Best Low Interest Credit Cards

October 21, 2020 | Editorial Team

Low-Interest Credit Cards

Many Canadians get credit cards for their everyday purchases. But, did you know a low-interest credit card can also be used to pay off debts, not just incur them? This low-interest credit card is sometimes known as a balance transfer credit card. Balance transfer credit cards/low-interest credit cards are typically used to pay off all of your high-interest debts.

You first use the low-interest credit card to pay all your debts that have a higher interest rate than the credit card does. Then, you will only be left with one simple credit card bill to pay. As the balance transfer credit card will have a low-interest rate, it will be much easier and quicker to pay off.

Low-interest credit cards can also still be used just like a normal credit card. This means you can use it for your outings or online shopping. Just make sure you are paying your monthly payments to avoid incurring more debt.

Many low-interest credit cards also have benefits such as discounts on car rentals and travel insurance. If all of this sounds enticing to you, take a look at our list below of the best low-interest credit cards in Canada!

MBNA True Line Gold Mastercard Credit Card

If you have never heard of MBNA before, they are a division of TD Bank. MBNA provides co-branded and affinity credit card programs across Canada. The credit card that we are going to discuss first is from MBNA and is called the True Line Gold Mastercard.

MBNA’s True Line Gold Mastercard is a balance transfer, low-interest credit card. This balance transfer/low-interest credit card is a great choice for consolidating your debts. It has a low-interest rate of 8.99% and a low annual fee of only $39. Let’s take a look at some more of the pros and cons of MBNA’s True Line Gold Mastercard.

Pros

  • This credit card offers a low annual fee of $39.
  • The interest rate is also low at 8.99% to pay off your debts quicker.
  • For the first six months, balance transfers have a 0% interest rate.
  • Nine users can be added to your account with no additional annual fee needed.
  • Trip assistance travel insurance is available from Allianz. This includes lost document/ ticket replacement, lost luggage assistance, legal assistance, and pre-trip information.
  • You are able to obtain cash advances with this card at banks and ATMs internationally.
  • If you buy something that has a warranty with this credit card, the warranty will be doubled.
  • If your purchase doesn’t include a warranty, MBNA will provide coverage for the first 90 days after your purchase.
  • You can get 5% to 10% off car rentals at participating Avis and Budget locations.
  • Eligibility is simple. You just need to be a Canadian citizen that is of the age of majority in your province or territory.
  • Customer service is available 24/7 over the phone or live chat.
  • The fraud protection MBNA provides is excellent.

Cons

  • Purchase assurance is capped at $60,000 in total for the lifetime of the card.
  • Cash advances have an interest rate of 24.99%.
  • There is a 3% fee for balance transfers with a minimum charge of $7.50.
  • Balance transfers need to be completed within 90 days of applying for the credit card.

Summary

If you are trying to pay off your debts, a credit card with an annual fee may put you off. But, MBNA’s Trueline Gold Mastercard only has a $39 annual fee. In the long run, you will be saving more than you’re spending on the annual fee. This is because you will get an interest rate of only 8.99% with this credit card. This will allow you to easily consolidate all your debts while still using the credit card normally.

MBNA also has great customer service and fraud protection, so you don’t need to worry about your money.

If you are looking for a credit card that you can use for cash advances, this may not be the one as the interest rate is 24.99%. If not, MBNA’s Trueline Gold Mastercard is a great low-interest credit card.

MBNA True Line Mastercard Credit Card

Another great low-interest credit card from MBNA is the True Line Mastercard. It is similar to its Gold counterpart in that it is a great card to use to make balance transfers. Getting this credit card will help you consolidate your debt. The main difference between the two cards is the True Line Mastercard has a higher interest rate at 12.99% (versus the 8.99% of the Gold card). In exchange, the True Line Mastercard has no annual fee.

If the annual fee was the thing putting you off from MBNA’s True Line Gold Mastercard, this low-interest credit card might be a better option for you. Here are some of the pros and cons of MBNA’s True Line Mastercard.

Pros

  • One of the main benefits of this low-interest card is that there is no annual fee to maintain it.
  • Although the interest rate is higher on this MBNA credit card compared to the Gold version, it is still only 12.99%.
  • You only need to be a Canadian citizen that is the age of majority in your province to be eligible for this low-interest credit card.
  • You can transfer the available credit from your credit card to your chequing account.
  • For the first ten months, balance transfers have a 0% interest rate.
  • Travel insurance is included with these credit cards.
  • Cash advances can be made internationally.
  • 5% to 10% can be saved at participating Avis and Budget locations in North America and abroad.
  • Excellent fraud protection and 24/7 customer service with MBNA.

Cons

  • There is a 24.99% interest rate on any cash advances made with this low-interest credit card.
  • 3% transaction fee for each balance transfer with a minimum fee of $7.50.
  • Any balance transfer needs to be completed within 90 days after applying for your low-interest credit card.

Summary

If you want to get a credit card with MBNA, but the annual fee of the Gold low-interest credit cards was too much, this True Line Mastercard is a great option. As this low-interest card has no annual fee, the interest rate is a little higher at 12.99%. So, it is important that you think about what you will end up spending more money on the annual fee or the interest rate.

You get similar benefits with each credit card as well as MBNA’s excellent customer service. So, both low-interest credit cards from MBNA are great options.

TD Emerald Flex Rate Visa Card

As MBNA is a division of TD Bank, discussing a TD, low-interest credit card seems like the best next step. TD’s Emerald Flex Rate Visa credit card is aptly named as it is a variable rate credit card. A variable-rate credit card is one that has an interest rate that changes.

The interest rates for the TD Emerald Flex Rate Visa credit card are based on your credit score. The higher your credit score, the lower your interest rate will be.

