Low Interest Credit Cards In Canada: How To Pick The Best One For You

February 29, 2020
Canadian Credit Card Reviews, Credit cards
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When it comes to low interest credit cards there are plenty of options to choose from, each and every one with different annual fees, interest rates and benefits to suit your specific needs. That’s why in this article, we have laid all the options for you to evaluate and consider accordingly. However, the MBNA True Line ® Mastercard ® is a great option for virtually anyone. With no annual fees, very low competitive interest rates and global customer service, this credit card is the perfect starting point for anyone.

Low interest credit cards are the perfect option for people who are just starting to build their credit score, want to apply for a credit card for the very first time, or are simply looking for a way to cover their expenses without generating more debt than they can handle.

According to statistics gathered by the Bank of Canada back in 2017, the average Canadian has a credit card debt of over $2,000, with only 57% of them being able to fully pay off this debt monthly. This means that the remaining 43% has accumulated debt, owning credit cards with such high interest rates that do nothing but add to this debt. 

That’s when considering getting a low-interest credit card comes in handy, and today we’re going to give you all the information you need to know about these cards, and how to pick the right one for you.

This post will be broken down into 5 sections.

What Are Low Interest Credit Cards?

A low interest credit card is just a regular credit card that happens to have a low interest rate. These types of cards usually offer a very low rate (some even go as low as offering a 0% interest rate for a period of time), that goes anywhere from five to ten percent.

Another very important characteristic of these types of cards is that they tend to have very low annual fees, which ultimately contributes to lower down the debt and allow you to save more money in the long run.

Why You Should Go For Low Interest Credit Cards

Owning a credit card means you have to pay off your debt sooner or later, and with the average Canadian owning two credit cards and 41% percent of them having one with a credit limit over $10,000, debt can accumulate fast.

Going for a low interest credit card takes a weight off your shoulders. If you carry debt from one month to another, having a card with low interests can save you money (instead of just adding to the debt!).

What You Should Keep In Mind When Looking For Low Interest Credit Cards

The first thing you should know is that picking a low interest credit card is just as important as picking a regular credit card. However, this time, instead of paying attention to the credit card limit, you’ll need to pay attention to the interest rates.

This doesn’t only apply to purchase rates, but also to balance transfer and even cash advances (all features you will use from time to time). Ideally, you’d want a credit card with low interest on these three aspects, but it’s most likely cash advances will always have a higher interest rate than most.

To put it shortly: Pay attention to the interest rates and fees the credit card might charge you and make sure they balance off and complement each other.

How To Choose A Low Interest Credit Card

Low interest credit cards have a purpose: To let you pay off your debt in an easier way. That’s why there are some steps you should follow and consider before picking your favorite card from the list below.

#1: Define what you need it for

Some people use these types of credit cards as a back-up plan for emergency expenses, others use them to slowly manage and build their credit score, and some simply want them as a way to be able to purchase/cover an expense and be able to pay the debt slowly.

So, it is extremely important for you to define what you need it for, and then consider how long it would take to pay off your balance. 

#2: Go for a 0% APR

APR or annual percentage rate is the percentage the credit card will charge you on the remaining balance on your account. Ideally, you should either go for a low interest credit card or one that offers you 0% for a least six months to a year.

#3: Pay attention to all the interest rates

We mentioned this just before, but you should definitely take into consideration the interest rates on purchases, balance transfers and cash advances, specially the first two.

Most low interest credit cards offer a low interest rate that goes from 8.99% to 12.99% for both purchases and balance transfers, plus, some give you a welcome offer for even lower rates for a short period of time on balance transfers. It might not seem like much at first, but it can be a real benefit in the long run.

Although we would like to say “the lower the interest rate the better”, it’s actually a better idea to recommend you to look at how these interest balance off with the benefit each card includes and then make a decision. 

#4: Go for no annual fee

Here’s the thing: Low interest credit cards usually have an annual fee that goes anywhere from $29 to $50, so it might be hard to find one without any annual fee (and if you do, the interest rates might be higher).

So, what we recommend is to look for any credit card that offers you six months up to a year of $0 annual fee instead.

