4 Best Low-Interest Credit Cards In Canada (Oct 2022)

September 9, 2022
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There are quite a few good low-interest credit cards out there, but some stand out above the rest for their very low rates and monthly reports to the largest credit card bureaus in Canada. I constantly keep up with the latest discounts and promotional rates and make my recommendations below based on years of experience.

I recommend the CIBC Select Visa as the #1 low-interest credit card in Canada due to its very low interest rates on purchases and cash advances, plus a very low annual fee. Additionally, it offers a 10-month grace period where you won't pay any interest at all, cash back on gas purchases, and 25% discounts on eligible car rentals.

What Is A Low-Interest Credit Card?

Low-interest credit cards are a type of credit card that offers extremely low-interest rates on purchases and cash advances. These cards usually come with a promotional interest grace period where you pay little-to-no interest for the first couple of months, up to a year, when you transfer your balance from other credit cards. 

These cards are very limited in terms of rewards and benefits – their main strength is their low non-promotional interest rates. You can expect rates as low as 8.99% on purchases and 12.99% on cash advances; that’s around half the average for Canadian credit cards. They also have relatively low annual fees going up to $50. Anything above that is considered a high annual for these types of cards. Keep in mind you will need a good credit score to apply for these – anything above 660 and you should get approved almost instantly.

Without further ado, here are the best low-interest credit cards Canada has to offer:

The Best Low-Interest Credit Cards In Canada

  1. CIBC Select Visa Card: Best for low fees and cash back rewards
  2. MBNA True Line Mastercard credit card: Best for 0% introductory interest rate for the first 12 months
  3. MBNA True Line Gold Mastercard: Best for low-interest rate on purchases
  4. Scotiabank Value Visa Card: Best for medical and job insurance
  5. Capital One Guaranteed Approval Secured Mastercard: Best for low credit scores and guaranteed approval

CIBC Select Visa* Card

Great for no interest on balance transfers for the first year cash back at gas stations
  • Annual Fee
    $29
  • Interest Rate
    13.99% on purchases, 13.99% on cash advances
  • Welcome Bonus
    N/A
  • Rec. Credit Score
    660+
  • Features & Benefits

    • 0% introductory interest rate on balance transfers for your first 10 months
    • 1% balance transfer fee
    • Join the Journie Rewards program and get 10 cents back per litre of gas at Pioneer, Ultramar, Fas Gas, and Chevron gas stations
  • Pros & Cons

    Why we like it

    Great for no interest on balance transfers for the first year cash back at gas stations

    Pros

    • 0% interest for the first 10 months after transferring your balance
    • Very low 1% balance transfer fee
    • Save up to 10 cents per litre of gas at Pioneer, Fas Gas, Ultramar and Chevron gas stations
    • Low purchase interest rate of just 13.99%
    • Request up to 3 additional cards at no cost
    • Transfer up to 50% of your assigned credit limit

    Cons

    • No cash back feature
    • No credit building
  • More Details

    Bonuses and fees

    The CIBC Select Visa Card has a $29 annual fee (completely waived for the first year for new cardholders). To apply for this card, you need a credit score of at least 660 and an annual income of $15,000 or more.

    Interest rates on purchases and cash advances are extremely low – just 13.99% -, considerably lower than the industry average for this type of card.

    Perks and Benefits

    The CIBC Select Visa Card offers a very low balance transfer rate of just 1% and a promotional interest rate of 0% for the first 10 months after applying and receiving your card. You can transfer a maximum of 50% of your credit limit, depending on factors like your annual income and credit card history. You will also get 10 cents when purchasing gas at partner stores Pioneer, Fas Gas, Ultramar, and Chevron by linking up with Journie Rewards.

    Another benefit is a 25% discount on car rentals (Avis and Budget) in Canada and the US. You can also request up to 3 additional cards every year at no cost and access instant cash advance for up to $1,000 daily.

    Insurance

    The CIBC Select Visa card comes with Common Carrier Accident Insurance, which covers up to $100,000 in damages when flying, travelling by ferry, train, or bus. To qualify for the CIBC Emergency Travel Medical Insurance, make sure to pay any medical fees using the CIBC Card, and your spouse and your children will be automatically covered for up to $100,000.

MBNA True Line Mastercard credit card

Great for no interest on balance transfers for the first year and no annual fee
  • Annual Fee
    $0
  • Interest Rate
    12.99% on purchases, 24.99% on cash advances
  • Welcome Bonus
    N/A
  • Rec. Credit Score
    660+
  • Features & Benefits

    • 0% introductory interest rate for the first 12 months
    • Around-the-clock fraud protection
    • Transfer your credit to your chequing account
  • Pros & Cons

    Why we like it

    Great for no interest on balance transfers for the first year and no annual fee

    Pros

    • 0% interest rate on balance transfers for the first 12 months
    • No annual fee
    • 10% off car rentals (Avis and Budget) in Canada and the US
    • Make payments on the go with Apple Pay
    • Add up to 9 authorized users at no cost
    • Industry low annual interest rates on purchases starting at 12.99%

    Cons

    • Needs a good credit score (660+)
    • High interest rates on cash advances (24.99%)
  • More Details

    Bonuses and fees

    The MBNA True Line Mastercard doesn’t charge annual fees and supports up to 9 authorized users – at no additional cost. You can also set up eligible credit card purchases over $100 and pay them back in monthly installments over the course of 6-18 months.

