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Best Credit Cards for 2020

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Canadian issuers such as the Bank of Nova Scotia, Desjardins, and Bank of Montreal feature rewards, cashback, low annual fee, student, and other types of cards that are not to miss. Customers enjoy a number of added perks such as rewards schemes, concierge services, car rental discounts and insurance, and sign-up bonuses.

Best Travel Credit Cards

Scotiabank Gold American Express

Scotiabank features a travel card that offers rewards points on entertainment, dining, grocery shopping, gas, and other eligible purchases. Their Scotia Rewards Travel Service enables customers to book travel and enjoy a comprehensive insurance package. Other travel perks and incentives include special offers, Priority Pass membership and access to airport lounges, and concierge services. The card offers additional benefits such as access to fashion, music, film, and dining events.  Supplementary cards are also available.

  • Annual fee: $99
  • Interest rate: 19.99 percent
  • Balance transfers and cash advances: 22.99 percent
  • Limited time offer: Earn 20,000 bonus Scotia Rewards points with your first $1,000 in everyday purchases in first 3 months. Offer ends on March 1, 2020

Home Trust Preferred Visa

Home Trust offers a Visa card with travel benefits such as no foreign exchange conversion fees, auto rental collision insurance, and roadside assistance. Roadside assistance is offered free of charge and entitles customers to 4 service calls annually. Cardholders also earn 1 percent cash back on all items charged to the card, and there is no limit to the amount that can be earned.

  • Annual fee: none
  • Interest rate: 19.99 percent
  • Cash advance rate: 19.99 percent

Best Low Fee Credit Cards

MBNA Rewards Platinum Plus MasterCard

This rewards credit card by MBNA is a good deal in that it allows customers to earn points on a daily basis. Every dollar spent on eligible purchases earns 2 points, including dining, grocery items, and gas. A welcome bonus of 2,500 points is offered with the first purchase to customers who opt for e-statements. Cardholders are free to redeem points for gift cards, travel, merchandise, charity donations, etc. They also enjoy everyday and security services such as lost luggage assistance, emergency services, and ticket replacement.

  • Annual fee: none
  • Purchase rate: 19.99 percent
  • Balance transfer rate: 22.99 percent
  • Cash advance rate: 24.99 percent

Blue Sky Credit Card

This card by American Express also features multiple benefits such as free additional cards, access to special offers and reserved tickets, and travel coverage. Customers are offered the chance to make restaurant reservations and buy presale tickets for special events, including theatre performances and concerts. An added advantage is the fact that there are no travel and seat restrictions. The first $500 purchase earns 10,000 rewards points, and referring a friend earns additional $5,000 points. Each dollar in purchases is equal to 1.25 points.

  • Annual fee: none
  • Interest rate: 19.99 percent
  • Funds advance fee: 22.99 percent

Best Canadian Cashback Cards

Scotia Momentum® Visa Infinite Card

Offered by the Bank of Nova Scotia, this cashback card features a special offer so that customers earn 10 percent back on all purchases made during the first three months. Each dollar spent at grocery and drug stores earns 4 percent and at gas stations – 2 percent.  Other benefits worth mentioning include concierge services, access to dining experiences and premier events, wine purchase discounts, complimentary wine tastings, and more.

  • Annual fee:  $99
  • Cash advance rate: 22.99 percent
  • Purchase rate: 19.99 percent
  • Credit limit: 5,000 or higher
  • 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 on April 30, 2020

Meridian Visa Infinite Cash Back Card

Also a great credit card to earn money on purchases, Meridian Visa Infinite features 10 percent cash back on items charged during the first 3 months. Utility bills and pharmacy purchases earn 2 percent, grocery and gas earn 4 percent, and all other purchases – 1 percent. Rewards can be redeemed in the form of gift cards, account credit, events tickets, and merchandise. The card also comes with a comprehensive insurance package, including travel assistance, baggage insurance, and emergency health care coverage.

  • Annual fee: $99
  • Purchase rate: 19.50 percent
  • Cash advance rate: 21.99 percent

Best Rewards Credit Cards

American Express Cobalt

Also a good choice to earn rewards points, this card by American Express comes with a low interest rate and a welcome bonus of 30,000 points for purchases worth $500 made on a monthly basis. Each dollar spent in cafes, bars, and restaurants earns 5 rewards points. Supplementary cards are offered at no additional cost. Customers enjoy multiple benefits, including shopping deals, weekend gateway experiences, advance movie screenings, reserved tickets, and presale tickets for major events.

  • Monthly fee: $10
  • Interest rate: 19.99 percent
  • Funds advance rate: 22.99 percent

BMO World Elite MasterCard

The Bank of Montreal also offers a rewards card with shopping and travel benefits, an annual fee waiver during the first year, and a welcome bonus of 35,000 points. One dollar spent on everyday purchases earns 2 points, and $1 on entertainment, restaurant, and travel purchases earns 3 points. Customers also benefit from access to vacation packages, cruises, car rentals, and other travel benefits.

