There are quite a few good credit cards out there, but some stand out above the rest for their impressive welcome bonuses, promotional cash back rates, and excellent rewards. I constantly keep up with the latest promo rates and policy changes and make my recommendations below based on years of experience.
I recommend the American Express Cobalt Card as the #1 credit card in Canada due to its low monthly fees, very high earn rate on Eats & Drinks, and 30,000 welcome bonus points. It is one of the most flexible cards, with the option to transfer your points to other programs, and it comes with comprehensive insurance.
The Best Cash Back Credit Cards In Canada
- American Express Cobalt Card: Best for excellent welcome bonus and flexible rewards
- BMO CashBack World Elite Mastercard: Best for promotional cash back rate
- BMO CashBack MasterCard: Best for no annual fee cash back card
The Best Travel Credit Cards In Canada
- BMO Eclipse Visa Infinite Card: Best for travel perks and generous welcome bonus
- BMO Ascend World Elite Mastercard: Best for Mastercard Travel Pass membership and BMO Concierge services
- TD Aeroplan Visa Infinite Card: Best for emergency road services and Visa Infinite Concierge service
- BMO AIR MILES MasterCard: Best for no annual fee travel card
The Best Low-Interest Credit Cards In Canada
- MBNA True Line Mastercard credit card: Best for no annual fee and 12-month interest grace period
- MBNA True Line Gold Mastercard: Best for low-interest rate on cash advances
The Best Balance Transfer Credit Cards In Canada
- CIBC Select Visa Card: Best for low balance transfer fee and 10-month interest grace period
- Scotiabank Value Visa Card: Best for low-interest rates on cash advances and purchases
- President’s Choice Financial World Elite Mastercard: Best for earning PC points and comprehensive insurance
The Best Secured Credit Cards In Canada
- Capital One Guaranteed Approval Secured Mastercard: Best for low-security deposit requirement
- Home Trust Secured Visa: Best for reporting monthly to Equifax and TransUnion plus flexible interest rates
- Canadian Tire Triangle Mastercard: Best for earning cash back in CT Money
The Best Prepaid Credit Cards In Canada
- KOHO Mastercard Prepaid Card: Best for no foreign exchange fees
- STACK Prepaid Mastercard: Best for earning cash back on select hotels
- KOHO Premium Reloadable Prepaid Mastercard: Best for customizable cash back categories
The Best Visa Credit Cards In Canada
- BMO Eclipse Visa Infinite Privilege Card: Best for access to Visa Airport Experiences, Visa Infinite Dining Series, and Visa Infinite Wine Country
- CIBC Dividend Visa Infinite Card: Best for comprehensive medical and travel insurance and discounts at partner stores
- Home Trust Preferred Visa Card: Best for no foreign exchange fees, unlimited cash back, and no annual fee
The Best Mastercard Credit Cards In Canada
- BMO AIR MILES World Elite Mastercard: Best for Mastercard Travel Rewards and complimentary Mastercard Travel Pass
- MBNA Rewards Platinum Plus Mastercard: Best for high cash back rate on groceries, restaurants, memberships, and household utilities
- Tangerine World Mastercard: Best for customizable cash back categories
How Do Credit Cards Work?
When you make a purchase with a credit card, the credit card company charges the merchants a fee. Credit card rewards and benefits are funded by these and other fees, including annual fees and interests.
Reward credit cards, for example, payout rewards as cash back or travel points. The main difference between the two is how flexible they are. Cash back credit cards earn a fixed amount of cash and can help you save on most everyday purchases. Additionally, cash back rewards are very easy to redeem and can be added automatically to your card’s statement balance.
Other types of rewards cards offer points that can be exchanged for travel benefits, while others offer low-interest rates or low balance transfer fees. Depending on your goals, one type of credit card may be more beneficial than another, so make sure to pick the one that fits your spending habits.
Pros & Cons Of A Credit Card
Pros: Why a Credit Card may be worth it
- Earn rewards on every purchase and access unique benefits
- Choose from dozens of credit cards with different perks
- Establish a solid credit history and build your credit score
- You can borrow money and make purchases instantly
- Pay your balance on time and you won’t pay interests
- Extended warranty and purchase protection
Cons: Why a Credit Card may not be worth it
- It can be harder to budget and you might overspend
- If you fall behind on payments you will have to pay higher interests than other forms of credit
- Can damage your credit score if you pay on time
Types Of Credit Cards In Canada
#1 Rewards Credit Cards
Cash Back Credit Cards
Cash back credit cards are a type of rewards credit card that allows you to earn rewards in the form of cash back when you make purchases. Cash back rewards are usually category-bound, (meaning you can earn cash back when you make purchases towards certain categories like groceries or gas), or store-bound, meaning you can only earn cash when you purchase at participating stores.
Here are the three best cash back credit cards in Canada:
| American Express Cobalt Card | 5 MR points per $1 spent on eligible eats & drinks purchases |
| BMO CashBack World Elite Mastercard | 10% cash back on all purchases for the first 3 months |
| BMO CashBack MasterCard | 5% cash back on all purchases for the first 3 months |
Travel Credit Cards
Travel credit cards are similar to cash back cards in that you earn rewards on purchases – but unlike cash back cards, you don’t earn cash back but travel points or travel rewards. Travel points can be redeemed for travel-related purchases like fares or bookings. Travel cards are usually divided in two groups: general travel credit cards (which allow you to redeem your points at most airlines or hotel chains), and co-branded credit cards, which only allow you to exchange your points at select partners.
