no experience with them.
While there are so many travel credit cards on the market boasting perks like lounge access or points towards flights, there's a lot more to consider when choosing the right card for you.
Narcity spoke to Barry Choi, personal finance and travel expert at Money We Have , to find out what people need to know about travel credit cards, especially if they've never had a credit card before.
Building a credit score takes time
All those shiny travel perks might make you desperate to hop on a plane as soon as possible, but building a good credit score takes time so you'll need to check yours before you try applying.
According to credit reporting agency Equifax , credit scores usually factor in different types of credit such as credit cards, installment loans, mortgages, and store accounts.
But even if you don't have a credit card, it's still possible to be approved for a travel credit card, Choi said.
"If you have an established credit score in Canada already from other means such as a mortgage or utility bills, it's still possible to be approved. You won't necessarily know for sure until you actually apply," he said.
Choi recommends using a free service to check your credit score first before applying for any new credit cards.
"If you've got a good credit score and you meet the other requirements, such as the income requirement, you're probably in good shape," he added.
If you don't have a credit score yet, it will take some time to build that up before you apply for a new credit card.
Equifax has recommended some ways to build up that all-important credit score before applying for a travel credit card, such as getting a secured or student credit card or a secured loan.
You could also become an authorized user on someone else's credit card account, or get a co-signer for your own credit card to help boost your score.
Think about your travel goals when looking at a credit card
There are so many different travel credit cards on the market with perks ranging from points to use on flights and hotels, to free checked baggage or lounge access.
If you're exploring your travel credit card options, Choi suggests thinking about your travel goals first before applying for a card.
"I recommend looking at your goals and figuring out what points you need if you're trying to travel on points and work backwards," he said.
For example, if you live in Toronto and you want to travel to Europe and back on points, you will have a few different options available to you.
"You could sign up for an Aeroplan credit card that has a generous welcome bonus. Core cards usually have a bonus worth about 50,000 points, whereas premium cards usually have a bonus of around 100,000 points. Signing up for one credit card could be enough to get you to Europe and back," he said.
Choi added that with American Express membership rewards, the points you earn with the card can be transferred to Aeroplan at a one-to-one ratio which could give you even more points to use.
"If you're planning well in advance and you signed up for two credit cards, you could literally have enough points for two people to fly to Europe," he said.
A premium card might be worth the cost if you travel a lot
Travel credit cards usually come with a range of annual fees from free cards such as the American Express Green Card to the American Express Platinum Card which costs $699 a year.
Depending on how much you plan to travel, you might just realize that paying more for a premium card is actually worthwhile as it likely comes with a lot more benefits, Choi said.
"If you're going to travel more than usual this year... then it might be beneficial to sign up for one of those premium credit cards even though it has a high annual fee," he said.
"You might be able to use the lounges quite often and you might be able to take advantage of free checked bags," he added.
All those added benefits could mean that you actually spend less overall so be thorough when you're choosing your card.
You need to pay it off in full every month
While credit cards can certainly be handy, especially if you can get some travel perks, it isn't just free money.
Whenever you're looking at opening a new credit card, it's important to familiarize yourself with the fees. Failing to pay off your card in a timely manner could work out way more expensive in the long run.
"It doesn't matter how many rewards you're earning. If you're not paying off the full balance every single month, it's just not worth it," Choi said.
"The charges will cost you more than any rewards you earn," he added.
All credit cards will outline how much interest you will be charged so pay attention whenever you're exploring your options. Even if you have secured a new credit card, make sure you're paying it off in full every month to avoid additional charges.
You might get charged foreign transaction fees
Using your new travel credit card in Canada is definitely beneficial if you're looking to level up your travel experience by earning points.
But watch out if you're planning to use the card overseas as you could rack up more charges than you'd expect.
"Certain cards charge you for transaction fees when you use them overseas so keep that in mind. That's typically around 2.5%," Choi said.
However, there are certain cards on the market such as the Scotiabank Passport Visa Infinite Card that have no foreign exchange fees so it's well worth checking those out if you're making plans to travel abroad.
So depending on your current credit score and what your travel goals are, there is likely to be the perfect travel card out there for you.
This interview has been condensed and edited for clarity.
