There are quite a few good no-fee credit cards in Canada, but some stand out above the rest for their generous welcome bonuses and good rewards rates. I constantly keep up with the best options for Canadians looking for a no-fee card and make my recommendations below based on years of experience.
I recommend the American Express Green Card as the #1 no-fee credit card in Canada due to its generous welcome bonus, purchase protection, and the fact that your earn points on all purchases. It is one of the most flexible cards, with the option to transfer your points to other programs, and it comes with comprehensive insurance.
What Are No-Fee Credit Cards?
No-fee credit cards in Canada come in all shapes and forms; from reward cards like cash back and travel to more specialized cards like secured, low-interest, or balance transfer credit cards. In general, no-fee credit cards are more limited in their offerings compared to premium cards; this shows up as lower cash back, higher interest rates, or reduced insurance coverage.
Depending on the type of card you’re looking for, you can expect non-promotional cash back rates of 3% on select purchases, limited travel insurance, and interest-free grace periods on balance transfers. In the last couple of years, there’s been a consumer shift towards no-fee credit cards, but it may be some time before they gain even more ground – for now, if you’re choosing a credit card, keep in mind that premium cards have lots of additional perks and benefits, and you can usually earn more than enough to justify the annual fee.
Without further ado, here are the best no-fee credit cards Canada has to offer:
The Best No-Fee Credit Cards In Canada
- American Express Green Card: Best for very generous welcome bonus
- BMO AIR MILES Mastercard: Best for travel perks, including medical and travel insurance
- BMO CashBack Mastercard: Best for promotional cash back rate
- Brim Financial Mastercard: Best for no foreign transaction fees and high cash back rate at partner airlines
- Canadian Tire Triangle Mastercard: Best for cash back rate at CT partner stores
- Home Trust Secured Visa: Best for no credit score check and no-fee ATM withdrawals worldwide
- MBNA Rewards Platinum Plus Mastercard: Best for generous welcome bonus and cash back on all purchases
- MBNA True Line Mastercard credit card: Best for 0% introductory interest rate for the first 12 months
- President’s Choice Financial World Elite Mastercard: Best for travel insurance and high PC point earn rate
- SimplyCash Card from American Express: Best for no yearly cash back limit
- Tangerine World Mastercard: Best for customizable cash back categories
How Do No-Fee Credit Cards Work?
When you use a credit card, the credit card company makes money by charging merchants a merchant fee, charging cardholders an annual management fee, and charging interest to users who fall behind on their payments.
No-fee credit cards usually offer lower cash back rates, lower point yields, and more limited features compared to their premium version. Still, they also tend to have lower credit score minimums and little-to-no annual income requirements.
Even though no-fee credit cards don’t charge annual fees, you may still have to pay some fees – here are some that you should consider when reading the fine print:
- Interests on purchases and cash advances
- Foreign transaction fees
- Some credit cards offer add-ons like medical insurance or rental insurance
You can usually skip these entirely if you pay your balance on time and opt out of extra perks.
Pros & Cons Of A No-Fee Credit Card
Pros: Why a No-Fee Credit Card may be worth it
- You don’t have to worry about using your card enough to offset the annual fee
- There are many types of no-fee credit cards (cash back, travel, secured, and more)
- Not as many requirements to apply
- If you don’t fall behind on payment, you guaranteed to make a profit
- Great for building your credit history
Cons: Why a No-Fee Credit Card may not be worth it
- Limited benefits compared to premium credit cards
- If you use your credit card a lot and can easily make up for the annual fees, you might be missing out on premium benefits from cards with annual fees
Types Of No-Fee Credit Cards In Canada
There are four main types of no-fee credit cards in Canada:
#1 No-Fee Cash Back Credit Cards
Cash back credit cards are one of the simplest credit cards out there: spend money on eligible categories and earn a percentage back. No-fee cash back credit cards are the most sought-after no-fee credit cards; if you don’t pay an annual fee, whatever you earn is free money – as long as you don’t fall behind on payments.
|Tangerine Money-Back Credit Card||2% cash back on up to three categories|
|BMO CashBack Mastercard for Students||5% cash back on all purchases for the first three months|
#2 No-Fee Travel Credit Cards
Travel credit cards are one of the most expensive credit cards out there. The main reason is that these cards offer lots of perks and benefits for frequent travellers, like VIP lounge access, priority boarding, medical insurance, and more.