  • Annual fee: $150
  • Cash advance rate: 22.99 percent
  • Purchase rate: 19.99 percent
  • Annual income requirement: $150,000 for households; $80,000 for individuals

Best Credit Cards with Travel Insurance Coverage

Scotiabank Platinum American Express

Customers who need a card with comprehensive travel coverage may check this card by Scotiabank, which also features an attractive rewards scheme. Travel coverage includes travel accident, travel emergency medical, flight delay, lost and delayed baggage, and other types of insurance. Cardholders also earn 1 point per dollar on everyday purchases and 4 points per dollar on entertainment, gas, dining, and grocery purchases. The list of added benefits includes concierge services, access to special offers, experiential tours, culinary experiences, and Hertz #1 Club Gold membership.

  • Annual fee: $399
  • Cash advance rate: 22.99
  • Interest rate: 19.99 percent
  • Minimum credit limit: $10,000

Desjardins Odyssey Visa Infinite Privilege

This Visa card also comes with a comprehensive insurance package, including travel, common carrier accident, emergency health care, trip interruption or cancellation, and baggage insurance. The card also offers 2 percent cash back on purchases and features wine and food experiences, concierge services, and hotel and travel benefits. Customers enjoy exclusive travel benefits such as airport parking discounts, security fast track lanes, and Priority Pass membership. Hotel benefits include beverage and food credit, complimentary daily breakfast, and automatic room upgrades based on availability.

  • Annual fee: $295 for members; $395 for non-members
  • Interest rate: 9 percent
  • Minimum annual combined or individual income: $200,000

Best Student Credit Cards

BMO SPC® CashBack® Student MasterCard®

This credit card by the Bank of Montreal is especially designed for students and features discounts on food, dining, clothing, beauty, and other items. Cardholders are offered 5 percent cash back on purchases during the first three months and 1 percent after the promotional period. Students also benefit from access to sports events, premiers, and concerts, exclusive deals, and add-ons such as BMO Roadside Assistance and Credit Alert. A signature or reference letter from parents is not required.

  • Annual fee: none
  • Standard interest rate: 19.99 percent
  • Cash advances: 22.99 percent

Scotiabank Scene Visa Card

Scotiabank also offers a student card that is suitable for young people with no credit history. The card features a rewards program that offers customers the chance to earn 5 points per dollar on Cineplex purchases and 1 point on everyday purchases. Scotiabank offers multiple benefits such as discounts on car rentals, supplementary cards, and optional protection in case of critical illness, lockout or strike, job loss, disability, etc.

  • Annual fee: none
  • Cash advance rate: 22.99 percent
  • Standard rate: 19.99 percent
  • Minimum credit limit: $500

Best Secured Credit Cards and Credit Cards for Bad Credit

Home Trust Secured No Annual Fee Visa

This card is a good option for borrowers with tarnished credit and requires a security deposit as a guarantee of repayment. The minimum deposit is $500 and the maximum deposit – $10,000. Customers can use the card to book vacations and make online or in-store purchases. Cash can be accessed at ATMs with the Plus and Visa logo. The approval rate is quite high (over 95 percent), which makes this secured card a good choice for customers who seek to reestablish credit.

  • Annual fee: none
  • Purchase interest rate: 19.99 percent

OR

  • Annual fee: $59
  • Purchase interest rate: 14.99 percent

Refresh Secured Visa

This secured card helps customers build credit and comes with beneficial features such as low security deposit, easy approval, and free financial resources and education. Cardholders are offered free courses on different topics, including finances, money, how to set financial goals, and how to improve credit.

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

Scotiabank Value® No-Fee Visa Card

This card is a good choice for newcomers to Canada and persons with no credit history. Scotiabank offers the option to transfer balances, and customers benefit from a low 3.99 percent introductory rate during the first 6 months. Additional benefits for cardholders include car rental discounts and Visa Checkout.

  • Annual fee: none
  • Purchase rate: 16.99 percent
  • Balance transfers and cash advances: 16.99 percent
  • Minimum credit limit: $500

Best Balance Transfer Credit Cards

MBNA True Line MasterCard

This MasterCard by MNBA comes with a zero promotional rate on balance transfers during the first 10 months, allowing customers to transfer high-interest balances. There are many benefits for cardholders, among which legal assistance, pre-trip information, and lost ticket and lost card replacement. Up to nine authorized users can be added free of charge.

