Best Credit Cards in Canada

Today, cyberspace is where financial decisions about your credit worthiness are made. The days of having a heart to heart talk in the local branch of your bank have just about been eliminated.

The best credit card in Canada depends on many factors such as if you want to accumulate travel miles or get discounts on 5 diamond hotel rooms. If you are a traveler and want to accumulate points towards travel, or if you’re an avid sports enthusiast looking to get discounts on the best gear, it can be done with the best credit card for what you want.

You can make a purchase and receive a cash reward that you can later use to pay down your outstanding balance or towards a future purchase.  The best credit card in Canada depends on how you use your credit card.

Some card holders will use their credit card to purchase everything they need and make one payment at the end of the billing cycle, while others only use a credit card to pay for trips then maybe use a debit card for local purchases such as food or to pay bills

The best credit card in Canada allows you to use your credit cards anywhere in the world. Gone are the days or credit cards that are useless outside of you country or for that matter outside of your province. In many ways, a credit card is what determines your financial identity. With the best credit card in Canada, you have access to many things. You have access to a line of credit which tells the financial world something about who you are. The access is usually based on your credit history. How long you established credit either online or with a secured loan like car loan or major home improvement loan. Your credit history becomes your financial fingerprint.

Credit card companies work with credit rating companies to determine your ‘credit worthiness’ then assign you a credit score or credit rating. Although you might have the same credit card as someone else, your credit rating could be different. That variance in credit rating makes a huge difference in the interest rate you pay (APR-Annual Percentage Rate) to have that card.

The credit card you qualify for uses a credit score to determine the APR you will pay on the unpaid balance. Unless you have a portfolio with solid investments plus a long history of good credit your APR will most likely be high. The APR you receive will be based on your ability to pay your bills on time. Credit rating companies determine your ‘creditworthiness’. So when you consider the key indicators that determine the best credit card in Canada, your credit score will impact what credit cards you are eligible to qualify for.

For starters look for a credit card that fits your lifestyle and spending habits. If you have a very active spending history and you prefer to buy on credit for the convenience and pay your bill monthly, you might want to consider a rewards card with a low to mid interest rate.

A Debit Card is Not A Credit Card

To clarify, a debit card does not meet the criteria as a credit card. A debit card will be linked to your checking account or savings account. A debit card is assess to you cash. You do not take any unsecured debt. This card looks exactly like a credit card however with every purchase a direct cash withdrawal comes from your account at the time of purchase. Many people with great credit ratings use a debit card these days more than they did even 5 years ago. With a debit card you do not incur any unsecured debt. Part of financial solvency is to not have any unsecured debt. With this card you only spend what you have. This cards follows the financial words of wisdom, buy things that appreciate and stay away from things the incur debt.

Secured Credit Card

This credit card requires you to deposit a pre-determined amount of money in an account separate from your savings or checking account. This an excellent card if you are rebuilding credit or just starting out. This card will carry the balance forward until the next billing cycle when the balance is due. If you want to raise your credit limit you have to request that from the financial institution, then deposit the additional money with the financial institution. Some institutions have a pre-determined line of credit and will not consider changing the credit limit. This card might be a great credit card for a person with a bad credit history who is rebuilding their credit. It is also a card some people new to the credit world might consider because they may not have a credit history in order to qualify for an unsecured credit card. They usually carry the highest annual fee of all the credit cards. If you are successful with this card, the lending institution will refund your deposit and offer you an unsecured card in most cases. If you want to have the added support of a preset limit on your credit, this might be a great credit card to consider.

Rewards Credit Card

If you enjoy the benefits of rewards related to travel such as free gas, store credits towards a major purchase and so forth, this might be the card with the best benefits for you. The rewards card earns points which can be redeemed later for hotel stays, flights, rental car upgrades, major appliance purchases and similar rewards. There are some restrictions. A cardholder with a travel rewards card might be required to book all rewards related items through the institution’s website or specified contact agency. The rewards may only apply to specific companies or airlines. In addition, there may be what’s considered ‘black out’ times when the offer is not available. Some offer travel insurance so before you settle on  a specific cash-back credit card with a rewards plan ask questions about the plan.

Some questions to consider about the best credit card in Canada for you:

  • Are there blackout periods of the year?
    • Can the rewards be combined with rewards for a second credit card?
    • Do you want travel, retail, or online rewards?
    • Is every dollar in purchases equals the value of one dollar?
    • Is there a cash equivalent redemption and if so, what is the amount?
    • What companies, retailers and airlines participate in the plan?

No-Fee Credit Cards

Most credit cards require the cardholder to pay an annual fee for the privilege or having the credit card. On average the fee ranges around CAD 99 – CAD120. A no-fee card does not carry an annual fee. This might be the fit for a person who is more sedentary, who does not use the card often but needs to keep a credit card. Great to use to make online purchases. The downside of course is there might be just a few rewards or a longer time to accumulate points, if it is associated with a rewards program.

Business Credit Cards

This credit card usually has a higher credit limit. With the higher limit the cardholder has more purchasing power to scale their business as well as track all the business related expenses in one place. The nice aspect of the business credit card includes the ability to focus the type of card where it best fits your business needs. If you travel often or need purchasing power the rewards can be focused to where they will better help your company.

Student Credit Cards

This card offers an excellent way to establish a credit history. Different from a secured card because you do not have to deposit any money into a secured account. Generally, these cards come with a low or no annual fee. The student credit card will help build credit and also develop healthy credit habits like paying the entire balance due instead of the minimum when possible.

Other cards that deserve honorable mention include cash back, low interest rate, balance transfer and store credit cards. This partial list that can help you learn more about the best credit card in Canada for you.

Lending Organization Accreditation BBB rating Credit Cards Customer Reviews
      YES Since 22/12/1993 A+ https://www.cwbank.com/en/business/credit-cards   None
YES Since 27/2/2013 A+ https://www.peoplestrust.com/en/peoples-card-services/   https://www.bbb.org/ca/bc/vancouver/profile/credit-cards-and-plans/peoples-card-services-0037-1242602/customer-reviews  
YES Since 28/2/1986 A+ https://www.vancity.com/CreditCards/?xcid=pers_megamenu_CreditCards   https://www.bbb.org/ca/bc/vancouver/profile/credit-union/vancity-savings-credit-union-0037-111721/customer-reviews  
Teligence.net     NO A+ https://www.teligence.net/   None
      The customer reviews are listed to illustrate that although a credit card may have an A+ rating, customer satisfaction might me the opposite.  

The Canadian Better Business Bureau  https://www.bbb.org/ which has three main reference sites; Canada, Mexico and the United States is an excellent objective resource that will help you to make an informed decision about the best credit card in Canada. Here you can read about the various programs, cards offered by lending institutions and read customer reviews. Whatever you decide to do, make sure you get what you want with the terms that will fit your budget and lifestyle.

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