Life on Credit

The art of borrowing money

How to Use Credit Cards Smart

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Credit cards have benefits and drawbacks and knowing them is the key to staying away from debt and making better money choices. While drawbacks include high interest rates and card debt, there are also multiple benefits such as earning cash back and rewards points, easier budgeting, and more.

Drawbacks

Getting in Debt

Some people view credit cards as free money which can be dangerous, especially when combined with overspending and making frivolous purchases. Borrowing large amounts without repaying them can easily land you in serious debt. This, on the other hand, will ruin your score and make it more difficult to borrow in the future.

High Interest Rates

Some cards carry high interest rates and not paying the balance in full can be a recipe for financial disaster. You will incur a lot of debt if you tend to spend more than what you can afford to pay. Some store cards also have high rates of over 30 percent and low limits and are best to be avoided.

Benefits

Using Secured Credit Cards to Rebuild Credit

Secured credit cards help people with tarnished scores to rebuild credit and access a wide array of borrowing tools with beneficial terms. Cards such as the Refresh Financial Secure Visa Credit Card, for example, feature easy approval regardless of your credit score and affordable interest rates to rebuild your history. This is provided that you spend responsibly and pay off the full balance.Refresh Secured VisaApply Now

Being Able to Rent a Car/Hotel

Another benefit for cardholders is that they can rent a car or book hotel accommodation. Some cards allow users to earn points that can be redeemed for hotel stays and room upgrades. It is also easier to rent a car or book a hotel with a credit card because having one shows that a bank or another entity has already trusted you with credit.

Car Insurance

Using a card that comes with rental car insurance means that you don’t have to buy additional coverage. This means that you save money and time as you don’t have to deal with insurers and check their policies and terms. Some cards go with rental car collision loss/damage insurance, one example being Scotiabank Platinum American Express. Users are automatically insured in case of car theft or damage. Cardholders are covered up to the cost of the rental, except for cars over $65,000.Scotiabank Platinum American ExpressApply Now

Travel Insurance

Some cards also feature travel perks such as travel insurance for flight cancellations and delays and hotel expenses. Issuers offer different types of policies such as emergency medical transportation, travel accident protection, change fee coverage, and trip cancellation. Scotiabank Platinum American Express, for example, offers comprehensive travel coverage, including travel accident, delayed and lost baggage, trip cancellation, hotel/motel burglary, and more.

Earn Rewards Points

Many Canadian banks run rewards programs that allow users to collect points and redeem points for purchases, events and concerts, flights, and statement credit. Rewards points can also be redeemed for food and drinks, hotel stays, trips, and subscription services. Canadian banks also offer cards with flexible redemption options, for example, the Scotiabank Rewards® Visa Card. Users are offered two options – points plus pay or points only. Rewards points can be redeemed for travel, merchandise, prepaid cards, and gift cards. Users also enjoy exclusive benefits such as cruise shore excursions, cruise upgrades, shipboard credit, hotel and vacation package discounts, and car rental discounts.Scotiabank Rewards Visa Card

Earn Cashback

There are also cards that allow users to earn cash back on purchases, including groceries, dining and entertainment, gas, and more. Many cashback cards feature added benefits such as welcome bonuses, low introductory interest rates, no annual fee, and no spending caps. The Scotia Momentum® Visa Infinite Card and Tangerine Money-Back Credit Card are two options to earn money back. The Scotia Momentum® Visa Infinite Card offers 4 percent back for every dollar spent on subscription purchases, recurring payments, and groceries, including supermarket purchases, gym memberships, utility bills, and insurance premiums.
Subscription services include things like lifestyle boxes, meal kit delivery, and music and video streaming.*Limited time offer – Earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). Plus, no annual fee in the first year, including on supplementary cards. A welcome offer value of $350*. Offer ends April 30, 2020.Scotia Momentum Visa Infinite CardApply NowThe Tangerine Money-Back Credit Card offers 2 percent back on purchases in multiple categories, including parking and public transportation, entertainment, home improvement, and drug store purchases. Users also earn money back on gas, hotel and motel stays, dining, furniture, and grocery purchases. Cardholders benefit from perks such as no annual fee, no limits, and automatic earning.Tangerine Money-Back Credit CardApply Now

Budget Easier

Some credit cards also offer breakdown of spending by category which makes budgeting easier. It is easy to track and monitor spending by category, including restaurants, gas stations, and supermarkets. Other categories may not be included, for example, pending transactions, cash advances, balance transfers, and returns. Some issuers also offer advanced features such as the option to browse by merchant category, amount, date, and merchant name. There are spending trackers that enable users to access their credit and debit accounts and choose from different spend categories such as education, dining, donations, cash, business, etc. Users can check their account balance, pending balance, and available funds, set savings goals, and make secure payments.

Start a Business with a Credit Card

Starting a business with a credit card is also an option because many issuers offer cards with high limits. The money can be used to cover startup costs and operating expenses such as salaries, insurance, office supplies and equipment, rent, and taxes. Using a business credit card is also a good way to build business credit and benefit from better terms in the future. The type of card to choose depends on the business that you plan to start and the expenses you are likely to incur. If gas money is your biggest expense, for example, then you may check business cards that offer cash back for gas purchases.Scotia Momentum for Business VISASome cards offer both cash back and insurance perks, for example, the Scotia Momentum® for Business VISA. Scotiabank also features discounts on business purchases, a long grace period of 25 days, and supplementary cards. Businesses are offered comprehensive insurance coverage, including rental car collision loss damage and travel emergency medical insurance.

Have Low Conversion Fees between USD/CAD

This is yet another benefit for cardholders who frequently travel or make purchases in US dollars. Many cards charge foreign transaction fees of 2.5 – 3 percent for purchases made outside of Canada. Some cards, however, feature no US dollar foreign currency conversion fees to help save money on purchases in US dollars.

U.S.Dollar Credit Cards in Canada

As said, these cards help avoid conversion fees and come with added perks such as cash back, rewards points, and insurance coverage. The Scotiabank ® U.S. Dollar VISA Card is one option in Canada, featuring additional benefits such as instant cash advances, free supplementary cards, and car rental discounts.Scotiabank U.S. Dollar VISA Card

Low Interest Credit Cards for Longer Term Borrowing

Low interest credit cards help save on interest charges and are a good choice for users who find it difficult to pay off the balance in full. Low interest cards can be used for everyday purchases such as car rentals, travel, event tickets, electronics, phone bill payments, online purchases, and others. They can also be used for large purchases that have to be spread out as the interest charges will be lower than that of standard cards.

