Best Credit Cards Canada

Kelly Dilworth

Kelly Dilworth

INCOME.ca Contributor. Former staff reporter at CreditCards.com. Lives in Toronto, Canada.

If you’re in the market for a brand-new card, now’s a great time to shop around. Many of the best Canadian credit cards are luring new customers with lucrative welcome bonuses, competitive terms and other useful perks.

Not all credit cards are a good value, so it’s smart to compare offers. You’ll also want to think about what you’re looking for in a credit card. 

The best card for you will depend on your spending and credit habits, monthly budget, current debt levels and future plans. To help you narrow down your options, we’ve broken down the most common types of credit cards available to Canadians.

How to Compare Credit Cards

Before you start comparing offers, first ask yourself what you want and need in a credit card.

Are you looking for a simple, low commitment cash back card to use for everyday expenses? A TD Canada Trust credit card that offers extra cashback on gas and groceries may be a good fit.

Or, are you looking for help fund your next vacation? In that case, an annual fee travel card, such as the American Express Cobalt Card, could help catapult you toward a free flight or hotel stay.

A store credit card, such as a Canadian Tire credit card or a Best Buy credit card, could be the right choice for you if you’re looking to shave the cost of household purchases.

No matter what kind of card you’re looking for, you have plenty of options. There’s a card for every type of applicant, including new Canadians, college students, parents with large families, borrowers with bad credit, rewards enthusiasts and intrepid travellers. You can even get a card for shopping south of the border.

What are the Best Credit Cards in Canada?

It depends on who’s looking. Although many objective factors go into a quality credit card, such as a healthy rewards rate and a low annual percentage rate (APR), there are also subjective factors that will colour your experience.

For example, if you prefer to keep things simple, you may not be happy with a card that comes with a complicated rewards program, even if that card offers the most generous rewards.

With that said, there are common things to look for when comparing new cards.

If you’re shopping for a rewards card, for example, you’ll want to look for a high point, cashback or air miles rate, a solid welcome offer and a user-friendly rewards program. Or, if you plan to carry a balance, you’ll want to look for a low APR and affordable fees or a lengthy 0% APR offer.

Also, look at any other charges you might incur. The last thing you want is to pick a flashy air miles card and then get hit with unaffordable costs.

Best Travel Credit Cards Canada

Travel credit cards are designed for cardholders dreaming of paying for a vacation with their rewards.  With an air miles credit card, for example, you’ll earn miles you can use to pay for a free flight. Many travel cards also offer bonus points on both travel purchases and everyday spending.

When comparing travel cards, look for a high rewards rate, ample welcome bonus and substantial point value. If possible, also look at how difficult it is to redeem your travel miles. Some cards make it easier than others to use the points you’ve earned.

Pros

You can use your rewards to pay for all or part of a vacation.

Rewards are often more generous than what you’ll see on other cards.

Your card may also offer exceptional benefits, such as travel insurance.

Cons

Interest rates tend to be higher on travel cards.

Many travel cards also charge a high annual fee.

You may need a greater household income to qualify.

Popular Travel Reward Credit Cards in Canada

TD Aeroplan Visa Infinite Card

BMO World Elite Mastercard

CIBC Aventura Visa card

Best Credit Cards for Bad Credit Canada

For cardholders who are rebuilding their credit, cards for bad credit can be an essential lifeline. They will help you restore your payment history so lenders can trust you’ll pay your bills on time. By helping you rebuild your credit score, they can also help you qualify for better loans in the future.

When you’re comparing credit builder cards, look at the card’s APR, annual fee, and whether it requires a security deposit. Unsecured credit cards, such as the Guaranteed Credit Card from Capital One, don’t need one. If you don’t qualify for one, you may be given a secured credit card. Some instant approval credit cards, such as select retail cards, are also easier to get approved for than other cards.

Pros

It will help you rebuild your credit.

It gives you access to a card when you need it.

It provides a safer, more affordable way to borrow than riskier options, such as payday loans.