  • Annual fee: none
  • Cash advance rate: 24.99 percent
  • Purchase rate: 12.99 percent

President’s Choice Financial® MasterCard®

Another option by President’s Choice Financial, this card comes with a very low balance transfer rate of 0.97 percent during the first 6 months. Customers also earn 3 cents per litre at Mobil and Esso gas stations, 25 points per dollar at Shoppers Drug Mart, 20 points per dollar at PC Travel, and 10 points on all other purchases. Added benefits for cardholders are emergency cash advances, free extended warranty, and the option to request up to 4 additional cards at no added cost.

  • Annual fee: none
  • Purchase rate: 19.97 percent
  • Cash advances: 22.97 percent

Best Store Credit Cards

Triangle™ World Elite MasterCard®

This card by Canadian Tire allows holders to earn 3 percent on grocery purchases, 5 – 7 cent per litre at Husky and Gas+ stations, and 4 percent in CT money.  Customers also enjoy perks such as concierge services, personalized offers, roadside assistance, and access to exclusive events.

  • Annual fee: none
  • Purchase rate: 19.99 percent
  • Cash advances: 22.99 percent
  • Minimum annual income: $80,000

Capital One® MasterCard

This card is offered to Costco members and features 1 percent cash back on regular purchases, 2 percent on gas, and 3 percent on dining. The array of everyday and travel benefits includes travel assistance, baggage delay and common carrier travel accident insurance, and price protection.

  • Annual fee: none
  • Interest rate: 19.75 percent

There are plenty of great credit cards that offer money back, rewards points, comprehensive insurance coverage, low interest rate balance transfers, and other incentives. Financial institutions offer cards to customers with different credit scores, including secured cards to help build credit and take advantage of a wealth of attractive offers.

 

Canadian Guide to Credit Cards for Bad Credit

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Some people will tell you (mistakenly) that the best way to fix your poor credit is to cut up every card you’ve ever owned, and to avoid them like the plague thereafter. Folks who offer this advice mean well, but they’re dead wrong. The best way to beat your bad credit is actually the intentional use of a “bad credit” credit card.

Even if it was card usage that got your score into trouble, a credit card for bad credit can be your redeemer. And even if this approach seems counter-intuitive, the best way to repair your credit is still to get a credit card.

You need the right kind of credit cards for bad credit, and you need to use them the right way—so keep reading to find out how!

Credit Cards for Bad Credit

Let’s face it: life without a credit card is nearly impossible these days. There are plenty of places that won’t even take cash, and a lot more places that won’t touch a check. If you’re without a card, what are you supposed to do?

Cards are required for online shopping, making reservations, paying some bills, and sometimes even collecting a paycheck. If you’ve been told to get rid of all your cards, you’re probably in a state of near panic at the prospect!

But here’s the thing. Your credit score is determined by your ongoing activity in the financial world, and inactivity can be just as detrimental as “negative” activity! Did you know that?

You may have figured you’d just hunker down, pay cash for everything, and “wait out” the negative hits to your credit score. However, if you are not actively engaging in positive, credit-building financial activities, your score will just keep sinking.

What you need, then, is a way to reverse the unhealthy momentum of your sinking score. You need credit card transactions that are foolproof. (No, you’re not being called a fool. But you need assurance that neither mistakes nor circumstances will unintentionally dent your credit any further. And that’s where the “bad credit” credit cards come in.)

You may imagine that it’s going to be difficult to qualify for a card, since applications are often denied in cases of poor credit history. That’s why some of the bad credit cards are so well suited to your situation; they are secured in various ways to make them easy to get, regardless of your credit score.

Types of Credit Cards for People with Bad Credit

Credit cards for bad credit in Canada come in several different types, with varying benefits and usage possibilities. Here’s a breakdown of the possibilities so you can see what best suits your situation.

Secured credit cards.

If you’re familiar with secured loans, you know that they backed by collateral—something of value that the lender can repossess if you don’t make your payments. That’s how a home mortgage works, for example, with the house being the collateral that secures the loan.

A secured credit card (sometimes also called a guaranteed credit card) operates on the same principle. When you open the account, you make a deposit up front that acts as collateral on your line of credit. If you deposit five hundred dollars, you have a limit of $500. The card company doesn’t take a risk in letting you use their card (up to that limit), so they don’t mind issuing you a card.

You might wonder why this is beneficial, since it’s really your own money you’re borrowing against when you use this card. Well, the benefit comes in the transactions you make, which show up as “credit card use” on your report. Suppose you pay your power bill and buy gas with your card; your credit history now incorporates those transactions, and your payment on the credit card bill. If you had kept that $500 and paid for power and gas with cash, those payments would have not helped your score at all.

Low interest credit cards.

It may be more difficult to get a low interest card, but if you do qualify, it’s a good one to have. If you find yourself carrying a balance on your card, you want to be paying as little interest as possible on that balance while you work on improving your credit score.

