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Credit 101: How it Can Help You and Hurt You

Written by Madi Werynski

Credit cards don’t have to be scary.

Want to test your credit knowledge? Play Just for Funds Trivia and you could win $1,000*!

Speaking of credit, the CIBC Aventura® Visa* Card for Students can earn you up to 5,000 bonus Aventura® Points for travel1. You can also earn one Aventura Point for every $1 spent on eligible purchases at gas stations, grocery stores, and drugstores3. Consider the points you could rack up every time you’re forced to buy things like dish soap and paper towels that you burn through after every house party!

It seems like a no brainer. But, what about those “dangers of debt” horror stories students are often bombarded with?

We don’t want bad credit to crush your dreams and haunt you for life. That’s why we’re here to teach you the hacks to maintaining a healthy credit history. That way, we can help you get the things you want like a loan, a house or a car! So, let’s look credit straight in the eye and find out how it can help us instead of hurt us.

Okay, what exactly is credit?

Credit is when a bank gives you money to use now based on the trust you’ll pay it back later. Think of the bank as your friend. If your friend lends you $10 and you pay them back when you said you would, they’ll likely lend you $10 again. If you don’t pay them back, next time you ask they may be more hesitant.  The same goes for credit. 

What is interest?

Interest is the money that a lender (like a bank) charges you for borrowing money. In most cases, credit cards will give you a “grace period” on purchases you make where no interest is charged on what you borrow.

So imagine your friend who lends you $10 says, “If you pay me back this month, you can pay me $10, but if you pay after the end of the month you’ll have to pay me $11.” So interest is the incremental money you pay if you hold a balance (meaning you don’t pay off your credit card every month).

On the flip side, when you have a chunk of money in a savings account, the bank pays YOU interest for keeping your money there so they can use it for investments and give people loans.

What’s the difference between credit history and credit score?

Your credit history is like a resume of all the financial choices you’ve made. It includes things like your payment history, how many credit cards you own, how much debt you have and how long you’ve been using credit. Your credit score – a number between 300 and 900 – is like a grade on your report card that shows how good you are at following the lender’s rules. It’s used to determine what kinds of loans and interest rates you’ll qualify for. The higher the score, the better.

So, why do you need good credit?

When it comes to applying for cell phone plans, getting car insurance and later on when it’s time for some big-ticket items to be purchased, it’s essential that you have some credit history established to prove you’re financially responsible. (You basically need to have proof you won’t ghost people when they give you money.) Your prospective employers and landlords can and will check credit ratings to make sure you make smart decisions.

Okay, so how do you start building good credit?

  • Pay on time – It’s important to make sure you pay your student loan, and credit card bills on time. Every time. Late payments can seriously damage your credit rating. And the longer you wait to pay, the more interest will accumulate and the more money you will owe.


  • Don’t spend money you don’t have – Got approved for a $5,000 limit credit card? It feels like you hit the jackpot and suddenly have free money in your pocket. Hold your horses, big spender. That’s just the maximum amount you can borrow, and you’ll have to pay it all back. When you make a purchase on your credit card, get into the habit of jumping online and transferring that amount from your bank account to bring your balance down. Overspending will just dig your debt hole deeper.


  • Keep your outstanding credit card balance low – Leave lots of space between your outstanding balance (what you owe) and credit limit (the maximum amount you can borrow). And never exceed your credit limit! To maximize your credit score-building ability, try to keep your spending between 30 and 40 percent of your monthly limit.


  • Avoid cash advances – Using a credit card for quick cash is expensive since interest is charged on the money from the day you borrow it (there’s no grace period as mentioned above). But do keep in mind that cash advances are available – and a handy way to get out of an emergency situation.

Start building credit with a credit card from CIBC:

Strangely enough, not having a credit card can affect you almost as much as having bad credit. A great way to start building your credit is to get yourself a credit card and start making regular purchases. Use it instead of your debit card to start racking up credit and potential sweet points and rewards. Whether it be for travel, shopping or other student discounts, there are so many different kinds of cards available. A great option for students is the CIBC Aventura® Visa* Card for Students. Don’t forget, you could earn up to 5,000 bonus Aventura Points for travel1. You’ll even earn one point for every $1 spent on eligible purchases at gas stations, grocery stores, and drugstores3. I mean, hey, we all need to eat and go places!

Plus, with any eligible CIBC youth or student product, you’ll also be eligible to receive a free digital SPC membership that you can use to save money on new threads, fitness, and food! In fact, students who use SPC save on average $200 a year2.

So, if you’re interested in earning points with the CIBC Aventura Visa Card for Students, and saving money on many everyday student essentials with the free SPC membership you’ll receive, you should sign up! If you do, you may be eligible to be automatically entered into Full Ride for a chance to win $35,000 to help pay your tuition◊◊.

Points for travel. Discounts on the coolest swag. A chance to win $35,000 tuition. It’s a sweet deal. Offer ends March 1, 2020. Conditions apply◊◊.