#5: Consider the benefits

Last, but not least, don’t overlook the benefits your low interest credit card might offer you. It’s not all about getting the card with the lower rates and fees, it’s about making the most out of the benefits, and options these cards give you.

The Best Low Interest Credit Cards In Canada

When looking for a low interest credit card you need to have options, so we have put together a list (in no particular order) to show you the different credit cards you can apply for, and what they have to offer you.

#1: RBC® RateAdvantage® Card

RBC RateAdvantage Visa, a No-fee and  low interest credit card
APR on Purchases4.99% to 8.99%
APR on Cash Advances4.99% to 8.99%
APR on Balance TransferN/A
Annual Fee0
Ideal forIncrease your credit score.

As advertised on the RBC website, they offer lower interest rates, higher savings. The interest rate of this card variates according to your personal credit score, but it can go from 4.99% to 8.99% (on both purchase and cash rate). Of course, the better your score, the lower the rate you can get.

It doesn’t charge an annual fee, or for an additional card, and it comes with purchase security and extended warranty insurance that protects you against any loss or damage for up to 90 days.  This is a credit card thought for people who already know how to manage their credit and have a high credit score that could get them a lower rate.

In summary: A very low interest rate that can vary depending on your credit score, no annual fees, and purchase security. 

Check out and apply to obtain this credit card now

#2: MBNA True Line Mastercard

The MBNA True Line Mastercard One of the best low interest credit cards in Canada today
APR on Purchases12.99%
APR on Cash Advances24.99%
APR on Balance Transfer12.99%
Annual Fee0
Ideal forPeople who are looking to get their first-ever credit card / need it as a backup plan.

This low interest credit card is a catch. The MBNA offers whoever applies for this credit card a 0.00 annual fee, and an incredibly low interest for purchases of 12.99%. The interest for cash advances are 24.99% and the balance transfer are also 12.99%.

But get this: The MBNA has a welcome offer that gives you a 0% balance transfer rate for the first 12 months, which is by far the longest promotion a bank has to offer. 

This is the perfect low interest credit card for anyone, regardless if they are looking to get their very first credit card ever, or want this one as a backup plan.

In summary: The MBNA True Line Mastercard has a purchase rate of 12.99%, no annual fees and the option to spend a whole year with a 0% interest rate on balance transfers.

Read more about the side benefits and apply to obtain this credit card now.

You may also like our post on the Best Mastercard Credit Cards in Canada for this 2020

#3: No-fee Scotiabank Value® Visa

Another No-fee  low interest credit card option for Canadians, the No-Fee Scotiabank Value Visa
APR on Purchases16.99%
APR on Cash Advances16.99%
APR on Balance Transfer16.99%
Annual Fee0
Ideal forUse during emergencies.

Although this card has an interest rate of  16.99% on both purchases and balance transfers, which might not be considered low, it is still below the regular 19.99% rate most credit cards offer. Plus, the No-Fee Scotiabank Value Visa comes with a 0.00 annual fee.

As of this date, the card comes with a 3.99% introductory interest rate on balance transfers for the first 6 months, and multiple benefits, amongst which you’ll find additional purchase protection and insurances for unpredictable events.

We recommend going for this credit card if you’re not planning on making big expenses that could generate significant debt. Although the benefits are worth it, this is not the card you want if you really need very low interest rates. 

In summary: The interest rates for purchases and balance transfers are 16.99% (which is higher than most credit cards on the list). It doesn’t charge annual fees and comes with several benefits regarding protection.

Read more about the side benefits and apply to obtain this credit card now.

Related: You may also be interested in our post on Best Student Credit Cards.

#4: American Express EssentialTM Credit Card

Amex's runner for a No-fee  low interest credit card
APR on Purchases12.99%
APR on Cash Advances12.99%
APR on Balance Transfer12.99%
Annual Fee0
Ideal forAnything. Perfect to use during emergencies, to build credit score or manage debt.

With a 12.99% interest rates on both purchases and balance transfers, and the option to benefit of a 1.99% interest rate on the last one for half a year, the Essential is a top lower interest credit card competitor on this list

It comes with no annual fee, and many benefits such as: Around the clock, global customer service, emergency card replacement, and many benefits such as special access for shows, movies, restaurants and more.