Credit Cards for Students

Many Canadian issuers also offer cards to students who usually have limited or no credit exposure. In addition to the chance to establish good credit, there are incentives such as money back, rewards points, and no annual fee. The Scotiabank Scene® Visa Card is one option for students who wish to earn rewards points and have no annual fee. Cardholders earn points for purchases at Cineplex.com and Cineplex theatres and for regular purchases. There are added benefits such as free supplementary cards, car rental and restaurant discounts, and credit card protection. Scotiabank Scene Visa CardApply Now

Using Credit Cards Smart

To save on interest charges, it is important to pay the balance in full each month. In some cases, as with large purchases, it is not possible to pay off the balance but it is a good idea to keep it as low as possible. Carrying a balance of over 30 percent is not only costly but may affect your credit score. If you borrow long term, then it is best to use a low interest credit card to save on interest charges that add up. This is also a way to keep debt from piling up. Lastly, borrowing on a credit card makes sense when you plan to start a new business or another productive venture that will earn profits and help repay your debt.

Using a credit card smart is also making you more financially disciplined. On the other hand, carrying large balances means that you spend more than you can afford. This is a red flag for financial institutions and may affect your credit score, especially if your credit utilization is high.

Top 6 Secured Credit Cards for Canadians

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This post has been updated on March 16th, 2019 to reflect recent changes and new developments in the secured credit card marketplace in Canada.

Many years ago I got my first credit card from CIBC, and because I had no credit history I had to settle for a secured credit card. The card had $500 limit, which I had to deposit with the bank – not much of a credit card :). I used it for 2 years making small purchases and paying it off every month diligently, which helped me establish good credit history. While many of the big banks advertise financial products targeted at recent immigrants, and people who simply have no credit history yet, the fact is that getting even a secured credit card is much tougher nowadays in Canada. Even Peoples Trust out of British Columbia, which was a major player in the Canadian secured credit card space, decided to discontinue their card in July, 2017.

In the early 2000’s all major Canadian banks offered secured credit cards, but this is no longer the case. I haven’t seen a secured card advertised by a major Canadian financial institution for a while, and I know for a fact that Scotibank and CIBC have no such products. Even if the rest of the big banks still have such cards on offer, they are not easy to find or their use is discouraged.

If you are in the market for secured card, you might also consider getting a unsecured credit card with low limit, which should be easier to get. You can try store credit cards like Canadian Tire MasterCard for example. While not perfect this card is somewhat easier to obtain, and with less and less financial institutions offering secured credit cards, it may be the right choice for you.

Find a solution to credit issues – get a secured credit card

Individuals with a thin credit file usually apply for a secured card because they have a more limited choice, especially when it comes to specialty cards with attractive rates and terms. They are also offered to those who are new to credit as well as recent immigrants, newcomers, and students. Secured credit cards are available from unions, small and major banks, and other establishments and help consumers establish credit.

How Secured Cards Work

Issuers require a cash deposit or security funds as a guarantee of on-time payment. It is usually equal to or larger than the limit offered. The only difference between secured and unsecured cards is the fact that security funds are required because financial institutions deal with high-risk borrowers who are more likely to default. Other than that, holders can use the card to make payments online and in-store, to pay bills, and so on.

Benefits for Users

The main benefit for users is that payments are reported regularly to major bureaus such as TransUnion and Experian. Customers who keep their balance low and make on-time payments gradually establish or reestablish credit. The timing of reports and the issuer’s reporting practices determine how long it takes before your card appears on your credit file.

What Is the Right Credit Card for You?

The choice of a secured card depends on whether you are a regular bank customer or a union member and other factors. When comparison shopping, look at the credit limit, grace period, and purchase and penalty interest. In general, whether a product is right for you depends on the issuer’s reporting practices. Some establishments report only missed and late payments while others report all payments and help build credit with time.

Who Is Eligible to Apply

Individuals with any credit profile qualify, from tarnished and fair to stellar. Legal residents and Canadian citizens of legal age are eligible to apply. You must be of the age of majority for the province or territory where you reside. Some major banks like TD even offer secured cards to customers who don’t have Canadian credit history, including international students and foreign nationals (temporary residents). The range of products available depends on different factors, including your credit rating and financial situation. When applying for a secured card, consumers are often asked about estimated monthly payments, including lines of credit, loans, mortgages, and other accounts. Financial establishments also request information about your rent or mortgage payments as well as income amount, employer, and sources of income. Many card issuers require that applicants have a verifiable permanent address in Canada and a verifiable source of income (i.e. proof of income).

Top 6 Secured Credit Card Picks

#1 – First Place
No-Fee Scotiabank Value® VISA Cardsb

A yet another credit card by Scotiabank, this is a great solution to transfer existing balances, even though this is not a secured card. The introductory rate is just 3.99 percent and is in effect within 6 months of opening the account. The intro rate applies to credit card checks, balance transfers, and cash advances. The interest-free period is 21 days. Special discounts are offered, including car rental discounts. Optional credit card protection coverage is also available in the event of job loss, disability, or another unfortunate event.
• Balance transfer fees: none
• Interest rate: 16.99 percent
• Annual fee: none

apply

#2 – Second Place
Refresh Financial Secured VisaRefresh Financial Secured Credit Card

This is a brand new secured credit card from Refresh Financial targeted at customers with bad or no credit, and people looking to build or re-build their credit. This secured Visa doesn’t require a credit check, so it should be very easy to get. Here are the main Refresh secured credit card features.

    • Credit limit: $200 to $10,000
    • Purchase Interest rate: 17.99 percent
    • Annual fee: CAD $12.95

apply

#2 – Old Second Place
Peoples Trust Secured MasterCard®peoplestrust_card

This card is no longer available.

This secured card is a flexible solution designed for customers with limited or no credit exposure, new immigrants to Canada, students, and anyone looking to build credit. It is also ideal for borrowers with poor ratings such as discharged bankrupts and those with serious credit problems. Similar to standard cards, this MasterCard helps holders to improve their rating with time. Customers with a verifiable source of income qualify.