    To apply for this card, you just need to be a Canadian resident of age – there’s no minimum income required. However, you will need a credit score of at least 660.

    Perks and Benefits

    One of the main perks of the card is its low-interest fees. The regular annual interest rate is just 12.99%, compared to the industry standard of 19.99%, and the interest rate on balance transfers is also 12.99%.

    Using your MBNA True Line Mastercard to rent a car at participating Budget and Avis locations will get a 10% discount (applies internationally).

    Insurance

    This card comes with Mastercard Zero Liability and extended protection on all purchases, so you won’t be responsible for unauthorized purchases.

MBNA True Line® Gold Mastercard®

Great for low annual fee and low interest on purchases and balance transfers
  • Annual Fee
    $39
  • Interest Rate
    8.99% on purchases, 24.99% on cash advances
  • Welcome Bonus
    N/A
  • Rec. Credit Score
    660+
  • Features & Benefits

    • Around-the-clock-fraud protection
    • Access to 24/7 customer service
  • Pros & Cons

    Why we like it

    Great for low annual fee and low interest on purchases and balance transfers

    Pros

    • A low annual fee of just $39
    • Purchase assurance and warranty
    • Request up to 9 additional cards at no cost
    • Low interest rates on purchases and balance transfers (8.99%)
    • Fraud protection on all spendings
    • Customer service available 24/7

    Cons

    • No rewards on purchases
    • No welcome bonus
  • More Details

    Bonuses and fees

    The MBNA True Line Gold Mastercard has a relatively low annual fee of $39. It has round-the-clock customer support and very thorough fraud protection and has very competitive interest rates on balance transfers (8.99%) and purchases (8.99%), which makes it a good low-interest option. However, interest rates on cash advances are very high at 24.99%, so if cash advances are the primary reason you’re looking for a card, you should consider other options.

    There are no minimum income requirements to apply for this card, but there’s a 660 credit score minimum.

    Perks and Benefits

    Low-interest credit cards don’t offer a lot of perks, but here are some of the benefits of MBNA Mastercards:

    • 10% off car rentals at partner Budget and Avis stores worldwide
    • Full coverage and purchase assurance for the first 90 days
    • Doubles the warranty for up to an additional year when you pay using your MBNA card
    • Fraud protection on all spending

Scotiabank Value Visa Card

Great for building your credit, low balance transfer fees, and no annual fee
  • Annual Fee
    $29 (1st year free)
  • Interest Rate
    12.99% on purchase, 12.99% on cash advances
  • Welcome Bonus
    N/A
  • Rec. Credit Score
    660+
  • Features & Benefits

    • 0% introductory interest rate for the first 6 months
    • Annual fee waived for the first year
    • Transfer your balance seamlessly and pay higher interest balances quicker
  • Pros & Cons

    Why we like it

    Great for building your credit, low balance transfer fees, and no annual fee

    Pros

    • 0% interest on cash advances for the first 6 months
    • No annual fee for the first year
    • Low interest rate of just 12.99%
    • A low annual fee of just $29 (waived the first year)
    • Great for building your credit score (reports monthly to TransUnion)
    • No fees when requesting additional cards

    Cons

    • No welcome bonus
    • No rewards or perks
  • More Details

    Bonuses and fees

    The Scotiabank Value Visa Card is a low-interest credit card with a low annual fee of $29, waived for the first year. This card offers an introductory interest on cash advances of 0% for the first 6 months, and 12.99% after that. The same interest rate applies to purchases.

    Perks and benefits

    • Great for rebuilding your credit history
    • Interest-free grace period
    • Pay lower interests by transferring your balances to the Scotiabank card
    • Set up payment schedules on purchases over $100 through Scotiabank’s SelectPay, and pay no interests
    • Complimentary Avis and Budget car rental membership plus 25% discount in Canada and the US

    Insurance

    The Scotiabank Value Visa Card offers two insurance bundles, Basic and Comprehensive Protection. 