Pros

  • Interest rates tend to be low and range from 8.45% and 16.7% depending on your credit score.
  • You can easily qualify if you are a Canadian citizen and the age of majority in your province or territory.
  • Extended warranty and purchase protection on items you buy with this credit card.
  • Discounts of 5% to 10% on car rentals are available from participating Avis and Budget locations.
  • Online security is strong, and this credit card includes zero-liability coverage. So, even if there is fraud on your cards, you won’t have to pay for it.
  • Contactless payment is available by tapping your credit card, Apple Pay or Visa payWave.
  • Emergency cash advances up to $500 are available.

Cons

  • You need to pay an annual fee of $25.
  • This credit card doesn’t offer any rewards or cashback.
  • Thus, things like travel insurance can only be added on for a fee.
  • The variable rate interest rates can be confusing.
  • The lower your credit score, the higher your interest rate.

Summary

The TD Emerald Flex Rate Visa credit card is a good option for Canadians looking for a no-frills card. The annual fee and interest rates are low enough that you won’t end up spending more money to pay off your debts. But, there may not be any more benefits than that with this credit card. There are no rewards or extra benefits, such as travel insurance included.

So, this variable-rate credit card may simply be good for the short term to help you pay off the balance of your debt quicker.

CIBC Select Visa Card

Next on our list of low-interest credit cards is one from CIBC, the Select Visa Card. The interest rate is a bit higher at 13.99%, so it’s not our first choice of all the credit cards. Eligibility requirements are also tougher as your minimum household income must be $15,000. That being said, the CIBC Select Visa Card does have redeeming qualities. Notably, a welcome offer which we’ll look more into the pros and cons of this credit card.

Pros

  • For the first ten months, you can get 0% interest on your credit card balance. You just need to pay a 1% transfer fee.
  • Similarly, you can receive a first-year annual fee rebate.
  • The interest rate for cash advances is low at only 13.99%.
  • $100,000 of common carrier accident insurance which will protect you and your family while you travel.
  • Travel medical insurance can be added to your credit cards.
  • Discounts up to 25% are available at participating AVIS and Budget car rental locations.
  • You can get three additional credit cards with no extra fee on your account.
  • The application process is quick, as it can be done completely online. It shouldn’t take you less than five minutes.

Cons

  • Relatively high-interest rate (compared to the last few credit cards) of 13.99%.
  • The annual fee after the first year is rebated will be $29.
  • There are no perks, such as rewards available.

Summary

The CIBC Select Visa card has one of the highest interest rates of any of the credit cards we’ve discussed so far at 13.99%. That said, the higher interest rate may be worth it as this credit card has perks that other credit cards don’t. Notably, the welcome offer.

The higher interest rate will be cut down to 0% for the first ten months. This makes it one of the best credit cards for debt consolidation (or applicants with bad credit), as your balance won’t continue to go up. If you can pay off your balance in less than ten months, this is one of the best low-interest credit cards available for balance transfers/ debt consolidation.

BMO Preferred Rate Mastercard

Last on our list of low-interest credit cards is one from BMO, the Preferred Rate Mastercard. This is one of the more unique credit cards as the rate of interest they charge is up to you. You can either choose to pay an annual fee of $20 to receive a rate of 12.9%. Or, you can waive the annual fee and pay a rate of 17.5%.

Many choose to pay the annual fee as the point of these credit cards is to have a low rate of interest. There is also a welcome balance transfer promo that will lower your rate to 3.99% for the first nine months, saving you even more money. Here’s a closer look at the pros and cons of BMO’s Preferred Rate Mastercard.

Pros

  • The rate of interest is low at 12.99%, and that rate is lowered to 3.99% on balance transfers for the first nine months. In addition, there is only a 1% balance transfer fee.
  • BMO’s welcome offer includes waiving the first year of your annual fee.
  • Cash advances are available and enjoy the same rate of 12.99%.
  • These cards come with an extended warranty to double the manufacturer’s original warranty period.
  • Purchase protection is included to insure your purchases against theft or damage for up to 90 days.
  • Zero liability coverage ensures you are protected from fraudulent use on your cards.
  • BMO is one of the Big 5 Banks in Canada, so you know your balance is protected.
  • There is no income requirement for eligibility.
  • Cardholders can enjoy 15% off at various shows in Canada as well as 20% off resident shows in Las Vegas.

Cons

  • The extended warranty is only available for an additional year.
  • The welcome bonus rate of 3.99% is only for balance transfers, not new purchases.
  • Extra security features such as BMO’s InfoProtector 360 and Credit Alert are add-ons with a fee.

Summary

BMO’s Preferred Rate Mastercard is a good short-term option. Their nine-month welcome offer of a 3.99% rate will help you pay off your debts quicker. But, after the nine months is up, 12.99% is higher than some of the other cards we discussed.

Not many benefits or rewards come with using this credit card either. Safety features cost extra, and there is no travel insurance available. There is, however, extended warranty and purchase protection.

If you like banking with a well-known bank, BMO’s Preferred Rate Mastercard is a good option. Otherwise, other banks may have better options for you.

The Bottom Line

Low-interest credit cards are perfect for people with pre-existing debt from other credit cards. So, if your credit cards have no balance to pay off, you may not benefit from low-interest credit cards. This is because to offer a lower interest rate, banks won’t offer as many incentives with these types of credit cards.

If you do, however, have a balance on other credit cards you want to consolidate, credit cards with a lower interest rate are a great option. Looking for credit cards with an interest rate that is low and has little to no balance transfer fees is a good place to start.

All of the credit cards from MBNA, TD, CIBC, and BMO that we mentioned are great credit cards that offer a low rate of interest. They also make balance transfers super easy. For more information about any of the cards, look for the ‘contact us’ section on the respective bank’s website.