  • Credit limit: $500 or higher
  • Purchase Interest rate: 12.99 percent
  • Monthly fee: CAD $5.80
  • Interest rate on cash advances: 24.50 percent

#3 – Third Place
Home Trust Secured Visa CardHomeTrustSecuredVisaCard

Home Trust also offers a credit card that helps consumers to enhance their credit profile. Virtually everyone applying for a secured Visa gets approved, and there are two options available:
• No annual fee with 19.99 percent interest rate
and
• Annual fee of $59 with 14.9 percent interest rate

In addition to attractive terms and interest rate, this card goes with benefits such as the option to add an authorized user and a credit limit that can be as high as $10,000. The minimum limit is $500. This card can be used to book a vacation, make purchases online and over the phone, and access cash.

#4 – Fourth Place
Vancity enviro Secured Visa

Vancity features a secured card with a deposit of just $500 and plenty of added and optional perks, including delay and lost baggage insurance, price protection, travel accident insurance, and others. This card is available to applicants who don’t have a previous Canadian credit history and to recent immigrants. There are different options to look into, for example, enviro Classic which is a good choice for customers who pay the full balance. This card helps borrowers to rebuild credit and is intended for customers who have experienced financial problems in the past.
• Annual fee: none
• Interest rate: 19.5 percent

#5 – Fifth Place
DCU Visa® Platinum Secured Credit CardDCUvisa-secured-platinum

This card is a low-cost alternative to other secured products and goes with travel and everyday benefits and optional overdraft protection. Added benefits include travel insurance coverage, auto rental collision damage waiver, and extended warranty. A major benefit is the fact that there is no minimum interest charge. As an added benefit, balance transfers and cash advances are free. The card also goes with Visa Checkout for safe and convenient shopping.
• Interest rate: 11.50 percent
• Penalty charges: 18.00 percent
• Annual fee: none

#6 – Sixth Place
RBC Visa Classic Low Raterb

RBC features a low-cost card designed for customers who carry a balance. The card features optional and standard add-ons such as travel insurance and chip and PIN technology and can be used as a tool for debt consolidation to save on interest payments. Users are also offered additional cards with no annual fee. There is a card registration service for important documents and cards and auto payment service for ease and convenience.
• Interest rate: 11.99 percent
• Annual fee: $20

#7 – Seventh Place
Capital One® Guaranteed Secured MasterCard® guaranteed-secured-Cap-One

This card is ideal for individuals who need to establish credit history and goes with guaranteed approval. The credit limit varies and can be $300 or higher. The minimum security funds to deposit with the bank and access credit are in the amount of $75. Standard benefits that go with this card include referral to the closest ATM, zero liability, and others. Holders are free to make internet and in-store purchases, hotel reservations, car rental bookings, gas purchases, and more.
• Purchase rate: 19.8 percent
• Annual fee: $59
• Grace period: min 25 days

Fees, Limits, and Rates

The interest rate varies by issuer and is usually around 20 percent. It is in effect once the account has been activated. The rate on balance transfers and cash advances can be the same or different. In general, the rate is slightly higher compared to unsecured cards because financial institutions take more risk. Many applicants have a history of missed or late payments, maxed out cards, defaults, foreclosure, and even bankruptcy. This is why fees and service charges are usually higher as well. At the same time, there are many banks that feature credit cards with no annual fee, including Scotiabank and TD Canada Trust.

The grace period also varies from 19 to 25 days and applies to regular bank transfers and new purchases. Secured cards have a zero-day grace period on special bank transfers and cash advances. The available limit and security funds required depend on your financial circumstances and can be as high as $10,000 and as low as $500. Some banks even offer cards with lower credit limits. If you plan to make large purchases (one-time and big-ticket items), it is better to choose a card with a larger limit provided that you make timely payments and pay at least the minimum before the deadline (grace period). The minimum payment can be $10 or 3 percent or fees plus interest but this depends on the card of choice. Make sure you check the minimum monthly payment, especially if you only pay the minimum.

Top 12 Best Credit Cards in Canada for 2020

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This post has been updated on January 5th, 2020 with our most recent reviews and rankings of popular credit cards offered to Canadian consumers.

The best credit cards offered by Canadian finance companies, unions, and banks feature money back, airmiles and bonus points, comprehensive insurance coverage, no or low foreign transaction fees, and plenty more.

 Credit CardInterest RateAnnual FeeType 
1. Scotia Momentum Visa Infinite20.99 %$120Cashback Credit Card
2.SimplyCash American Express19.99 %No annual feeCashback Credit Card
3.Tangerine Money-Back Credit Card19.95%No annual feeCashback Credit Card
4.Scotiabank Gold American Express19.99 %$120Travel Credit Card
5.BMO World Elite MasterCard19.99 %$150Travel Credit Card
6.Home Trust Preferred Visa19.99 %No annual feeNo Foreign Transaction Fees
7.Rogers Platinum MasterCard19.99 %No annual feeNo Foreign Transaction Fees
8.Scotiabank Platinum American Express19.99 %$399.00Insurance Coverage
9.BMO Cashback World Elite MasterCard19.99 %$120Insurance Coverage
10.Scotiabank L’earn Visa Card19.99 %No annual feeStudent Credit Card
11.Scotiabank Scene Visa Card19.99 %No annual feeStudent Credit Card
12.Refresh Financial Secured Visa Card17.99 %$12.95Secured Credit Card

Best Canadian Cashback Credit Cards

There are credit cards that feature extra cash back during the promotional period as well as no annual fee, generous welcome bonuses, and no categories or limits.

1. Scotia Momentum® Visa Infinite Card

Offered by the Bank of Nova Scotia, the Scotia Momentum Visa Infinite Card, for example, goes with 4 percent cash back on groceries and gas. The card also features concierge service, travel accident insurance, flight delay insurance, car rental discounts, and a lot more. Optional protection is also offered in case of critical illness, lockout, strike, job loss, or disability. Customers with no credit history are welcome to apply.  However, there is a minimum income requirement of $60,000 a year. Supplementary cards are available to earn more cash back.

There are plenty of added benefits for holders. They are offered discounts on wine, vineyard tours, wine tastings, access to exclusive and premier events, hotel room upgrades, and more.