This low interest credit card is an excellent option for literally anyone. The interest rate is manageable, the no annual fee options allows you to save up, and the benefits are just a great plus.

In summary: The American Express Essential Credit Card has no annual fees, a 12.99% interest rates on purchases and balance transfers (with the option of enjoying a 1.99% interest during the first 6 months on balance transfers), World wide customer service and purchase protection.

Read more about the side benefits and apply to obtain this credit card now.

#5: Scotiabank Value® Visa

The Scotiabank Value Visa, a low interest credit card with a mild annual fee. A good option for Canadians
APR on Purchases12.99%
APR on Cash Advances12.99%
APR on Balance Transfer12.99%
Annual Fee$29
Ideal forExisting Scotiabank users, lower and more manageable debts.

We come across another Scotiabank credit card, but this time, it comes with an annual fee of $29. However, the interest rates on purchases, cash advances and balance transfers is still considerably low, standing at 12.99%.

Although to get this low interest credit card you will have to meet certain requirements like having an income that reaches the $12,000 per year, the benefits that come with this card are worth it. Scotiabank Value Visa offers their users financial protection, deals and discounts with car rentals and around the clock customer service.

If you are already a Scotiabank user, applying to this credit card might be the perfect choice for you.

In summary: The Scotiabank Value Visa has a lower interest rate of 12.99% on both purchases and balance transfers, an annual fee of $29 (with a 0.99% introductory interest rate during the first six months), and extended benefits.

Read more about the benefits and apply to obtain this credit card now.

#6: Modulo Visa

The Modula from Desjardins has the lowest interest rate of them all, but at a price of $50 a year
APR on Purchases10.99%
APR on Cash Advances10.99%
APR on Balance Transfer10.99%
Annual Fee$50
Ideal forManaging accumulated debt/use as an emergency credit card.

The Desjardins low interest credit card has a lot to offer. Although the annual fee rises up to $50 (considerably more than most cards on the list), the interest rate on purchases is only 10.99%, which is a really good offer.

On top of that, the Modulo Visa card comes with a handful of benefits including rewards on bonusdollars that you exchange for gifts or even trips, travel insurance and even mobile device insurance. This is a very good credit card for anyone who hasn’t had a credit card before and wants to start building their score.

In summary: The Modulo Visa has a high annual fee of $50, but makes up to it with a very low interest rate on purchases of 10.99%, travel insurance, and the opportunity to turn 1% of your expenses in gifts and trips.

Read more about this credit card and apply now.

#7: MBNA True Line® Gold Mastercard®

APR on Purchases8.99%
APR on Cash Advances24.99%
APR on Balance Transfer8.99%
Annual Fee$39
Ideal forKeeping your debt under control.

This credit card has the lowest interest rate on the whole list. With an 8.99% interest rate on purchases and balance transfers, the MBNA True Line Gold Mastercard is a strong competitor. You will have to face a $39 annual fee, but it’s still arguably low when you consider the balance in your account will be interest-free for the first six months.

If you’re considering getting your first low interest credit card –or any credit card in general-, and are interested in keeping your debt under control, this is your option. The MBNA True Line Gold Mastercard also offers a 0% annual interest rate on balance transfer for the very first year, giving you even more time to save up.

As to the benefits, you can expect word class customer service no matter where you are, purchase protection and discounts on car rentals.

In summary: This is a great low interest credit card with a very low interest rate of 8.99%, an annual fee of $39 and many benefits for their users.

Read more about this credit card and apply now.

The Bottom Line Of The Best Low Interes Credit Cards in Canada

To wrap this up, there’s no wrong way to choose a low interest credit card. The fact that you are already going for a credit card with a lower interest rate than most is a sign of a smart financial move, regardless of what you end up choosing.

If you already have an account in one of the banks mentioned above,  we recommend you to go for that option, since you already have a record there. If, on the contrary, it’s your very first time applying for a credit card, then follow up on the steps mentioned above, evaluate the options on the list, and apply to whichever fits you best.

Regardless of this, we believe that the MBNA True Line Mastercard is one of the best options for most Canadians since it offers a competitive rate with no annual fee, plus one of the best balance transfer offers on the market with a 1-year interest-free grace period.

Are you going to miss out? Get yours today!