Are you in the market for a new credit card in Canada? With so many options available, deciding the best fit for you can be overwhelming. From rewards programs to interest rates, there are many factors to consider.
But don’t worry; I’ve researched for you! In this article, I’ll break down the top credit cards in Canada and help you choose the one that will give you the most benefits for your spending habits.
So please sit back, relax, and let’s find the perfect credit card for you.
What Kind of Credit Cards are Available in Canada?
In Canada, credit cards can be classified into several categories based on their features and rewards programs. Here are the most common types of credit cards in Canada:
Travel credit cards: These cards are designed for frequent travellers and offer rewards such as airline miles, hotel points, and other travel-related benefits like travel insurance, airport lounge access, and more.
Cashback credit cards: These cards offer a percentage of cashback on every purchase made with the card. The cashback rewards can be redeemed as statement credits, deposited directly into a bank account, or used to purchase merchandise or gift cards.
Low-interest credit cards: These offer a lower interest rate on purchases and balance transfers, making them a good option for people who carry a balance on their credit card from month to month.
Rewards credit cards: These cards offer points or miles for every purchase made with the card, which can be redeemed for merchandise, gift cards, or other rewards.
Balance transfer credit cards: These allow you to transfer high-interest balances from other credit cards onto the new card, often with a low or 0% introductory interest rate for a set period.
Student credit cards: These cards are designed for students with lower credit limits and no annual fees. They may offer cashback rewards or other benefits tailored to students’ needs, such as discounts on textbooks or travel.
Secured credit cards: These cards require a deposit as collateral for the credit limit. They can be a good option for people with a limited credit history or poor credit scores, as they can help build credit over time.
Your right credit card will depend on your spending habits, lifestyle, and financial goals. Therefore, it’s essential to compare the features and benefits of different credit cards before choosing the one that’s right for you.
What are the best credit cards in Canada?
Travel credit cards
The best travel credit card depends on your travel needs and spending habits. Some popular options in Canada include the American Express Gold Rewards Card, TD Aeroplan Visa Infinite Card, and the Scotiabank Gold American Express Card. These cards typically offer rewards such as airline miles, hotel points, and travel-related benefits such as travel insurance, airport lounge access, and more.
Cashback credit cards
Some popular cashback credit cards in Canada include the Tangerine Money-Back Credit Card, the SimplyCash Preferred Card from American Express, and the Scotia Momentum Visa Infinite Card. These cards offer a percentage of cashback on every purchase made with the card, which can be redeemed for statement credits or used to purchase merchandise or gift cards.
Low-interest credit cards
The MBNA True Line Gold Mastercard and the Scotiabank Value Visa are popular low-interest credit cards in Canada. These cards offer a lower interest rate on purchases and balance transfers, making them a good option for people who carry a balance on their credit card from month to month.
Rewards credit cards
Some popular rewards credit cards in Canada include the BMO World Elite Mastercard, the TD Rewards Visa Card, and the Scotiabank Passport Visa Infinite Card. These cards offer points or miles for every purchase made with the card, which can be redeemed for merchandise, gift cards, or other rewards.
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 a ‘black out’ time when the offer is unavailable. 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 rewards 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 to travel, retail, or online rewards?
- Is every dollar in purchases equal 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?
Balance transfer credit cards
The MBNA Platinum Plus Mastercard is a popular balance transfer credit card in Canada. This card allows you to transfer high-interest balances from other credit cards onto the new card, often with a 0% introductory interest rate for a set period.
Student credit cards
Some popular student credit cards in Canada include the BMO SPC CashBack Mastercard and the Scotiabank Scene Visa Card. These cards offer cashback rewards or other benefits tailored to students’ needs, such as discounts on textbooks or travel.
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 develop healthy habits like paying the balance due instead of the minimum when possible.
Secured credit cards
The Home Trust Secured Visa Card and the Capital One Guaranteed Mastercard are popular secured credit cards in Canada. These cards require a deposit that serves as collateral for the credit limit and can help build credit over time.
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 must 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 to qualify for an unsecured credit card. They usually carry the highest annual fee of all the credit cards. If you successfully use this card, the lending institution will refund your deposit and offer you an unsecured card in most cases. If you want the added support of a preset limit on your credit, this might be a great credit card to consider.
No-Fee Credit Cards
Most credit cards require the cardholder to pay an annual fee for 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 fit a more passive person who does not use the card often but needs to keep a credit card. Great to use to make online purchases. The downside is that 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 and 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 on where they will better help your company.
Store Credit Cards
Store credit cards are a type of credit card that is issued by specific retailers or store chains. Most of the time, these cards can be used to make purchases anywhere, but at the issuing store or chain, they often offer cardholders rewards, discounts, and other benefits. Store credit cards may have lower credit limits and higher interest rates than traditional ones and may also come with additional fees or restrictions. While store credit cards can be a good way to save money and earn rewards if you frequently shop at a particular store, it’s important to compare the terms and benefits of different cards and consider whether the card’s benefits outweigh its costs.
