If you are looking to build or improve your credit score in Canada, a secured credit card can be an effective tool. A secured credit card requires a cash deposit as collateral, which serves as the credit limit for the card. This makes it easier for people with little or no credit history, or those with poor credit scores, to qualify for a credit card. TD Bank offers a secured credit card in Canada that can help you establish or rebuild your credit. In this article, we will discuss how to get a TD Secured Credit Card in Canada, eligibility criteria, credit score requirements, fees and limits, and how to use it effectively.
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What is a Secured Credit Card?
A secured credit card requires a security deposit, which acts as collateral in case you don’t pay your balance. The credit limit is usually equal to the amount of the deposit. As you use the card responsibly and make on-time payments, you can improve your credit score and eventually qualify for an unsecured credit card.
TD Bank Secured Credit Card Canada
Toronto-Dominion (TD) Bank offers a secured credit card that can help you build or improve your credit. The TD Cash Secured Credit Card requires a minimum security deposit of $500 and a minimum credit score of 600. The credit limit is based on your deposit, so if you put down $500, your credit limit will be $500. The card has an annual fee of $29 and an interest rate of 24.99% on purchases and balance transfers.
Benefits of a TD Secured Credit Card
Before we delve into the process of obtaining a TD Secured Credit Card, let’s first discuss the benefits of having one. A TD Secured Credit Card offers several advantages, including:
- Credit building: A TD Secured Credit Card can help you build your credit score, as long as you use it responsibly and make your payments on time.
- Convenience: With a TD Secured Credit Card, you can make purchases online, over the phone, or in person.
- Security: TD Secured Credit Card transactions are protected by Visa’s Zero Liability Policy, which means you won’t be held responsible for unauthorized purchases.
- Rewards: Depending on the specific TD Secured Credit Card you choose, you may be eligible for rewards such as cashback, points, or travel miles.
How to Get a TD Secured Credit Card Canada
Now that we’ve covered the benefits of a TD Secured Credit Card, you may be wondering how to apply for a TD Secured Credit Card in Canada. Here are the steps you’ll need to take:
- Check your credit score: Before applying for any credit card, it’s always a good idea to check your credit score to see where you stand. TD Bank requires a minimum credit score of 550 for its secured credit cards, so make sure your score meets that threshold.
- Gather your documents: To apply for a TD Secured Credit Card, you’ll need to provide proof of income and identification, such as a passport or driver’s license.
- Visit a TD Bank branch: To apply for a TD Secured Credit Card, you’ll need to visit a TD Bank branch in person. You can use TD Bank’s branch locator tool on their website to find a branch near you.
- Speak with a representative: Once you arrive at the branch, speak with a representative and let them know you’re interested in applying for a TD Secured Credit Card. They will guide you through the application process and help you fill out the necessary paperwork.
- Make your security deposit: If you’re approved for a TD Secured Credit Card, you’ll need to make a security deposit. The deposit amount will vary based on your creditworthiness but typically ranges from $500 to $5,000. Your credit limit will be equal to the amount of your deposit.
- Wait for your card to arrive: After you’ve been approved and made your security deposit, you’ll need to wait for your TD Secured Credit Card to arrive in the mail. Once you receive it, you can activate it and start using it to build your credit.
Eligibility Criteria for a TD Secured Credit Card Canada
To be eligible for a TD Secured Credit Card in Canada, you must meet the following criteria:
- Be a Canadian resident: You must be a Canadian citizen or permanent resident to apply for a TD Secured Credit Card.
- Be at least 18 years old: You must be at least 18 years old to apply for a TD Secured Credit Card.
- Have a cash deposit: As mentioned earlier, you will need to provide a cash deposit to secure your credit limit.
Credit Score Requirements for a TD Secured Credit Card Canada
If you’re interested in getting a TD Secured Credit Card in Canada, it’s important to know the credit score requirements. TD Bank requires a minimum credit score of 550 for its secured credit cards, which is considered a fair credit score. However, even if you meet the minimum credit score requirement, it doesn’t guarantee approval for the card. TD Bank will also consider other factors such as your income, employment status, and credit history.