  • New Offer: Earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). A welcome offer value of $350*.
  • Purchase interest rate: 20.99 percent
  • Balance transfer and cash advance rate: 22.99 percent
  • Annual fee: *$120 waived for the first year. For accounts opened by April 30, 2020
  • Credit limit: $5,000 or higher

2. SimplyCashTM American Express

The SimplyCash American Express Card is also a great choice to earn cash rewards and goes with supplementary cards, no annual fee, and entertainment and travel benefits. Customers earn 5 percent  back during the 6-month promotional period and 1.25 percent back afterwards. Additional benefits include car rental theft and damage coverage, promotional balance transfer rate, shopping discounts, weekend gateway deals, and access to exclusive events such as theater performances and concerts.

  • Funds advance rate: 22.99 percent
  • Purchase rate: 19.99 percent
  • Annual Fee: No

3. Tangerine Money-Back Credit Card

Another option to look into, the Tangerine Money-Back Credit Card goes with no annual fee, 0.5 back on regular purchases, and 2 percent back on select purchases (categories of your choice).

Best Travel Credit Cards

Canadian travel rewards cards feature travel benefits and opportunities, rewards programs, welcome bonuses, double or extra points on travel expenses and gas, and so on. Some cards feature deals and saving opportunities as well as VIP lounge access, travel upgrades, free baggage, and airfare discounts. There are added incentives such as access to luxury airport lounges, car rental and hotel discounts, and comprehensive insurance, including car rental collision, flight delay, and trip delay. Most issuers advertise cards with no blackout dates and other restrictions and limitations.

4. Scotiabank® Gold American Express®

The Scotiabank Gold American Express Card is the perfect choice for customers with no credit history and for newcomers to Canada. The card features add-ons and perks such as special offers, access to airport lounges, concierge service, and travel insurance. Concierge services cover things like show and concert ticket reservations, restaurant reservations, and more. The comprehensive insurance coverage includes lost and delayed baggage, flight delay, trip cancellation, travel accident insurance, etc. The best part is that there are no travel restrictions, and points can be redeemed at any time.

  • New Offer: Earn 20,000 bonus Scotia Rewards points with your first $1,000 in everyday purchases in first 3 months. (For accounts opened by March 1, 2020)
  • Balance transfer rate: 22.99 percent
  • Cash advance rate: 22.99 percent
  • Purchase rate: 19.99 percent
  • Annual fee: $120

5. BMO® World EliteTM MasterCard®

Offered by the Bank of Montreal, the BMO World Elite MasterCard is also a great choice to earn rewards points and take advantage of a host of added benefits. The list of perks includes complimentary lounge access, medical and travel coverage, roadside assistance, and a generous welcome bonus of 35,000 points on purchases over $3,000 during the first 3-month period. Holders earn 2 points on all purchases and 3 points on entertainment and restaurant and travel purchases.

  • Annual fee: $150
  • Purchase rate: 19.99 percent
  • Cash advance rate: 22.99 percent

Best Credit Card with Low/No Foreign Transaction Fees

No foreign transaction fee cards come handy when making purchases abroad or overseas. This is because conversion and foreign transaction fees hike up your card bill. Banks and finance companies offer cards with added incentives such as travel points, complimentary one-time bonuses, no annual fee, money back, and complimentary travel insurance. Some cards also feature cash statement credit, roadside assistance, cash sign-up bonuses, and supplementary cards. There are plenty of perks to look into, including discounts on hotel bookings, extended travel insurance, travel enhancement credit, and a lot more.

6. Home Trust Preferred Visa

The Home Trust Preferred Visa card is one option to consider to avoid foreign transaction fees. In addition to no conversion surcharges, the card goes with guaranteed hotel bookings, complimentary roadside assistance, 1 percent money back, and auto rental loss and collision coverage. There are no cashback limits and restrictions and no annual fee. Emergency cash is also available for peace of mind and so is emergency card replacement. To apply for the Home Trust Preferred Visa customers are asked to provide details such as address and name of current employer, annual income, previous address, etc.

  • Cash advance rate: 19.99 percent
  • Purchase rate: 19.99 percent
  • Grace period: 21 days or more

7. RogersTM Platinum MasterCard®

Another great card with a low foreign transaction fee, the Rogers Platinum MasterCard is offered by the Rogers Bank and goes with a complimentary bonus, money back rewards, and an annual fee waiver. Cash back can be redeemed at different locations, including Fido and Rogers as well as for merchandise, tickets, subscriptions, and more. Points can be redeemed for pre-payed services as well (like Chatr). The Pay with Rewards app by Rogers is a convenient way to redeem money back rewards.

  • Foreign transaction fee: 2.5 percent of the amount/
  • Balance transfer and cash advance rate: 21.5 percent
  • Purchase rate: 19.99 percent
  • Annual fee: none

Best Credit Cards with Insurance Coverage

Insurance credit cards feature comprehensive coverage, including medical, emergency travel, baggage loss, trip cancellation, and other types of coverage. Providers offer a host of added benefits such as free travel, money back, exclusive shopping and travel offers, and no or low annual fees. Customers gain access to tickets for music and theatre performances, fine dining experiences, perks at resorts and luxury hotels, concierge, and more.

8. Scotiabank Platinum American Express®

This credit card by the Bank of Nova Scotia allows users to collect rewards points for select and everyday purchases. They earn 1 point for each dollar on regular purchases and 4 points per dollar on entertainment and dining, grocery purchases, and gas. There are no travel restrictions, and points can be redeemed at anytime and anywhere. The card also goes with a large minimum credit limit of $10,000. Users are offered 7 types of insurance coverage, including trip interruption and cancellation, emergency medical, lost and delayed baggage, flight delay, etc. Added benefits include premium concierge, VIP pass for exclusive events, complimentary lounge, and a lot more. Customers also enjoy access to special events and experiences, including dining, theatre shows, films, music, and shopping.

  • Purchase rate: 19.99 percent
  • Balance transfers/cash advances: 22.99 percent
  • Annual fee: $399.00

9. BMO® Cashback® World Elite® MasterCard®

Also a great card with comprehensive coverage, the BMO Cashback World Elite MasterCard goes with a host of benefits and incentives, including cash back, supplementary cards to earn more. Customers are offered insurance coverage, including extended warranty and purchase protection, collision damage waiver on car rentals, as well as out of country and out of province emergency medical coverage. In addition, holders earn 1.5 percent back on all purchases charged on the card. Cash can be used in the form of credit or held in an investment or savings or checking account. The minimum income requirement is $80,000 for individual cardholders and $150,000 for households.