Cons

Rates and fees are higher.

Your credit limit will be relatively low.

You may need to put down a refundable security deposit to get approved.

Popular Credit Cards for Bad Credit in Canada

PC Mastercard

Canadian Tire Triangle Mastercard

Capital One Canada Guaranteed Mastercard

Best Student Credit Cards Canada

Student credit cards help first-time borrowers build a positive credit history and practice managing credit. Establishing a good credit score early in life can also help students secure a more affordable mortgage or car loan down the line.

When searching for a student credit card, pay special attention to interest rates and fees. Since students typically have less disposable income, they need to be able to afford their credit cards.

Pros

A student credit card can help a first-time borrower build a positive credit history.

A student card with a low credit limit could also help first-time borrowers learn to manage debt before being trusted with more credit.

A student card can help pay for books, educational supplies, transportation and other life essentials.

Cons

Even with a low credit limit, a student card can be dangerously expensive if a student mismanages it.

Common mistakes, such as paying a bill late or maxing out a credit card, can haunt a student’s credit score for years.

A student may receive a higher APR or annual fee in exchange for access to a card.

Popular Student Credit Cards

TD Student Credit Card

CIBC Dividend Visa Card for Students

RBC Student Credit Card

Best Balance Transfer Credit Cards Canada

Best Balance Transfer Credit Cards Canada

Balance transfer cards are for cardholders who carry credit card debt. They offer a promotional 0% or low APR (typically below 3%) for a temporary period. That way, cardholders can get out of debt sooner.

When comparing balance transfer cards, check the promotional APR and how long the promotion lasts. The best balance transfer cards give you at least six months to a year to pay down your balance at a lower rate. Also, look at the card’s balance transfer fee, which can add a substantial charge to your final balance.

Pros

A balance transfer card can help you slash debt more quickly by lowering or eliminating your interest payments.

A balance transfer card can also give you some breathing room if you need to reduce your payments temporarily.

A balance transfer card can help you spread out the cost of a big purchase at an affordable rate.

Cons

Balance transfer cards typically charge significant fees, which can add hundreds of dollars to your balance.

Most balance transfer cards in Canada have relatively short promotions. You may only have six months, for example, to clear your debt before the card’s standard rate kicks in.

Most Canadian balance transfer cards charges interest. Only a few charges no interest at all.

Popular Balance Transfer Cards

MBNA True Line Mastercard

Scotiabank Value Visa

American Express Essential Credit Card

Best No Fee Credit Card Canada

No annual fee credit cards are for consumers who want to enjoy a credit card without having to commit to a yearly fee. The rewards are often less generous than what you’ll see on annual fee rewards cards. Also, the APRs may be higher.

When comparing no-annual-fee credit cards, don’t forget to look at interest rates and other charges. Also, look at the card’s rewards rate for all purchases, not just bonuses. A card may offer 1% cashback on groceries and gas, for example, but only .05% on other purchases.

Pros

They’re more affordable upfront.

They don’t require any kind of financial commitment, and so you can keep them open as long as you want.

Many offer decent rewards for everyday spending.

Cons

Their rewards programs are less generous than what you’ll find on annual fee cards.

They may also charge higher APRs.

They may not offer as many side benefits as annual fee cards.

Popular No Annual Fee Credit Cards

Tangerine World Mastercard

Home Trust Preferred Visa

Rogers World Elite Mastercard

Best Business Credit Cards Canada

You can use a small business credit card to fund your company expenses. And, you can make employees authorized users and use the cards to monitor their corporate spending.

When comparing business cards, pay special attention to the cards’ APRs and fees. You want to make sure you can afford to carry a balance if your business runs into cash flow problems.

Also, look at the types of rewards programs a card offers. If you’re a busy entrepreneur, you may prefer a card with more straightforward rewards. But if you or your employees regularly travel for business, you could enjoy a healthy return if you opt for a business travel rewards credit card.