It’s important to note that even if you have a low credit score, you may still be able to qualify for a TD Secured Credit Card. With a security deposit, you can obtain a credit card even if you have a limited credit history or a low credit score. Your credit limit will be equal to the amount of your deposit, which can range from $500 to $5,000.
Once you have a TD Secured Credit Card, it’s important to use it responsibly and make timely payments. This will help you build a positive credit history and improve your credit score over time. By demonstrating responsible credit usage, you may eventually qualify for an unsecured credit card with a higher credit limit and better rewards.
If you’re not sure what your credit score is, you can check it for free using services like Credit Karma or Borrowell. These services allow you to monitor your credit score and report on a regular basis, so you can track your progress and identify areas where you need to improve.
FAQ
Q: What is a TD Secured Credit Card?
A: A TD Secured Credit Card is a credit card that requires a security deposit as collateral in order to be approved. This type of card is designed for individuals who have a limited credit history or poor credit scores, as it can help them build or improve their credit over time.
Q: What is the minimum credit score required for a TD Secured Credit Card?
A: TD Bank requires a minimum credit score of 550 for approval of a Secured Credit Card. However, meeting the minimum credit score requirement does not guarantee approval as there are other factors to consider, such as your income and debt-to-income ratio.
Q: How much of a security deposit is required for a TD Secured Credit Card?
A: The amount of the security deposit required for a TD Secured Credit Card will depend on the credit limit you are approved for. Generally, the security deposit will be equal to the credit limit, so if you are approved for a $500 credit limit, you will need to provide a $500 security deposit.
Q: How long does it take to get approved for a TD Secured Credit Card?
A: The approval process for a TD Secured Credit Card can vary, but generally, it can take up to 10 business days to receive a decision. This timeline may be impacted by the completeness and accuracy of the application, as well as the bank’s internal processes.
Q: Can I use my TD Secured Credit Card to make purchases immediately?
A: Yes, once you are approved and provide the security deposit, you can start using your TD Secured Credit Card to make purchases immediately. The security deposit is held as collateral and will be returned to you when the account is closed or upgraded to an unsecured credit card.
Q: Can I increase my credit limit on my TD Secured Credit Card?
A: Yes, you can request a credit limit increase on your TD Secured Credit Card. The bank may review your credit history and other factors to determine if an increase is appropriate. Additionally, you may be required to provide an additional security deposit if your credit limit is increased.
Q: How do I make payments on my TD Secured Credit Card?
A: You can make payments on your TD Secured Credit Card online, over the phone, or through the mail. You can also set up automatic payments to ensure that your payments are always made on time. It’s important to make payments on time and in full to avoid late fees and negative impacts on your credit score.
Q: How long does it take for a TD Secured Credit Card to become unsecured?
A: The timeline for a TD Secured Credit Card to become unsecured will depend on your credit history and behaviour. Generally, it can take anywhere from 6 months to 2 years of responsible credit behaviour to be considered for an upgrade to an unsecured credit card.
Q: What happens to my security deposit when my TD Secured Credit Card becomes unsecured?
A: If your TD Secured Credit Card is upgraded to an unsecured credit card, your security deposit will be returned to you. However, the bank may keep the security deposit for a short period of time to ensure that all outstanding balances have been paid in full before returning the deposit.
Q: What is the difference between a TD Secured Credit Card and an unsecured credit card?
A: A TD Secured Credit Card requires a security deposit as collateral to be approved, while an unsecured credit card does not require collateral. Unsecured credit cards are typically only approved for individuals with good or excellent credit scores, while secured credit cards are designed for individuals with a limited credit history or poor credit scores.
Q: Can I use my TD Secured Credit Card for cash advances?