  • Interest rate on purchases: 19.99 percent
  • Interest rate on cash advances: 22.99 percent
  • Annual fee: $120

Best Student Credit Cards

Many banks in Canada offer student credit cards, including Scotiabank, TD Canada Trust, RBC, and others. Student cards feature multiple benefits such as competitive interest rates, no annual fee, and rewards points. Users earn points on pharmacy and grocery purchases, gas, bills, and more. Some cards offer extra points on entertainment, restaurant, and travel purchases. The best part is that banks have lenient requirements when it comes to credit rating.

10. Scotiabank L’earnTM Visa Card

Scotiabank offers a student Visa that allows customers to build credit with responsible use and timely payments. Applicants with little credit exposure and no credit history qualify and so do newcomers to Canada. The card goes with no annual fee, money back, car rental discounts, and other benefits. Optional protection for unexpected events is available, including death, critical illness, loss of employment, and others. Students also earn cash back at a rate of 1 percent. The minimum credit limit is $500, and the grace or interest-free period is 21 days or longer. Applicants are asked to provide personal and school information such as expected graduation date, start date, and name of college, university, or another institution.

  • Cash advance rate: 22.99 percent
  • Purchase rate: 19.99 percent

11. Scotiabank Scene® Visa Card

Also a great card by the Bank of Nova Scotia, the Scotiabank Scene Visa Card allows customers to earn rewards points on select and regular purchases. Users earn 5 points per dollar at Cineplex, both online and at Cineplex theatres, and 1 point on regular purchases such as clothing, transportation, groceries, meals, and so on. Thus, customers who spend $200 on movies a month will earn a total of 1,000 points. During the first 3 months, the first $500 spent on regular purchases earn a bonus of 2,500 points. Points can be redeemed in different ways – for meals, movies, and more. There is a minimum annual income requirement – $12,000.

  • Annual fee: none
  • Cash advances: 22.99 percent
  • Purchase rate: 19.99 percent

Best Secured Credit Cards and Credit Cards for Bad Credit

Secured cards allow customers with poor and tarnished credit to rebuild their history and rating. This is good news for customers with missed and late payments and a history of delinquencies, foreclosures, and other negative events. Making regular and timely payments over a certain period of time allows borrowers to rebuild credit and apply for loans and cards with beneficial terms. Some secured cards go with higher interest rates, but this is not always the case. The credit limit varies and is usually equal to or lower than the deposit made. The deposit acts as a guarantee of timely payment. This is the reason why customers are approved without credit check. What is more, some providers offer the option to add an authorized user free of charge. Other benefits include Visa and MasterCard benefits, no annual fee, low rate options for authorized and primary cardholders, and more.

12. Refresh Financial Secured Visa Credit Card

This secured Visa by Refresh Financial helps customers to improve their credit score and goes with a competitive interest rate and low annual fee. Virtually everyone gets approved, regardless of their rating. In addition to fast and easy approval, there are added benefits for users, among which free financial education and the opportunity to build savings. The financial intelligence training program offers short educational movies to teach customers how to set financial goals, build personal wealth, save for the future, and use credit cards responsibly. Responsible use is obviously the key to building or rebuilding credit. Wise money management is also essential to stay away from debt in the long run and build a financial safety net. Users also learn how credit works and how to create a personal brand.

  • Interest rate: 17.99 percent
  • Annual fee: $12.95

Top 6 Credit Cards for Bad Credit in Canada 2020

By 172 Comments

This post has been updated on January 6th, 2020 to reflect recent developments in the Canadian financial and credit markets.

Accessing credit is never easy if you have anything but pristine credit score. The most common form of borrowing of course is a credit card, and there are many Canadian financial institutions that offer variety of cards targeted at different market segments. The bad credit credit card market in Canada is really under-served with many of the big players withdrawing their financial products including Peoples Trust who stopped offering their secured credit card, and Affirm financial who also no longer offer their credit cards for bad credit. Home Trust still offer a secured credit card, but they are very picky and getting one from them is not an easy task. Still there is hope for Canadian consumers with bad credit, as a new player called Refresh Financial has entered the secured/bad credit card marketplace. Refresh offer credit cards for borrowers with bad credit, and the good news is they do not do a credit check. The card is relatively easy to qualify for, however keep in mind that this is a secured card, and you will have to come up with the deposit to get one. As the credit conditions get tighter in Canada it will get harder to get a credit card if you have a poor credit, however don’t get discouraged – just check our list of card below and use it as a starting point in your quest for credit card. * It should be noted that some clients reported that credit checks have been done.

There are different options for customers with poor credit, from payday loans and cash advances to secured lines and credit cards for bad credit.

Do You Need a Credit Card if You Already Have Bad Credit?

This depends on your lifestyle, financial literacy, and spending habits but a credit card can actually help build a healthy score. Timely payments allow users to rebuild credit. If you often make financial blunders and are knee-deep in debt, you may want to learn more about credit first.

Can You Get a Credit Card with Bad Credit?

Some lenders offer cards to borrowers with poor and average credit. They often offer cards with a lower limit and higher interest rates because they are considered to be high risk.

Does a Credit Card Help You Rebuild Bad Credit? Secured Credit Cards Explained

A credit card is a useful tool to reestablish credit unless you make late payments. Missed payments also affect your score. Avoid prepaid cards because payments are not reported to the major bureaus. Other cards, including secured and department store cards, help build credit. To get a secured card, clients are asked to make a deposit which is higher or equal to the card’s limit.

Types of Credit Cards for Bad Credit

Secured Credit Cards

securedSecured cards offer many benefits, and one is that it is easier to get approved compared to standard credit cards and unsecured loans. The reason is that financial establishments take no risk. Cardholders use their own money (the deposit made) to make purchases. Lenders will not return the deposit in case of default. They refund the deposit made when the customer decides to close the account. The payments are usually reflected in the borrower’s credit report. The limit normally varies from $200 – $500 to $5,000. Many issuers advertise low annual fees in the range of $10 – $30.

