So You Want to Be a Credit Card Person ~ Budget to Wealth

Dave Ramsey would be ashamed.

For most people, debit cards are far safer than credit cards — and credit cards should only be considered when you’re truly standing on solid financial ground. In Ramsey terms, that means after Baby Step 3, with 3–6 months of expenses sitting in a fully funded emergency fund.

Credit cards are not a right of passage. They’re a responsibility. And like any financial tool, they can either reward you or completely wreck you.

Before diving into the world of revolving debt — or deciding whether you should keep the credit card you already have — you need to qualify yourself.

Step 1: Qualify Yourself

If you currently have a credit card:

Ask yourself the #1 question:

Have you failed to pay off your full balance even once in the last year?

If the answer is yes,
👉 You are not a credit card person.

Period. A single month of interest wipes out an entire year of “free” points.

If you’re wondering whether you should get a credit card:

Ask yourself:

Do you have 3–6 months of emergency savings?
Do you always pay your bills on time with no late fees.
Are you free from any consumer debt (other than mortgage or student loans)?

If you answered no to any of these,
👉 You are not ready for a credit card.

Credit Cards Are Not for Everyone — But Almost Everyone Has One

This is the surprising part.

According to the Bank of Canada, 90% of Canadians have a credit card.
Yet 45% of cardholders carry a balance month to month.

That means only about half of all credit card users are actually using their credit cards responsibly.

The bar is extremely low to be approved for a credit card — and that’s intentional. Credit card companies profit from financially unprepared people using their cards.

Being approved doesn’t mean you are ready.
Raise your standards.

Step 2: You Qualified — Now You Go Credit Card Shopping

If you’ve passed all the criteria — emergency fund in place, zero late payments, no consumer debt — congratulations! You’re in the minority of people who are likely to use credit cards responsibly.

Now it’s time to shop.

The credit card landscape is cluttered with hundreds of options: bank cards, retail cards, airline cards, hotel cards, and everything in between. Let’s simplify.

1. Do You Want an Annual Fee?

Credit cards make money in two ways:

Merchant transaction fees, and
Interest from people who don’t pay their bills

So why do some cards charge an annual fee?
Because higher fees often fund higher perks.

But here’s the math:

If a card has a $100 annual fee,
And gives 1% cashback,
You must spend $10,000 a year just to break even.

Spend $20,000? Congratulations — you earned $100.

Annual fees can go all the way up to $600+ for premium cards with airport lounge access, insurance perks, and 4–5% category rewards. For some people, this becomes a game — swapping cards at different stores to maximize every purchase.

If you spend less than $25,000 a year, my recommendation is simple:

👉 Go with a no-fee credit card.

You’ll sleep better.

2. Points or Cashback?

This is a personality test.

Cashback

Simple
Straightforward
A dollar is a dollar

Points

Mysterious
Often inflated
Gamified
Sometimes part-time job levels of effort

Some points programs offer “boosts” like:

Double points at restaurants
Triple points on groceries
Limited-time category bonuses
Deals you must “activate” to earn

If you enjoy hunting deals, points might scratch that itch. If you want simplicity, cashback is your friend.

3. Category Cards or No Categories?

Some people carry four or five cards:

A card for restaurants
A card for gas
A card for groceries
A card for travel
And a general spending card

Sure, it maximizes rewards — but it also maximizes complexity. One missed payment, even once a year, and all those extra rewards evaporate.

If you value simplicity:

👉 Choose one good general rewards card with few categories to manage.

4. Bonus Features

Premium cards may offer perks such as:

Free checked bags
Airport lounge access
Rental car insurance
Roadside assistance
Hotel status
Airfare discounts

These can be valuable if you travel often — but irrelevant if you don’t.

My Recommendations:

Wealthsimple Credit Card - Visa - Link

2% back on everything
No conversion fees when traveling or buying in different currencies
Easy to wave annual fee

Costco Credit Card - Master Card - Link

$0 Annual Fee
3% at Restaurants and Costco Gas
2% at other Gas Stations and purchases on Costco.ca
1% everything else

I’m a big supporter of no annual fees, and if you already shop at Costco, the Costco Mastercard is a strong all-around choice—especially for gas and restaurant spending. If you prefer simplicity in your rewards, the Wealthsimple card is hard to beat with its straight 2% back on every purchase.

Treat Your Credit Card Like a Debit Card

This is the golden rule:

👉 Never spend money you don’t already have.

Studies consistently show that people spend more when paying with credit versus debit or cash. Track your spending, stay within budget, and automate your full-balance payment every month.

If you have an annual fee, remind yourself:
You start the year in a hole.
Your goal is to climb back out.

Final Thoughts

Credit cards can absolutely work in your favor. If used correctly, they can earn you thousands of dollars in perks and cashback over a lifetime.

But they only work for people who:

Never carry a balance
Pay on time every time
Don’t overspend
Keep a fully funded emergency fund

If you meet those criteria, go forth and reap the rewards.
If you don’t, stick with your debit card — and thank yourself later.

Budget to Wealth