There are quite a few good credit cards out there for people with a fair credit, but some stand out above the rest for their impressive welcome bonuses, promotional rates, and excellent rewards. I constantly keep up with the credit cards and policy changes and make my recommendations below based on years of experience.
I recommend the President’s Choice Financial World Elite Mastercard as the #1 credit card in Canada if you have a fair credit and don't want to pay annual fees. It offers comprehensive travel and medical insurance, has very high earn rates when purchasing at partner stores, and has a 21-day interest-free grace period in place for all purchases.
What Is A Credit Card For Fair Credit?
Fair-credit credit cards are a type of credit card that requires a credit score of at least 560 to apply. For these cards, annual fees are considerably lower than some premium cards, and you can expect fees to be well below $50. Some don’t even charge annual fees or waive the first-year fee completely.
Some of the Canadian cards available for fair credit include cash back cards, balance transfer & low credit cards, and budget travel cards. Perks you can expect for the no-fee options include high cash back rates of up to 5% for the first couple of months, generous welcome bonuses, and grace periods on balance transfers. For the premium fair-credit credit cards, you can expect an annual fee of $120-$150 and plenty of travel perks like insurance, concierge services, and more. These are still limited compared to some of the premium travel cards for people with excellent credit.
Without further ado, here are the best fair-credit credit cards Canada has to offer:
The Best Credit Cards For Fair Credit In Canada
- President’s Choice Financial World Elite Mastercard: Best for earning points at PC partner stores
- BMO CashBack Mastercard: Best for high promotional cash back rate
- Home Trust Preferred Visa Card: Best for no foreign exchange fees
- MBNA Rewards Platinum Plus Mastercard: Best for no limit on how much cash back you can earn
- TD Aeroplan Visa Infinite Card: Best for comprehensive travel and medical insurance
- American Express Cobalt Card: Best for generous welcome bonus
- President's Choice Financial Mastercard: Best for low credit score requirement
- Scotiabank Value Visa Card: Best for 0% introductory interest rate for the first 6 months
- Tangerine Money-Back Credit Card: Best for customizable cash back categories
- Neo Financial Mastercard: Best for access to a virtual card
What Is A Fair Credit Score?
Credit score numbers in Canada range from 300 to 900; the higher your score, the more trustworthy you are in the eyes of financial institutions. Credit cards with the best perks and cost-effective benefits usually require a fair-to-very good score. A fair credit score is a score that ranges from 560 to 659. Here’s a breakdown so you can see how you stack up:
- Excellent credit score: Between 760-900
- Very Good credit score: Between 725-759
- Good credit score: Between 660-724
- Fair credit score: Between 560-659
- Bad credit score: Between 300-559
What Are Credit Card Bureaus?
Credit bureaus – also known as Consumer Credit Reporting Agencies – are private companies that collect and aggregate credit card information about you and how you’ve used your credit in the past. It tracks things like how long you’ve had credit, if you miss your payments, how many credit cards you have, and more. Here’s a list of all the factors that can affect your credit score:
- Length of your credit history
- If you carry a balance on your credit cards
- If you frequently miss payments
- Amount of outstanding debts
- Credit card utilization rate
- Number of recent credit card applications
- Records of insolvency or bankruptcy
In Canada, there are two major credit bureaus: TransUnion and Equifax. They assess your credit based on the parameters listed about your credit history and rank you based on how likely you are to pay back a debt.
Pros & Cons Of Credit Cards For Fair Credit
Pros: Why A Fair-Credit Credit Card May Be Worth It
- Low annual fees
- Offer the chance to earn rewards in most spending categories
- Flexible and easy-to-understand rewards system
- Choose from cash back, travel, low interest, or balance transfer cards
- Access to shopping perks like extended warranties, return guarantees, and more
Cons: Why A Fair-Credit Credit Card May Not Be Worth It
- Some travel and cash back cards have caps on how much you can earn every year
- Credit cards on this range usually have excellent promotional and welcome bonuses, but the base rates aren’t as good
- Limited perks and benefits compared to premium credit cards
Types Of Credit Cards For Fair Credit In Canada
#1 Cash Back Credit Cards
Cash back credit cards are a type of reward 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.
|BMO CashBack MasterCard||5% promotional cash back rate for the first 3 months|
|Tangerine Money-Back Credit Card||Customizable cash back categories (2% non-promotional rate)|
#2 Travel Credit Cards
Travel credit cards are a type of reward credit card that allows you to earn rewards in the form of points when you spend money at partner brands or make any travel-related purchase. Rewards for this type of card can be redeemed for flights and hotel stays at partner airlines and hotels. Alternatively, you can redeem your points for discounts on travel-related purchases.