Pros

A business credit card can help you track company spending and better manage your cash flow.

It can also help you make significant and timely investments for your business.

Giving business credit cards to your employees can help you keep tabs on their spending.

With hefty business expenses, you could earn significant rewards.

Cons

You may be charged a higher APR or annual fee.

Your personal credit score could take a hit if your business fails to make a payment.

You’ll typically need good credit to qualify.

Popular Business Credit Cards

TD Business Cash Back Visa Card

RBC Rewards Visa Business Platinum Credit Card

BMO Air Miles No-Fee Business Mastercard

Best Low-Interest Credit Cards Canada

A low-interest credit card is for people who need to carry balances on their credit cards. A low-interest credit card can also serve as a backup credit card. Even if you usually pay off your balances in full, it’s smart to carry a lower rate card in case you have an emergency expense.

When comparing low-interest credit cards, don’t just hone in on the APR. Also, look at the card’s annual fee. Most low-interest credit cards charge a significant price in exchange for a lower interest rate.

Also, check to see if the card offers any additional benefits, such as a balance transfer offer or other perks. Don’t expect to earn rewards with a truly low rate credit card. Most cards designed for consumers who carry balances are basic.

Pros

APRs are lower, so you’re less likely to accumulate uncontrollable debt.

Low rate cards are also functional backup credit cards, giving you the freedom to borrow at a lower rate when necessary.

Since low-interest cards are usually fairly basic, it’s less tempting to overspend on them.

Cons

Most low rate cards charge a significant annual fee.

They typically don’t offer a rewards program.

Despite a lower-than-average interest rate, finance charges are still relatively high.

Popular Low-Interest Credit Cards

RBC Rate Advantage Card

MBNA True Line Visa Gold card

American Express Essential Credit Card

Best Cash Back Credit Cards Canada

Cashback credit cards are among the most user-friendly rewards cards you can get. Designed for consumers who would rather earn money than points or travel miles, cashback cards award a certain percentage of every transaction that you make. For example, if you charge $1,000 to a 1% cashback card, you’ll get $10 in return.

If you have good to excellent credit, you could get even more cashback with every purchase. The highest cashback credit cards in Canada award anywhere from 1.5% to 2% cashback on every purchase or up to 5% cash back on select purchases. Some cashback cards even offer a temporary 10% cashback rate.

When comparing cashback cards, look at the cashback rate on the purchases you make most. For example, if you spend a lot on gas and groceries, you’ll earn more with a cashback card that rewards everyday purchases than a card that only awards bonuses on travel.

Pros

Cashback cards are much simpler to use and redeem than traditional, point-based credit cards.

Flat-rate cash back credit cards are low maintenance: You just need to use your credit card, and you’ll get a bonus on every purchase.

You can often get a significant amount of cashback on your biggest monthly purchases.

Cons

Cashback cards may not offer as many benefits as travel credit cards.

They’re also not as exciting: you may get more joy from travel rewards or gift cards.

Like all rewards cards, cashback cards tend to charge higher APRs. Most cashback cards also charge significant annual fees.

Popular Cash Back Credit Cards

Capital One Aspire Cash Mastercard

TD Cash Back Visa Infinite card

Tangerine Money-Back Credit Card

The Best Credit Cards for You Right Now?

Choose whichever card best fits your current situation. As your life progresses, you may find the cards you’re using are no longer a good fit. For example, if your health doesn’t let you travel much anymore, then a travel card isn’t your best option. But if you’re simply on temporary hiatus and hope to revisit your favourite vacation spot one day, then a travel card could still be best.

Over time, your needs will shift, and so, too, should your credit cards. When comparing credit cards, focus on the year ahead and what you want out of it. Do you want to trim debt this year, build a better credit score or get discounts on everyday living expenses? Or are you focused on earning free flights?

Your answers will help determine which cards deserve a closer look. Also, be sure to keep an eye out for new promotions. Card issuers are always trying to win over new applicants by advertising generous promotions.

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