When you look at the various lists of the best credit cards in Canada, you’ll quickly notice that everyone has different criteria. Some people will say they’re unbiased and use data points to develop their lists, but I think that’s silly, as you can’t rely strictly on numbers to come up with the best cards.
In my opinion, there needs to be some bias. Many companies will have a bias towards cards that earn them a commission. I prefer to pick cards that are more practical for everyday Canadians. Not everyone will agree with my list of the best credit cards in Canada, but these cards will at least get you looking in the right direction.
|American Express Cobalt Card
|Scotia Momentum Visa Infinite Card
|Tangerine Money-Back Credit Card
|American Express Platinum Card
|Scotiabank Passport Visa Infinite
|American Express Green Card
|No fee travel
|American Express Aeroplan Reserve Card
|WestJet RBC World Elite Mastercard
|Marriott Bonvoy American Express Card
|Wealthsimple Cash Card
|No foreign transaction fees
|Scotiabank Gold American Express
|PC Financial World Elite Mastercard
|Scotiabank SCENE Visa
|MBNA True Line Mastercard
|American Express Business Gold Rewards Card
Best for everyday spending
American Express Cobalt Card
- $12.99 Monthly fee ($155.88 yearly)
- 1,250 monthly Membership Rewards points after charging $750 in purchases each month for a year (15,000 points total)
- Earn 5 points per $1 spent on eats and drinks
- Earn 3 points per $1 spent on streaming services
- Earn 2 points per $1 spent on travel
- Earn 1 point per $1 spent on all other purchases
When it comes to everyday spending, it doesn’t get much better than the American Express Cobalt Card. The earning rate is 5 American Express Membership Rewards points per $1 spent on eats and drinks, 3 points on streaming services, 2 points on travel and transit, and 1 point on all other purchases. Although there is a spending cap of $2,500 per month for eats and drinks, that’s still a lot of points you can earn.
Another reason this card is so popular is that you can redeem 1,000 points for a $10 statement credit. So whether you’re looking to pay for groceries, book travel, or buy gifts, you can use your points to do so. This makes the card a hybrid travel/ cash back card.
Some people also like this card because your points are flexible. Besides redeeming your points for a statement credit, you can also transfer them to some travel loyalty programs such as Aeroplan, Hilton and Marriott Bonvoy. Alternatively, you can use your points on the Fixed Points Travel Program, which allows you to double the value of your points on some bookings.
Eligibility: There’s no minimum income required. A credit score of 700 is recommended before applying.
Welcome bonus: Typically, you’ll earn 2,500 American Express Membership Rewards points when you spend $500 monthly for the first 12 months. That’s 30,000 bonus American Express Membership Rewards points you can earn in the first year. The offer has also been as low as 1,250 monthly points for 12 months, with a minimum spend of $750 each month.
Best for cash back
Scotia Momentum Visa Infinite Card
- $120 annual fee – first year free
- Earn 10% cash back on all purchases for the first 3 months (up to $2,000 in purchases)
- Earn 4% cash back on groceries, recurring bills, and subscription purchases
- Earn 2% cash back on gas and daily transit purchases
- Earn 1% cash back on all other purchases with no cash back limit
- Travel and mobile device insurance included
I have a detailed list of the best cash back cards in Canada, and the Scotiabank Momentum Visa Infinite Card is on that list. The earning rate is 4% cash back on groceries and recurring bill payments, 2% on gas and transit purchases, and 1% on all other eligible purchases. Admittedly, the American Express Cobalt Card has a better earn rate and also offers cash back, but that card is already featured above for a different category.
The good thing about the Scotia Momentum Visa Infinite Card is that the spending cap of $25,000 is calculated per year, so you don’t need to worry about monthly thresholds. The one downside is that Scotiabank’s cash back is only paid out once a year on your November statement.
Some people also prefer this card because it has a great overall insurance package. Not only do you get comprehensive travel insurance, but you also get mobile device and purchase insurance.
Eligibility: A personal income of $60,000, household income of $100,000 or a minimum of $250,000 of assets under management. A credit score of at least 700 is recommended.