Here are some of the best credit cards for frequent flyers:
| BMO Eclipse Visa Infinite Card | 70,000 points welcome bonus |
| BMO Ascend World Elite Mastercard | 70,000 points welcome bonus |
| TD Aeroplan Visa Infinite Card | 50,000 Aeroplan points welcome bonus |
| BMO AIR MILES MasterCard | 2,000 Air Miles welcome bonus |
Besides these great credit cards for travel, you may also want to consider the American Express Platinum card. While it does have a steep annual fee, it makes up for it in rewards several times over. A cheaper yet equally good travel rewards card is the Amex Gold Rewards Card. With less than half the annual fee, the $100 hotel credit and the $50 statement credit for the Nexus application, the Priority Pass membership and the four complimentary visits to Plaza Premium Lounges make the Gold Rewards Card a sweet deal.
#2 Credit Cards For Paying Off Your Debt
Low-Interest Credit Cards
Low-interest credit cards offer extremely low interest rates on purchases and cash advances. These cards are very limited in terms of rewards and benefits, but they make up for it with promotional interest grace periods where you pay little-to-no interest for the first couple of months. These cards usually require a good credit score to apply but are worth it if you’re looking to minimize how much you pay in interest.
Here are the best options that offer introductory grace periods:
| MBNA True Line Mastercard credit card | 12.99% on purchases plus 0% introductory interest rate for the first 12 months |
| MBNA True Line Gold Mastercard | 8.99% on purchases |
Balance Transfer Credit Cards
Balance transfer credit cards are a type of credit card that allows you to transfer your outstanding balance from other credit cards. This is very handy if your current credit card charges very high interest and you can’t pay off your debt in a relatively short time. Instead of paying high interest, you can transfer your debt to a balance transfer credit card and take advantage of the lower interest to pay off your debt.
It’s very common for balance transfer cards to offer low transfer fees and introductory grace periods; here are the best options:
| CIBC Select Visa* Card | 1% balance transfer fee plus 0% introductory interest rate for the first 10 months |
| Scotiabank Value Visa Card | 1% balance transfer fee plus 0% introductory interest rate for the first 6 months |
| President’s Choice Financial World Elite Mastercard | 20.97% interest rate on purchases plus 21 days grace period |
#3 Credit Cards For Bad Credit
Secured Credit Cards
Secured credit cards are a type of card designed for individuals with a bad credit history. These cards work by requiring customers to make a security deposit, and they limit how much you can spend based on the size of your deposit. These cards report monthly to the largest credit card bureaus in Canada and are a very safe way to rebuild your credit and limit your spending.
Here are the best options that require the lowest security deposits:
| Capital One Guaranteed Approval Secured Mastercard | $75 minimum security deposit plus monthly reports to TransUnion and Equifax |
| Home Trust Secured Visa | $500 minimum security deposit plus flexible interest rates |
| Canadian Tire Triangle Mastercard | 15% cash back in CT Money on your first purchase |
Prepaid Credit Cards
Prepaid credit cards allow you to make purchases using funds you loaded into the card, instead of using a line of credit. In a way, they’re similar to debit and secured cards, but prepaid cards usually have better perks like cash back, no forex fees on online purchases, or virtual card benefits. However, these cards will not help you build your credit score – in fact, they won’t affect it in any way.
Here are some of the best options in Canada:
| KOHO Mastercard Prepaid Card | No foreign exchange fees on online or in-person purchases |
| STACK Prepaid Mastercard | Instant approval and 20% cash back on select hotels |
| KOHO Premium Reloadable Prepaid Mastercard | 2% cash back on 3 categories plus personalized financial coaching |
#4 Credit Cards By Network
Visa Credit Cards
| BMO eclipse Visa Infinite Privilege Card | 90,000 points welcome bonus plus access to the Visa Infinite Luxury Hotel Collection and Visa Infinite Concierge |
| CIBC Dividend Visa Infinite Card | Comprehensive travel insurance and access to the Visa Infinite program |
| Home Trust Preferred Visa Card | No foreign exchange fees plus 1% cash back on all purchases |
Mastercard Credit Cards
| BMO AIR MILES World Elite Mastercard | 2,000 Air Miles welcome bonus plus complimentary Mastercard Travel Pass membership |
| MBNA Rewards Platinum Plus Mastercard | 4 points per $1 spent for the first three months plus 20% bonus points every year on the anniversary of your account |
| Tangerine World Mastercard | Access to the Mastercard Travel Rewards program when purchasing abroad plus a complimentary DragonPass Travel Pass |
How To Choose A Credit Card Card In Canada
Card type
The most important thing you should consider when shopping for a credit card is the type of card it is. In Canada, there are many types, and not all fit your goals. In general, a good starting point is a cash back credit card. They are easy to incorporate into your trips to grocery stores or gas stations and there are plenty that doesn’t charge annual fees. Afterward, you can look for more specialized cards like travel or low-interest credit cards.