    • The basic bundle includes medical insurance for up to $50,000
    • The Comprehensive bundle includes medical, job loss, strike or lockout, and disability insurance

Capital One Guaranteed Approval Secured Mastercard

Great for building credit and no foreign exchange fees when purchasing abroad
  • Annual Fee
    $59
  • Interest Rate
    19.80% on purchases, 19.80% on cash advanes
  • Welcome Bonus
    N/A
  • Rec. Credit Score
    300+
  • Features & Benefits

    • Minimum security deposit between $75 and $300
    • Get your deposit back in full after you close your account
  • Pros & Cons

    Why we like it

    Great for building credit and no foreign exchange fees when purchasing abroad

    Pros

    • Great for building credit (reports monthly to Equifax and TransUnion)
    • No annual fee
    • No credit card or credit card history checks
    • No foreign exchange fees when purchasing abroad or online
    • Flexible initial deposit ($49, $99, or $200)
    • Add additional authorized users at no cost

    Cons

    • High interest rates on purchase (26.99%)
    • No rewards on purchases
  • More Details

    Bonuses and fees 

    The Capital One Guaranteed Approval Secured Mastercard is a secured credit card targeted at individuals with low credit scores. It charges an annual fee of $59, which is considered high for secured cards, but it comes with some benefits like insurance and travel assistance.

    The Capital One Secured card reports monthly to Canada's two largest credit card bureaus.

    Perks and benefits

    • Guaranteed approval
    • Reports monthly to TransUnion and Equifax
    • Great for rebuilding your credit history
    • Zero liability policy

How Do Low-Interest Credit Cards Work?

Low-interest credit cards’ main feature is their low rates. This type of card offers low annual interest rates – usually between 6-14% – and most come with a promotional rate or an interest-free grace period. Promotional periods tend to last anywhere between 6-10 months, and afterward, the interest rate is fixed.

This type of credit card is closely tied to balance transfer credit cards and is a great option if you’re looking to pause your interest payments and allocate that money to paying off your credit card debt.

Pros & Cons Of A Low-Interest Card

Pros: Why A Low-Interest Credit Card May Be Worth It

  • Lower interest rates on purchases and cash advances
  • Promotional interest rates and interest-free grace periods
  • Save up on the interest fees and pay off your debt faster
  • Some low-interest credit cards offer cash back and other perks
  • Low base interest rates on all debt

Cons: Why A Low-Interest Credit Card May Not Be Worth It

  • Perks are not as good as dedicated rewards credit cards

How To Choose A Low-Interest Credit Card In Canada

Promotional Interest Rates

Most low-interest credit cards come with some kind of promotional interest rate or grace period. It usually lasts between 6-10 months, and it’s a great way to start putting money towards paying your credit card debt. Look for a credit card that offers low promotional interest and grace periods of 6 months or more. Keep in mind that you will still need to pay your monthly balance during the grace period – just not the interest. 

Low Base Interest Rates

After the promotional period ends, most low-interest credit cards start charging interest, which is still significantly lower than those of regular credit cards. Before you apply for a low-interest credit card make sure you can pay off the full debt during the grace period, or, if you can’t, make sure the base interest rates after the grace period ends are reasonable. A good benchmark for low-interest credit cards is between 6-14%.

Keep in mind there are three interest rates depending on if you’re purchasing, requesting a cash advance, or transferring your balance.

Annual Fee

Most low-interest credit cards are very limited when it comes to rewards, as most people who are looking for this type of card are usually trying to reduce their spending, to pay off their debt. Consequently, earning enough cash back or taking advantage of other benefits to justify an annual fee can be difficult. it’s usually a better idea to go for a low-to-no fee credit card with low interest and a dedicated rewards credit card. In Canada, an annual fee higher than $40 for a low-interest credit card is considered high.

Keep in mind some credit cards may charge a higher annual fee in exchange for an even lower interest rate; in those cases, it might be beneficial to pay an annual fee.

How To Apply For A Low-Interest 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. For other card types like prepaid and secured credit cards, you don’t even need a credit history. At the end of the day, residency requirements will depend on the specific credit card issuer and the type of card.

Low-Interest Credit Card FAQs

Are Low-Interest Credit Cards Worth It?

Interest cards might be worth it for you:

  • If you carry a balance frequently and can benefit from a lower interest rate
  • If you’re looking to pay down your credit card debt in the next 6-10 months but the interests wouldn’t allow you to
  • If you want to make a large purchase that would take you a significant amount of time to pay
  • If you want to reduce your utilization ratio and increase your credit score by paying off your outstanding debt

Interest cards might not be worth it for you:

  • If you are looking for a credit card that offers rewards like high cash back rates or exclusive travel benefits

What Is The Best Free Low-Interest Credit Card In Canada?

The best free Interest card in Canada is the Scotiabank Select Value Visa Card. It offers a promotional interest rate of 0% for the first 6 months and a base 12.99% interest afterward. 

Does Having Multiple Credit Cards Affect Your Credit Score?

Yes, having multiple credit cards can affect your credit score. Usually having more than one credit card can help you build your credit score indirectly, by reducing your utilization percentage across all your cards. As long as you make your payments on time, having multiple credit cards can be beneficial.

What Is A Good Credit Score In Canada?

According to the two biggest credit card bureaus In Canada – Equifax, and TransUnion – a good credit score falls within 660 to 724. Anything above that is considered an excellent credit score.

What Are Good Interest Rates On Credit Cards?

In Canada, the average interest rate for credit card purchases is 19.99% and for cash advances 22.99%. Anything below 14% is considered a good interest rate.

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