Low Interest Credit Cards

Low interest cards are offered by major unions, banks, finance companies, and online lending services. The main benefit for users is that they save on interest charges. Some issuers offer low interest cards to borrowers with less-than-perfect credit and feature perks such as gas rewards, cash back, payment alerts, and others. The credit line is usually lower, for example, $500 – $1,000, but some companies advertise opportunities for line increases provided that cardholders make timely payments. It is important to ask whether payments are reported to TransUnion or Equifax on a regular basis.

Guaranteed Credit Cards

Guaranteed approval cards by MasterCard and Visa are also offered to borrowers with less than perfect and tarnished credit. While some issuers advertise guaranteed or instant approval, they offer secured versions whereby the deposit serves as a guarantee of timely payments. They are available to consumers who need credit improvement and feature standard benefits such as price protection, travel assistance, baggage delay coverage, and others. Basically, issuers that offer guaranteed cards have more lenient or minimum requirements for approval. They may advertise no employment or credit checks and no application or processing fees.

Prepaid Credit Cards

LOCPrepaid cards allow users to make purchases and payments but are not the best solution for rebuilding credit. Payments are usually not reported. Still this is one option for customers with bad credit and a history of consumer proposals, foreclosure, bankruptcy, and seriously delinquent accounts. There are different reload options, including in person, online, and through direct deposit. Some issuers advertise no-fee cash withdrawals. Prepaid cards also feature online bill pay options, balance alerts, free ATM withdrawals, business and payroll programs, refer-a-friend bonuses, and other benefits. Many issuers advertise no activation or application fees, free online banking, online statements, and free direct deposits.

Store Credit Cards

A department store card is yet another option for borrowers with bad credit and offers plenty of added benefits. Cardholders benefit from perks such as promos and discounts, sales, savings on major or one-time purchases, coupons, and other benefits. Some department stores even advertise interest-free financing. Holders enjoy a zero introductory rate for a certain period, for example, six months. However, department store cards usually go with higher charges than secured and standard credit cards. While the rate is slightly higher, this is one option for applicants with a thin credit file and borrowers who need a credit boost.

Where Can You Find Credit Card Lenders for People with Bad Credit?

Major financial establishments such as RBC, BMO, and other big banks offer cards for bad credit.

Affirm MasterCard®

This card is no longer available.

Affirm Financial Services specializes in providing credit solutions for Canadians who may have difficulty obtaining a credit card or loan from traditional financial institutions. Here are the most important Affirm MasterCard® features:

  • True credit – no security deposit required
  • Credit limit up to $3,000
  • Use it anywhere MasterCard® cards are accepted
  • Fixed interest rate – 29.99% for homeowners and 34.99% for non-homeowners
  • Reports to credit bureaus every month

This card is issued by Peoples Trust Company pursuant to license by MasterCard® International Incorporated. MasterCard® and MasterCard® Brand Mark are registered trademarks of MasterCard® International Incorporated.

No-Fee Scotiabank Value® Visa Card

sbThe Bank of Nova Scotia features the No-Fee Scotiabank Value Visa Card which is available to debt-ridden borrowers with credit problems. The bank offers benefits such as card protection, an introductory rate of 3.99 percent, and car rental discounts. Additional benefits include itemized transactions and supplementary cards. The introductory rate applies to balance transfers and cash advances, which makes it a great choice if you plan to transfer high-interest balances to a low-interest card. The low introductory rate helps borrowers to pay down existing balances faster and get rid of debt.

• Interest rate: 16.99 percent
• Annual fee: zero
• Credit limit: $500 or more

apply

Refresh Financial Secured VisaRefresh Financial Secured Credit Card

This secured card is a new product from Refresh Financial targeted at customers with low credit score or no credit. The card can be used to re-build credit score, and as it doesn’t require a credit check, it may be your best chance for getting a credit card. Here are the main Refresh secured credit card features.

  • Credit limit: $200 to $10,000
  • Purchase Interest rate: 17.99 percent
  • Annual fee: CAD $12.95

apply

Peoples Trust Secured MasterCard®peoplestrust_card

This card is no longer available.

Peoples Trust Secured MasterCard is ideal for those who are new to credit, consumers with credit problems, new immigrants, and students. Holders can use it just like a regular card to make hotel bookings and everyday purchases, car rentals, online purchases, and anything else. This card also allows consumers to make cash advances and build credit over time. Peoples Trust advertises almost guaranteed approval, regardless of credit profile.

  • Minimum deposit: $500
  • Interest rate: 12.99 percent
  • Monthly fee: CAD $5.80
  • Monthly fee (additional cards): CAD $2.95

Home Trust Secured Visa Card

The Home Trust Secured Visa Card is another option that requires a security deposit of at least $500. The limit is based on the deposit made and ranges from $500 to $10,000. There is a low-rate option that goes with an interest rate of 14.9 percent. The standard rate is 19.99 percent and there is no annual fee. The low-rate option goes with a fee of $59. This card is offered to consumers with bad credit and everyone gets approved. If you have less than perfect or poor credit, this card will help you to build or reestablish your credit history. You can use it to book a hotel room, make purchases online and by phone, pay bills, pay for gas, and more.

Apply Now 14.90% $59 annual fee or $5 per monthApply Now 19.99% No annual fee

BMO® Preferred Rate MasterCard®

bmThe BMO Preferred Rate MasterCard is a card advertised with no annual fee and an interest rate of 17.5 percent. The card also features a long interest-free period of 21 days. While applicants with bad credit get approved, those with a history of bankruptcies do not qualify. If you have filed for bankruptcy over the last 7 years, your application will be declined. BMO also requires employment and income information. Customers are offered perks and benefits such as:

• Low-rate options (11.9 percent)
• Travel benefits
• Purchase protection
• Extended warranty
• Roadside assistance
• Medical protection
• Trip cancellation coverage

Capital One® Guaranteed Secured MasterCard®

CapThe Capital One Guaranteed Secured MasterCard, for example, features guaranteed approval and a limit of $300 or higher. It is a good choice for customers with no credit and tarnished credit. The good thing about this card is that you can use it like a standard card – to make bookings, for car rentals, online purchases, in-store purchases, and more. Capital One features standard benefits such as emergency cash advances and card replacement and zero liability.