Annual fees
Another important fact to consider is the annual fees. In general, credit cards with the highest annual fees also offer the best perks and benefits. However, if you pick a travel credit card (which usually has benefits that expire every year), and you aren’t a frequent traveller, you will miss out on most benefits and end up losing money in the long run. The credit card you pick should fit your spending habits, not shape them.
Interest Rates
Another important factor is the interest rates; if you find yourself falling behind often on credit card payments, a cash back card might not be for you. The standard interest rate for cash back credit cards in Canada is around 19.99%, and it can easily outweigh the cash back benefits if you miss payments. This applies to all types of cards.
Welcome Bonus And Promotional Rates
Most credit cards come with generous welcome bonuses to entice users, but don’t be blinded by it. Double check the rates after the promotional period ends and decide if it’s worth applying for the card even after the period ends.
Credit bureau reporting
If you’re looking to build your credit, you want your credit card issuer to report to as many credit card bureaus as possible. The two biggest bureaus in Canada are Equifax and TransUnion, and those are the first financial institution checks to see if you are likely to pay your debts. This is particularly relevant if you’re looking for a secured card, as the main purpose of these is to build your credit.
Issuer
The two biggest credit card networks in Canada are Visa and Mastercard. Both are acceptable options, and are accepted almost universally. You will have no trouble using either of these when travelling abroad.
Credit Card Insurance & Purchase Warranties
Some credit cards offer comprehensive travel and medical insurance. This type of card usually has the highest annual fees but is a great option if you travel often and want to make sure your family is also protected. Here are some of the typical insured categories you can expect:
- Baggage loss insurance
- Baggage delay insurance
- Car rental insurance
- Extended warranty
- Mobile Insurance
- Flight delay insurance
- Purchase assurance
- Travel emergency medical
- Travel accident insurance
- Trip cancellation
- Trip interruption
How To Apply For A Credit Card In Canada
Age
In Canada, the minimum age to request a credit card is the age of the majority. Teens under that age can’t get approved for credit cards but can be added as authorized users to one of their parent’s credit cards. For reference, the age of the majority in Alberta, Manitoba, Ontario, Quebec, Prince Edward Island, and Saskatchewan is 18 years old. In all other provinces, the age of the majority is 19.
Residency Status
Canadian credit cards are available to residents and non-permanent residents. However, most premium credit cards require you to be a Canadian resident. You don't even need a credit history for other card types like prepaid and secured credit cards. At the end of the day, residency requirements will depend on the specific credit card issuer and the type of card.
Credit score
Most premium credit cards in Canada require a good to excellent credit score, starting at 700. Keep in mind that the higher your credit score, the more likely your application will be accepted, and the cards with the higher requirements usually have the best intro bonuses, rewards, and benefits.
Personal Or Household Income Requirements
Some credit cards have a minimum income requirement, ranging from $60,000-$80,000 for individuals or $100,000-$150,000 for households. Cards that require an income usually have the best benefits and tend to require a higher credit score.
Credit Cards FAQs
Are Credit Cards Worth It?
When credit cards might be worth it for you:
- If you find yourself making a lot of purchases and spending a lot of money every year at restaurants, gas stations, and grocery stores
- If you have no trouble keeping up with your monthly credit card payments and are very unlikely to fall behind on payments
- If you have a high credit score and access to the best credit cards with the best benefits
- If you are looking to make a large purchase and need a line of credit
- If you want to start earning points for a vacation or cash back on regular purchases
When cash back cards might not be worth it for you
- If you often fall behind on payments a credit card is not for you
- If you don’t make enough from the perks and benefits to pay off the yearly fee of a credit card
- If you are likely to build up more debt than you can handle, a credit card might not be for you
What Is The Best Free Credit Card In Canada?
The best free credit card in Canada is the American Express Green Card. It comes with a 10,000 MR points welcome bonus, offers access to exclusive American Express Experiences plus Front Of The Line, and allows you to exchange your points with other loyalty programs like Aeroplan and Marriot Bonvoy. The perks and the absence of an annual fee also make this one of the best American Express cards in Canada.
Is It Better Or Worse To Have More Credit Cards?
Having multiple cards can be good for your credit in the long term, as it decreases your overall utilization rate. However, having multiple credit cards can make it harder for you to keep track of all the payments, and annual fees play a role if you can’t make the most out of each card.
What Credit Card Is The Most Beneficial?
It depends on your circumstances. If you travel often a travel credit card is the way to go, if you shop often at grocery stores or gas stations, a cash back card might be for you. There are all kinds of credit cards, and sometimes it might be worth considering going for most than one type of credit card.
What Is Better Visa Or Mastercard?
There is no clear winner; both have wide acceptance in Canada and offer similar benefits. Both are also extremely secure and are accepted worldwide.
Does Closing A Credit Card Hurt Your Credit Score?
As long as you cancel your credit card after paying your balance, it will not harm your credit score. However, by closing your credit card you are also changing your overall utilization rate, which may affect your score in the short term.