We haven’t included prepaid credit cards, as they function mostly as debit cards.
What’s the most popular credit card in Canada?
There is no single most popular credit card in Canada, as different credit cards appeal to different consumers based on their individual needs and preferences. However, some of the most popular credit cards in Canada include:
Scotiabank Passport Visa Infinite
The Scotiabank Passport Visa Infinite credit card is popular among frequent travellers, as it offers travel rewards, no foreign transaction fees, and complimentary airport lounge access. Check out Scotiabank’s top credit cards here.
Tangerine Money-Back Credit Card
This credit card is popular among those who want to earn cashback rewards on their everyday purchases, with no annual fee and flexible reward categories.
American Express Cobalt Card
This credit card is popular among millennials and foodies, as it offers rewards for dining, travel, and everyday purchases, a welcome bonus and flexible redemption options.
TD Aeroplan Visa Infinite
This credit card is popular among those who want to earn travel rewards, with Aeroplan miles that can be redeemed for flights, hotels, car rentals, and other travel expenses.
PC Financial Mastercard
This credit card is popular among shoppers who frequent Loblaw-affiliated grocery stores. It offers PC Optimum points for every purchase that can be redeemed for groceries, household items, and other merchandise.
How to choose the best credit card for you:
Choosing the best credit card for you requires careful consideration of your financial situation, spending habits, and personal preferences. Here are some factors to consider when choosing a credit card:
Rewards program: Determine what type of rewards program best suits your needs. A travel rewards credit card may be a good choice if you travel frequently. A cashback credit card may be more suitable if you prefer cashback rewards. Consider the rewards rate, how the rewards can be redeemed, and any restrictions or limitations.
Annual fees: Consider the yearly costs associated with each credit card. Some credit cards have no annual fees, while others may charge a significant expense. Determine whether the rewards and benefits the card offers to justify the annual fee’s cost.
Interest rates: Compare the interest rates offered by each credit card. If you plan to carry a balance from month to month, a low-interest credit card may be a better option. However, if you plan to pay your balance in full each month, the interest rate may be less of a concern.
Credit limit: Determine what credit limit you need based on your spending habits and ability to pay off your monthly balance. Some credit cards offer higher credit limits than others.
Additional benefits: Consider any other benefits offered by the credit card, such as travel insurance, purchase protection, or extended warranties. These benefits can add value to the credit card and make it more attractive.
Credit score: Check your credit score to see which credit cards you are eligible for. Some credit cards have strict eligibility requirements, and you may need a good or excellent credit score to qualify.
What are the advantages of using a credit card?
Using a credit card can provide several advantages, including:
Convenience: Credit cards offer a convenient purchase method without carrying cash or writing a check. They can be used online, in stores, and ATMs, making them a versatile payment option.
Credit building: Using a credit card responsibly and making timely payments can help build a positive credit history, vital for obtaining loans, mortgages, and other types of credit in the future.
Rewards: Many credit cards offer rewards such as cashback, points, or miles for every purchase made with the card. These rewards can add up over time and be redeemed for statement credits, merchandise, travel, or other benefits.
Fraud protection: Credit cards offer protection against fraud and unauthorized purchases. If your credit card is lost or stolen, you can report it to the issuer, and you will not be liable for any fraudulent charges.
Grace period: Most credit cards offer a grace period between the purchase and due dates, during which no interest is charged on the balance. This allows you to make purchases and pay them off without incurring interest charges.
Purchase protection: Some credit cards offer purchase protection, which covers you against loss or damage of the item purchased using the credit card. This can be particularly helpful for expensive items such as electronics or jewelry.
Overall, credit cards can provide a convenient and flexible payment option while offering the potential for rewards, credit building, and protection against fraud and other risks. However, using credit cards responsibly and making timely payments is essential to avoid high-interest charges and additional fees.
Which credit card should you get in Canada?
In conclusion, choosing the best credit card in Canada requires carefully considering your needs and preferences. Whether you’re looking for rewards, low fees, or other benefits, various credit cards are available to suit your needs.
Before deciding, it’s essential to compare the features and benefits of different credit cards and any associated fees, interest rates, and eligibility requirements.
By researching and selecting a credit card that aligns with your financial goals, you can take advantage of the many benefits that credit cards offer while staying on top of your finances.
The best credit card in Canada allows you to use your credit cards anywhere in the world. Gone are the days of credit cards that are useless outside your country or, for that matter, outside your province. In many ways, a credit card is what determines your financial identity.
You have access to many things with the best credit card in Canada. 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 have you established credit online or with a secured loan like a car or major home improvement loan? Your credit history becomes your financial fingerprint.