• Interest rate: 19.8 percent
• Annual fee: $59

TD Emerald Visa Card

The TD Emerald Visa Card is also a good choice for bad credit borrowers and goes with benefits such as:td

• Low annual fee of $25
• Security and purchasing convenience
• Automotive benefits
• Travel benefits
• Medical insurance

Applicants are allowed to add up to three cardholders. The card goes with a competitive variable rate of 12.75 percent and is a great option for borrowers with bad credit, students, and newcomers to Canada. Cardholders are offered trip interruption coverage, trip cancellation insurance, car rental discounts, and other perks. TD Emerald Visa is also advertised as a balance transfer card for debt consolidation.

RBC Visa Classic Low Rate

rbThe RBC Visa Classic Low Rate is yet another card with a low interest rate of 11.99 percent and an annual fee of $20. Additional cards are available at no added cost. This option is a great choice for those considering debt consolidation. Major benefits include free travelers checks, worldwide acceptance, easy application, and others. Optional travel insurance is also available to protect customers in case of loss of job or illness. Customers benefit from autopayment options, cash advances, and quick application processing. This card is also an excellent choice for debt consolidation. You can use it to make one-time or larger purchases.

What to Do Next?

Once you have been approved for a low rate, department store, or secured card, it is time to learn how to manage credit responsibly. This means timely and regular payments to avoid penalty fees and charges. Late and missing payments also affect your score and chances to get approved for low-cost unsecured loans, LOCs, and premium credit cards. Avoid using multiple cards because it is more difficult to keep track of due dates, payments, and other details. Check your financial statements regularly to track your spending and payments. Using online banking is a great way to view your statements, payment history, and transactions. Make sure you check your credit report for mistakes and omissions. Consumers are entitled to receive a free report once a year.

If you have other balances, try to pay down your auto, consumer, and other loan balances to boost your score. The goal is to maintain a debt to income ratio of 30 percent or lower. Paying down small balances on different cards helps improve your score. Pick one or two cards with affordable rates and use them for payments and purchases.

Keep in mind that credit cards are intended for regular, small purchases and unexpected expenses, for example, utility and medical bills, auto insurance, plumbing and electrical problems, car repairs, and others. You can use your card for grocery shopping, bill payment, trips to the ER, car maintenance, vehicle registration fees, and other small expenses. It makes no sense to buy big-ticket items on a credit card. It is better to use a low-cost unsecured loan instead. Otherwise, you will end up paying a huge balance, and your score may suffer as a result.

If you have poor credit and find it difficult to manage your finances, you may want to contact a credit counseling service. They offer financial education to teach borrowers how to manage debt responsibly. The goal is to gain financial stability and control and make sound credit and borrowing decisions. Specialists negotiate with creditors, help customers to calculate their debt to income ratio, sort out their finances, and more.

Home Trust Credit Cards

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Home Trust is a major mortgage and loan provider that offers a selection of financial solutions, including retail credit, deposits, VISA credit cards, and other products. Customers are also offered retail credit and receivable purchase plans. The home improvement program offers fully open loans, instant approval, and flexible financing solutions for kitchens, room additions, patio construction, decks and patios, flooring, air conditioning, and other items.

Home Trust Credit Cards

Home Trust offers credit cards for bad credit by VISA to its customers, regardless of their credit profile. Secured versions are available to borrowers with tarnished scores who are unable to access other sources of funding.

Home Trust Equityline® Visa Card

This card is available to borrowers who have equity in their homes and offers the opportunity to earn cash back on eligible purchases. It is a good solution for home improvement projects and business financing. This card by Visa allows customers to earn 1 percent back on everyday purchases and comes with no annual fee and benefits such as guaranteed hotel reservations, legal assistance and health services, and emergency card replacement. Virtually everyone qualifies. Given the low interest rate, this is a good solution for high-interest balances and debt consolidation. Customers who repay the outstanding balance in full are free to cancel the card.

  • APR: as low as 9.99 percent
  • No annual fee
  • Up to $100,000 in credit

Home Trust Secured Visa Card

This is another product for customers with less than perfect and bad credit that goes with a maximum credit limit of $10,000 and minimum limit of $500. Holders are free to use the card to book vacations and to make purchases over the phone and online. The main benefit is that payments are reported to the major bureaus meaning that timely payments allow borrowers to establish credit.

1st Option

  • APR: 14.9 percent
  • Monthly fee: $5
  • Annual fee: $59

2nd Option

  • Purchase APR: 19.99 percent
  • Cash Advance rate: 19.99 percent
  • No annual fee
  • Interest-free period: at least 21 days

apply

About the Company

Home Trust is a Canadian trust company that is federally regulated and serves a large customer base, from borrowers with past credit problems to customers with no credit history or provable income and self-employed entrepreneurs. The company was founded in 1977 and was originally named the Home Savings and Loan Corporation. It is publicly traded under the ticker HCG on the Toronto Stock Exchange. Headquartered in Toronto, the company has branches across Canada and is a member of VISA Canada and the Canada Deposit Insurance Corporation. Home Trust takes pride in offering flexible solutions and non-traditional financial products to help clients consolidate high-interest balances, save on interest, or purchase a home.

Scotiabank Credit Cards at a Glance

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The Bank of Nova Scotia offers specialty and standard credit cards with add-ons and incentives such as concierge service, complimentary hotel room and ticket upgrades, bonus rewards points, low annual and service fees, and many more. The bank offers business and personal cards and additional cards as well as secured and unsecured versions, depending on the customers’ debt to income ratio, income level, and credit score. There are low rate, no annual fee, student, travel, cashback, and other types of cards on offer with plenty of added features, including optional and complimentary services. Clients can choose from American Express and Visa offers with different credit limits, security features, travel and shopping benefits, and a lot more. There are special offers for creditworthy customers as well.

Scotiabank No Fee Credit Cards

No-Fee Scotiabank Value® VISA Credit Cardsb

This card is definitely a great deal for people with bad credit and comes with a special intro rate, VISA checkout, no annual fees, and 3.99% introductory interest rate on balance transfers for the first 6 months. The bank also offers special discounts, safety features such as credit card protection, and the opportunity to repay high-interest outstanding balances. Card checks are also available to help pay utilities, groceries, medical bills, and so on.

• No annual fee
• APR: 16.99 percent
• Intro rate: 3.99 percent apply

No-Fee ScotiaGold® VISA card SB_gold

Note: This card is no longer available. The information described here is solely for existing Cardholders.
A yet another no-fee Scotiabank offer, this card is the perfect choice for frequent travelers because of the added everyday and travel benefits. In addition to exclusive car rental discounts, the card comes with rental car collision coverage, commission-free travelers checks, and other add-ons. Credit card protection is an optional safety feature, and cardholders benefit from add-ons such as instant cash advances, chip technology, and more.