† To be eligible for a free SPC membership, you must hold an eligible CIBC product at the time you register for the membership, which you must do through CIBC online or mobile banking. Eligible CIBC products include a CIBC Youth or Student bank account, Student credit card or Student line of credit. A complete list of eligible CIBC products can be found at Joint account holders of eligible CIBC products are not eligible for membership. You must also be a legal resident of Canada who is fourteen (14) years of age or over, but under the age of thirty (30) years if the eligible CIBC product you use to qualify for the membership is a student line of credit. The membership will automatically renew and remain in effect for as long as you hold an eligible CIBC product. Trade-mark/registered trademark of Student Price Card Ltd.

1. You must apply and be approved for a new CIBC Aventura® Visa* / CIBC Aventura® Visa* for Students card between November 1, 2019 and March 1, 2020 to qualify for this offer.

If you apply and are approved for a new CIBC Aventura® Visa* / CIBC Aventura® Visa* for Students card, you can receive:

i. A welcome bonus of 2,500 Aventura Points when you make your first purchase at any time with your card

i. Up to 2,500 bonus Aventura Points for completing the below activities within 60 days of your CIBC Aventura® Visa* account approval. The following activities are worth 500 Aventura Points each: 1. Share your email address with CIBC; 2. Sign up for eStatements for your new Aventura Visa card; 3. Add an authorized user on your new Aventura Visa card; 4. Hold any eligible CIBC Chequing Account; and 5. Add your Aventura Visa card with Apple Pay® or Samsung Pay. It may take up to two statement cycles for the bonus Aventura Points to appear on your credit card statement after each of the above activities have been completed. You can provide us with your email address and sign up for eStatements through CIBC Online Banking, by visiting a branch or calling 1-800-465-4653. This offer is applicable to the first authorized user added only. Your authorized users will be issued the additional card(s) automatically when we get your request, as long as your credit card account is: a) still in good standing at that time, and b) your request does not exceed a total of 3 authorized users (counting any existing authorized users you may already have). Authorized users under the age of 13 can only be added by calling CIBC at 1-800-465-4653. You must hold any of the following CIBC Chequing accounts: CIBC Everyday® Chequing Account, CIBC Smart™ Account, CIBC SmartPlus® Account, CIBC US$ Personal Account, CIBC Personal Chequing Account, CIBC EverydayPlus® Chequing Account, CIBC Waive Account®, CIBC MenuPlus® – Maximize Interest Account, CIBC Chequing Savings Account. If you already have an existing eligible CIBC Chequing account or shared your email address with CIBC, you will be qualified to receive the 500 Aventura Points each. If you do not have an eligible account you may apply at or by calling 1-866-525-8622. To learn more about the mobile payment options, visit

ii. An additional bonus of 2,500 Aventura Points if you have at least $500 in net purchases posted to your account during the first 4 monthly statement periods

Offer applies to newly approved card accounts only; transfers from an existing CIBC credit card to a CIBC Aventura® Visa* Card / CIBC Aventura® Visa* for Students are excluded. Card account must be open and in good standing at the time the Aventura Points are awarded. Aventura Points are awarded to you within 8 weeks after all qualifying purchase(s) are posted to your account. The following do not qualify as purchases: cash advances, balance transfers, CIBC Convenience Cheques, fees, interest, Aventura Points redemptions and payments. It may take up to several business days for purchases to be posted to your account. This offer is not transferable. This offer may be withdrawn or changed without prior notice at any time. Card account must be open and in good standing at the time the Aventura Points are awarded. This offer may be revoked if you appear to be manipulating or abusing it, or are engaged in any suspicious or fraudulent activity, as determined by CIBC in its sole discretion.

2. Source:

3. Earn 1 Aventura Point on purchases (excluding returns) at merchants classified in the credit card network as grocery stores, service stations or automated gas dispensers, or drug stores. This bonus Aventura Points offer is only available on the first $6,000 in net annual card purchases on your account (meaning purchases by all cardholders) at grocery, drug store and gas merchants; after that, net card purchases at grocery, drug store and gas merchants will earn Aventura Points at the regular rate. The $6,000 limit will reset to zero after the day your December statement is printed. Terms, conditions and eligible merchant categories may change without notice.

◊◊ NO PURCHASE NECESSARY. Open January 1st, 2020 to December 31st, 2020 to legal residents of Canada who are sixteen (16) years of age or older and are current students of an accredited Canadian university, college or secondary school. One (1) Grand Prize available to be won consisting of: one (1) cheque for $8,750 made payable to the winner; one (1) 1-year GIC for $8,750 opened in the winner’s name; one (1) 2-year GIC for $8,750 opened in the winner’s name, and one (1) 3-year GIC for $8,750 opened in the winner’s name. Odds of winning depend on number of eligible entries received. Math skill testing question required. Full Contest Rules Règlements officiels d’inscription au Concours

*NO PURCHASE NECESSARY. Open January 16th, 2019 at 12:01 am. Eastern Time (“ET”) to February 15th, 2019 at 11:59:59p.m. ET to legal residents of Canada who are sixteen (16) years of age or older and are current students of an accredited Canadian university, college or secondary school. One (1) $1,000 prize available. Odds of winning depend on the number of eligible entries received. Math skill test required. Full Contest Rules available here.

* Trademark of Visa Int., used under license.

The CIBC logo is a registered trademark of CIBC, used under license. All other trademarks are owned by their respective owners.

CIBC Aventura Visa Card for Students

*Opinions expressed are those of the author, and not necessarily those of Student Life Network or their partners.