|American Express Cobalt Card||Comprehensive insurance and access to American Express Experiences|
|Scotiabank Passport Visa Infinite Card||30,000 bonus welcome points and no foreign transaction fees|
#3 Balance Transfer & Low-Interest Credit Cards
Balance transfer credit cards are a type of credit card that offers users the option to transfer their balance from other credit cards to consolidate their debt, minimize their interests, and indirectly build their credit score by reducing their overall utilization percentage of their credit.
|Scotiabank Value Visa Card||0% introductory interest rate for the first 3 months|
How To Choose A Credit Card For Fair Credit In Canada
Depending on the type of card you pick, here are some of the things you should look at:
Perks & benefits
The three most common types of credit cards that require fair credit are cash back, travel, and balance transfer/low-interest cards. Depending on the type of card you’re looking for, you want it to have the best perks, which may include high cash back rates, discounts on flights and hotel stays, or low-interest rates.
The annual fee is the first thing you should look at when shopping for a credit card. If it’s a reward card like cash back or travel card, a high annual fee may significantly reduce your earnings if you can’t take advantage of all the perks and benefits. Generally, paying a higher annual fee means better perks, but you still have to spend money to earn money. Make sure you balance the annual fee with how much you expect to use your card in a given year.
Premium cash back and travel reward cards in Canada usually come with a welcome bonus or a promotional rate period. Welcome bonuses usually come in the form of points that can be exchanged for rewards, and usually, the kind of card that offers a welcome bonus also has an annual fee.
Promotional bonuses are time-limited offers that credit card issuers offer their new cardholders. For cash back and travel cards, these are usually higher cash back rates and higher point yield, respectively. For balance transfer cards, promotional bonuses are usually grace periods where you don’t pay interest on your transferred balances. Make sure to check what are the non-promotional rates and decide beforehand if it’s worth it to apply for the card.
How To Apply For A Credit Card For Fair Credit In Canada
Canadian credit cards are available to residents and non-permanent residents. However, most cards require you to be a Canadian resident. Some prepaid, store, and secured credit cards, may not require credit history, but it will depend on the issuer. For premium cards, you can expect residency requirements.
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.
Personal Or Household Income Requirements
Most metal credit cards come with an annual income requirement, usually ranging from $60,000-$80,000 personal income or $100,000-$150,000 household income. The higher the requirements, the better the perks. Income requirements are usually tied with annual fees as well, and cards with a high-income requirement also tend to have a high annual fee.
Fair-Credit Credit Cards FAQs
Are credit cards for people with fair credit worth it?
Fair credit cards might be worth it for you:
- If you have a low credit score and are looking to rebuild it
- If you’re looking for a credit card with a low-to-no annual fee
- If you want to limit your spending and are looking for a card that can help you manage your budget
Fair credit cards might not be worth it for you:
- If you are looking for a credit card with lots of perks and benefits
- If you have a high credit score and can apply for cards with better rewards
What Is The Best Free Credit Card For Fair Credit In Canada?
The best free credit card for fair credit in Canada is the President’s Choice Financial World Elite Mastercard. It comes with a generous welcome bonus, high earn rates at PC partner stores, and complimentary travel perks like concierge services and medical insurance.
What Is A Bad Credit Score In Canada?
In Canada, credit score numbers range from 300 to 900. The higher the number, the more trustworthy you are to financial institutions. The two largest credit card bureaus in Canada (Equifax and TransUnion) agree that a bad credit score is anything below 560.
What Credit Score Do You Start Off With In Canada?
It depends. In Canada, the lowest credit score is 300. However, you’d only start at these points if you have a very bad history – otherwise, you’re likely to start with a much better score.
What Credit Score Do You Need For A Credit Card In Canada?
It depends. Most credit card bureaus in Canada agree that an acceptable credit score for approval starts at 650, but credit cards like secured and prepaid don’t have such requirements.
Can I Get A Credit Card With Poor Credit?
Yes, you can get a credit card even with poor credit in Canada. There are cards dedicated for people with low credit, including secured and prepaid cards. Secured cards will help you rebuild your credit, while prepaid cards can make paying easier but will not help you with your credit.
How Can I Fix My Credit Score In Canada?
Secured credit cards are one of the best ways to rebuild your credit – as long as you make your payments on time. Other ways to rebuild your credit are to limit your number of credit card applications (hard checks will hurt your credit score in the short term), keep your utilization percentage on your credit cards low (less than 35%), and use different types of credit.
Once you increase your credit score high enough, you'll be able to apply for much better cards like the Amex Gold card.