No-fee travel credit cards may not offer all the benefits of premium cards, but they’re free, and you can slowly accumulate points over time, making them a great alternative.
|BMO AIR MILES Mastercard||Earn 3 Miles per $25 spent at AIR MILES partners. Redeem your points for travel and cash rewards|
|MBNA Rewards Platinum Plus Mastercard||Earn 4 points per $1 spent on eligible purchases. Redeem your points for travel-related expense|
#3 No-Fee Secured Or Prepaid Credit Cards
If you’re trying to build up your credit score, you might want to consider a no-fee secured credit card or a no-fee prepaid credit card. With this type of card, you can easily build your credit and even earn modest cash back rewards.
|Home Trust Secured Visa||Reports monthly to Equifax and TransUnion|
|KOHO Mastercard Prepaid Card||0.5% cash back on all purchases|
How To Choose A No-Fee Credit Card In Canada
Here are the things you should consider when picking a no-fee credit card:
One of the first things you should consider when shopping for a no-fee credit card is the benefits. Based on your spending habits and the type of credit card you’re looking for, it’s key that you make sure the benefits from the credit card match your goals.
If you’re planning a vacation and are looking for a travel card that offers miles and travel perks, a reloadable or secured, a credit card might not be for you – despite not charging annual fees.
Another important factor is the interest rates; if you find yourself falling behind often on credit card payments, it might be worth considering a low-interest credit card. The standard interest rate for credit cards is around 19.99%, and some no-fee credit card companies may charge higher rates to compensate for their no-annual fee.
Welcome Bonus And Promotional Rates
Most credit cards in Canada come with a welcome bonus or promotional rates. Welcome bonuses are one-time rewards for new cardholders; they can come in the form of travel miles for travel credit cards or higher cash back rates for the first couple of months. In some cases, it might be worth signing up for credit cards, taking advantage of the welcome bonuses, and moving on to a different one.
How To Apply For A No Fee Credit Card In Canada
Before applying for no-fee credit care, here are some things you should consider. For starters, No Fee credit cards are just regular credit cards that don’t charge an annual fee. Here are the requirements to apply for any credit card:
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 guardian’s or 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.
Proof of Identity
You will need to provide information verifying your identity. In this step, you can provide a photo of your Canadian passport, a driver’s license, a military ID, a health card issued by a province, or an employee identification issued by the federal government.
Canadian credit cards are available to Canadian citizens, residents, and work Visa holders. If you’re not either of those, you’ll need to register with Equifax or TransUnion. You may also be required to visit a bank branch for more information.
If you don’t have a credit score, you might want to start with a prepaid or a secured credit card, which doesn’t have as many requirements.
No Fee credit cards in Canada tend to have low credit score requirements. However, the higher your credit score, the more likely your application is going to be accepted.
When you send out your credit card application, you will need these documents:
- Full name
- Date of birth
- Canadian driver’s license or government-issued ID
- Physical address, email address, and phone number
- Employer information: name, phone number, and address
- Financial information, including income, expenses, and a recent paycheque or bank statement
No-Fee Credit Card FAQs
Are No-Fee Credit Cards worth it?
The short answer is yes. For the last couple of years, credit card companies have been slowly adding no-fee credit cards to their offerings, and right now, there are more no-fee credit card options than ever.
The more thorough answer is that it depends – if you struggle to earn as much as you pay in annual fees, or if you can’t justify the fees you pay for a premium credit card, a no-fee card might be a great option for you. You won’t have to worry about meeting thresholds or tracking all your spending to make sure you earn enough – with a no-fee card, whatever you earn is a profit.
What Is The Best Free No-Fee Credit Card In Canada?
The best no-fee credit card in Canada is the MBNA Rewards Platinum Plus Mastercard. It has a promotional rate of 4 MBNA Rewards points per $1 spent on groceries, restaurants, and household utilities for the first three months.
How Many Credit Cards Are Too Many?
The biggest limitation when it comes to the number of credit cards you can have is your credit score and the annual fees.
If you’re applying for a lot of credit cards, chances are you will need to approve hard checks on your credit – this will hurt your credit score in the short term, and its compounds with the fact that a lower credit score is tied with a lower approval rate. The second factor is the annual fees; if you’re paying for three cash back cards, you may not earn enough in a year to pay off each of them.
A common strategy when it comes to credit cards is to have at least two cards, one with cash back benefits and another with more specific benefits tailored for you, like a travel credit card, for example.