It should be noted here that carrying a balance on your card does not negatively impact your credit score. So long as you pay the minimum (and pay on time!) carrying a balance can actually boost your score. (That’s not too mysterious when you think that your credit score is essentially a measurement of your desirability as a money-borrower; a person who pays interest is a desirable borrower from their perspective.)

If you can qualify for a low interest credit card, look for cards with introductory offers. Some cards will not charge any interest for the first few months, or even a year, after you open the account. (After that point they’ll charge interest on the entire remaining balance, so you should be careful and keep the “deadline” in mind. But that grace period can actually enable you to use the time to pay off your debt.)

Some of these cards will also allow you to transfer your balance from other cards with higher interest, consolidating your debts under the lower interest rate.

Prepaid credit cards.

A prepaid card operates very much like a debit card for a checking account, but without the actual bank account. You purchase the card and “load” it with whatever amount of money you choose, and then you can use the card exactly like a debit card, drawing on the funds you have already loaded.

This approach has all the benefits of a secured card, but with more flexibility. You can determine how much you want to load, usually without required minimums or maximums. You can reload any time you have money, rather than being held to the monthly credit-limit amount of a secured card (like the $500 example used above).  You can even have an employer make direct deposits of your paycheck onto the card, just as if it were a checking account.

Store credit cards.

Sometimes a large retail store will approve card applications from folks with less-than-stellar credit, because they want to tempt you into their store with the rewards associated with the card. Once you have been approved, that card can be used in any venue, not just the issuing store. And because they’re less picky than stand-alone card companies, you have a better shot at getting one. It may have a low credit limit, but it gives you a tool for rebuilding your credit score.

Rebuilding Your Credit with a “Bad Credit” Credit Card

Now you’ve seen the different types of cards and their different options. The other important piece of the plan is how to use a “bad credit” credit card in Canada in order to improve your credit score.

The critical component of card use is understanding what types of transactions boost your score (and doing those things!) as well as what types of transactions will hurt your credit score (and avoiding those!).

On-Time Payment (Preferably in Full)

This is the number-one way to boost your credit rating! And it’s a very black-and-white issue; even if your payment is one day late, it goes down as a late payment. A payment that’s three days late will look just as bad as a payment that’s three weeks late (though admittedly, not as bad as one that’s three months late).

The way your credit gets measured, payments are broken down into categories. The “good” category is payments that are made on time or ahead of time. The “bad” categories break down your late payments by how many months they’re late—for example, if a late payment is more than 30 or 60 days past due when it gets paid.

Keep in mind, too, that these payment timelines get more or less etched in stone on your credit report. If you were five days late on your card payment when you paid it, it will go down as a late payment. So make it a habit to pay your monthly bill a little ahead of time every month.

Pretend it’s a Debit Card

This will be easy to do if you have a prepaid card, because those work exactly like debit cards. The idea here is that you only spend money you actually have, rather than assuming you’ll be able to pay the bill when it comes due, or (worse) using your credit without planning to pay the full balance.

Carrying a balance on your card (if you have a card that allows you to do so) will not, in and of itself, lower your credit score. The reason you want to avoid it, though, is that it’s a sign you don’t have a handle on your spending. First you’ll be carrying a balance, next thing you’ll be missing a payment. It’s just a step in the wrong direction now that you’re trying to manage your money better and raise your credit score.

Don’t Carry Too Many Credit Cards

Don’t go overboard and load up on too many cards. Even if you’ve found another easy-to-get credit card, you don’t want to have too much credit, because that can actually count against your score. Credit companies look at how many different “obligations” you have (in terms of loans and lines of credit) and weigh that when they consider whether you’re a good risk. If they think you’re already overextended, they’ll decide they have a lower chance of getting paid if you were to default or get behind on your payments.

Top Picks: Canadian Credit Cards for Bad Credit

When you’re shopping around for a “bad credit” card in Canada, the following four are the top picks for rebuilding your credit score:

  • Affirm Financial MasterCard: An unsecured credit card specifically designed for people with poor credit. Affirm updates your information at credit bureaus with every payment, so you can see your score improve more quickly than with other cards.
  • Peoples Trust Secured credit card: A secured card that allows a credit line equal to the entire collateral deposit you make (a minimum of $500 to start).
  • Home Trust Secured Visa: A secured credit card (minimum deposit of $500) with no annual fee.
  • No-Fee Scotiabank Value Visa Card: An unsecured credit card, relatively easy to get and no deposit needed.

In Conclusion… Bad Credit? Great Plan!

Hands down, the most solid game plan to rebuild your credit is the intentional, careful use of “bad credit” credit cards in Canada. Take your pick of the easy to get cards, and stick to your guns to use them in a way that will benefit your credit score.

If you track your spending so it doesn’t outstrip your income, use your cards as often as possible, and pay your bills on time (and preferably in full), your credit rating will climb in no time!