A: Yes, you can use your TD Secured Credit Card for cash advances. However, it’s important to note that cash advances typically come with higher interest rates and fees than regular purchases, so it’s important to use them sparingly and pay them off as soon as possible.
Q: What happens if I am unable to make a payment on my TD Secured Credit Card?
A: If you are unable to make a payment on your TD Secured Credit Card, you may be charged a late fee and interest on the outstanding balance. Additionally, missed payments can negatively impact your credit score. If you are having difficulty making payments, it’s important to contact TD Bank as soon as possible to discuss your options.
Q: Can I apply for a TD Secured Credit Card if I am a newcomer to Canada?
A: Yes, TD Bank offers secured credit cards for newcomers to Canada who may not have a Canadian credit history. However, you will still need to provide a security deposit as collateral to be approved.
Q: What is the difference between a TD Secured Credit Card and a prepaid credit card?
A: A TD Secured Credit Card requires a security deposit as collateral and functions like a regular credit card, allowing you to make purchases and build credit. A prepaid credit card, on the other hand, requires you to load money onto the card before you can use it to make purchases and does not help build credit.
Q: Can I upgrade my TD Secured Credit Card to a regular unsecured credit card?
A: Yes, if you have demonstrated responsible credit behaviour, you may be able to upgrade your TD Secured Credit Card to a regular unsecured credit card. However, this is not guaranteed and the bank will review your credit history and other factors before making a decision.
Q: Can I apply for a TD Secured Credit Card online?
A: Yes, you can apply for a TD Secured Credit Card online through the TD Bank website. Alternatively, you can visit a TD Bank branch in person to apply.
Q: How do I know if my TD Secured Credit Card is right for me?
A: A TD Secured Credit Card may be a good option for you if you have a limited or poor credit history and are looking to build credit. It can also be a good option if you are new to Canada and do not have a Canadian credit history. However, it’s important to consider the interest rates, fees, and credit limits associated with the card before applying.
Q: How do I make payments on my TD Secured Credit Card?
A: You can make payments on your TD Secured Credit Card through TD Bank’s online banking platform, by phone, or by mail. You can also set up automatic payments to ensure that your payments are always made on time.
Q: How long does it take to receive a TD Secured Credit Card after applying?
A: The timeline for receiving a TD Secured Credit Card after applying can vary, but typically it takes 7-10 business days to receive the card in the mail. If you need the card more quickly, you may be able to request expedited shipping for an additional fee.
Q: Can I add an authorized user to my TD Secured Credit Card?
A: Yes, you can add an authorized user to your TD Secured Credit Card. However, it’s important to note that the primary cardholder is responsible for all charges made by authorized users, so it’s important to only add trusted individuals as authorized users.
Q: How do I increase my credit limit on my TD Secured Credit Card?
A: You can request a credit limit increase on your TD Secured Credit Card by contacting TD Bank’s customer service. However, it’s important to note that you may be required to provide additional security deposit funds to support the increased credit limit.
Q: Can I use my TD Secured Credit Card for international purchases?
A: Yes, you can use your TD Secured Credit Card for international purchases. However, it’s important to note that foreign transaction fees may apply, so it’s important to review your card’s terms and conditions before using it for international purchases.
Q: How do I cancel my TD Secured Credit Card?
A: You can cancel your TD Secured Credit Card by contacting TD Bank’s customer service. It’s important to note that you will still be responsible for paying off any outstanding balances on the card before it can be cancelled.
Final Thoughts
A TD Secured Credit Card can be a great option for those who are looking to build or rebuild their credit in Canada. With a security deposit, you can obtain a credit card even if you have a limited credit history or a low credit score. By using your TD Secured Credit Card responsibly and making timely payments, you can improve your credit score and eventually qualify for an unsecured credit card. Remember to always read the terms and conditions of any credit card you’re considering, and make sure you understand the fees and interest rates associated with the card. With a little patience and responsible credit usage, you can build a strong credit history and achieve your financial goals.