• Purchase APR: 19.99 percent
• Credit limit: $5,000
• Annual fee: none
• Grace period: 21 days

SCENE® VISA* CardSB_scene

SCENE VISA also goes with no annual fee and rewards points for purchases at select retailers and for everyday purchases. You earn 2500 bonus SCENE points with your first $500 in everyday purchases in first 3 months, and there are added benefits such as exclusive rental discounts, mobile wallet features. Clients are free to exchange points for free movies, entertainment, and more. A free movie is worth just 1,000 points, and customers get 10 percent off snacks.

• Annual fee: none
• APR: 19.99 percent
• Credit limit: min $500apply

Scotiabank Low Rate Credit Cards

Scotiabank Value VISA* cardSB_value

This is a great card for major savings on balance transfers, and holders benefits from no transfer fees and a special rate of 0.99 percent valid for six months. Added incentives include discounts on AVIS rentals, supplementary cards, VISA checkout for smartphones, laptops, and other devices, and the option to pay down balances over a shorter period.

• APR: 11.99 percent
• Free supplementary cards
• Annual fee: $29
• Grace period: min 21 daysapply

Scotiabank Cashback Credit Cards

Scotia Momentum® VISA Infinite* cardSB_monentum_infinite

Scotia Momentum goes with a fee waiver during the first year, cashback on regular and drugstore purchases, gas, and grocery store purchases. Cardholders earn 4 percent back on groceries and gas and 2 percent on recurring bill payments. Purchases at drug stores also earn at 2 percent. One percent is offered on all other purchases. Insurance and standard benefits apply, including flight delay and trip interruption coverage.

• NEW Offer: 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). A welcome offer value of $350*.
• APR: 20.99 percent
• Credit limit: at least $5,000
• Annual fee: $120 *waived for the first year. For accounts opened by April 30, 2020apply

Scotia Momentum® Cash back VISA* cardSB_momentun_no_fee

A great cashback offer by Scotiabank, this card features a special intro rate offered on transfers and advances as well as card checks, up to 2 percent cash back on eligible drug store, gas, and other purchases, and other incentives. The intro rate during the first 6 months is just 1.99 percent. Worldwide acceptance and Scotia card protection are added benefits. The bank also features a handy calculator to help calculate cashback.

• APR: 19.99 percent
• Credit limit: min $500
• Annual fee: $39apply

Scotia Momentum® No-Fee VISA* CardSB_momentun_no_fee

A no-fee VISA card with great features, Scotia Momentum comes with a special rate of 7.99 percent and 0.5 to 1 percent cash back, 22.99% on cash advances and balance transfers. Cash back is offered on eligible grocery, everyday, gas, and other purchases. Recurring bill payments earn 1 percent, including subscriptions, home and car insurance coverage, utilities, cable and phone. Cashback applies to purchases at service stations, pharmacies and drug stores, supermarkets, grocery stores, and other participating merchants.

• APR: 19.99 percent
• Min credit limit: $500
• No annual fee
• Grace period: 21 daysapply

Scotiabank Student Credit Cards

L’earn VISA* cardSB_learn

This card comes with money rewards and helps students build a healthy credit score. Students earn up to 1 percent in cashback and benefit from added features such as instant cash advances, 20 percent off rental discounts, and card checks. Holders are free to order additional cards or optional balance protection.

• No annual fee
• APR: 19.99 percent

Scotiabank Rewards Credit Cards

ScotiaGold Passport® VISA* card

This card is also a good choice for frequent travelers and goes with comprehensive travel insurance, 1 point for each $1 in eligible purchases, 5 percent cashback, and other incentives. Add-ons include rental car collision, trip cancellation, and travel emergency insurance. Cardholders benefit from major savings on travelers checks and emergency medical insurance.

• APR: 19.99 percent
• Annual fee: $65apply

ScotiaHockey® NHL® VISA* card SB_nhl

Note: This card is no longer available. The information described here is solely for existing Cardholders.
Scotiabank offers a specialty rewards card that goes with discounts on in-store purchases, rewards points, and other incentives. Discounts are offered on car rentals and NHL merchandise. The first purchase on the card earns 5,000 rewards points.

• Earn rate: 1 point per $1 in purchases
• APR: 19.99 percent
• Annual fee: $29

Scotiabank Rewards® VISA* Card SB_rewards

This product is a great choice for customers looking for a credit card with rewards and no annual fee. The card goes with points to be redeemed for cruise deals, holiday packages, hotel accommodation, airfare, and more.

• APR: 19.99 percent
• Annual fee: none

Scotiabank Travel Rewards Cards

Scotiabank Gold American Express Card

This travel rewards card offers 1 point on every two dollars in eligible purchases and features travel benefits and a flexible redemption schedule. Easy access and the option to book travel online are add-ons in addition to discounts on airfare, vacations and cruise packages, and car rentals. Points can be redeemed for gift items, investments, and more.

• NEW Offer: Earn 20,000 bonus Scotia Rewards points with your first $1,000 in everyday purchases in first 3 months. (For accounts opened by March 1, 2020)
• APR: 19.99 percent
• Annual fee: $120apply

Scotiabank American Express CardSB_amex

Scotiabank offers customers the opportunity to earn 20,000 in complimentary points and features a flexible rewards program that allows cardholders to earn 4 points on purchases made at entertainment venues, restaurants, grocery stores, and gas stations. 1 Scotia Rewards point on all eligible everyday purchases.

• Purchase APR: 19.99 percent
• No annual feeapply

Scotiabank Credit Card Application

It is easy to apply online or at the local branch, provided that you haven’t declared bankruptcy recently (during the last 7 years), are a Canadian citizen, and fill in an application you’re your personal, income, financial, and other information. Applicants are asked to provide details such as deposit and savings accounts, time at job, place of employment, residential address, stock and investments.

Online Banking

Scotiabank also offers online banking facilities with beneficial features such as e-transfers, info alerts, Western Union money transfers. Customers are free to make money transfers, pay bills, check their account and balance history, and make pre-authorized payments. There is an option to open a trade account online and benefit from attractive pricing and commissions.