Welcome bonus: Usually 10% cash back for the first three months, up to $2,000 in spending, and no annual fee for the first year.
Best for no fee
Tangerine Money-Back Credit Card
- No annual fee
- 10% cash back up to $1,000 in spending ($100 cash back) for the first 2 months
- 2% cash back on up to 3 categories
- 0.5% cash back on all other purchases
Credit cards with no annual fee are incredibly popular, but they don’t typically come with many benefits. The Tangerine Money-Back Credit Card is an exception to this trend as you can earn up to 2% cashback on three categories of your choice while all other spending earns you 0.5% cash back.
You get to choose two categories that earn you 2% cash back right away, and a third one if you set up your cash back to automatically deposit into your Tangerine account. Although Tangerine offers 10 broad categories to choose from, there’s no general travel category. You can choose hotel/motels, but not flights. This isn’t a deal-breaker, but it’s something to be aware of.
What’s interesting is that Tangerine also offers a World Mastercard version of this card. Although you’ll need a higher personal or household income to qualify, you do get some added insurance.
Eligibility: A personal income of $12,000. If you have a personal income of $60,000, a household income of $100,000, or a balance of $250,000 or more with Tangerine, you may qualify for the Tangerine World Mastercard. A minimum credit score of 660 is recommended.
Welcome bonus: Typically 10% cash back up to $1,000 in spending in the first two to three months. This bonus offer has been worth as much as 15%.
Best for frequent and luxury travel
American Express Platinum Card
- $799 annual fee
- Earn 70,000 Membership Rewards points when spending $10,000 in the first 3 months
- 30,000 additional points when making any purchase in months 14 – 17
- Earn 2 points per $1 spent on dining and travel, and 1 point on all other purchases
- $200 annual travel credit
- $200 annual dining credit (per calendar year)
- Unlimited airport lounge access
- Hotel status upgrades
The American Express Platinum Card is the best credit card for frequent travellers. You get unlimited airport lounge access for you plus a guest, a comprehensive travel insurance package that includes trip cancellation/interruption and car rental insurance, hotel status upgrades, a NEXUS (TSA precheck / Global entry) rebate and more.
This card earns you American Express Membership Rewards points, which are very valuable. When you redeem 1,000 points, you get a $10 statement credit. This applies to any purchase you make. In addition, your points can be transferred to multiple travel loyalty programs such as Aeroplan and Marriott Bonvoy. Depending on the redemption, you could increase the value of your points.
Some people will look at the annual fee of $799, and instantly pass. However, there’s a way to get the annual fee down to $199 for the first year. When you sign up, you get a dining credit of $200 per calendar year. This credit can be used at some high-end restaurants across the country. You also get a $200 travel credit, once per year. That’s $600 in travel credits you can get in the first year. Plus, the welcome bonus is often very generous, so you could easily come out ahead with this card.
Eligibility: There’s no minimum income required. A credit score of 740 is recommended before applying.
Welcome bonus: Typically worth 80,000 to 100,000 American Express Membership Rewards points when using a referral link. The minimum spending requirement is usually $5,000 to $10,000.
Best for all-in-one travel needs
Scotiabank Passport™ Visa Infinite* Card
- $150 annual fee
- 30,000 Scene+ points when spending $1,000 in the first 3 months
- 10,000 points when spending $40,000 in the first year
- Earn 3 Scene+ points per $1 spent at Empire owned supermarkets
- Earn 2 Scene+ points per $1 spent on eligible grocery stores, dining, entertainment, and daily transit purchases
- Earn 1 Scene+ point per $1 spent on all other eligible purchases
- Visa Airport Companion Program membership + 6 passes per year
- No foreign transaction fees
Canadians who don’t want multiple credit cards and prefer one card that gives them good benefits should consider the Scotiabank Passport Visa Infinite Card. It has no foreign transaction fees, airport lounge access with six free annual visits, and great travel insurance.
With this card, you’ll earn Scene+ points. Although this rewards program isn’t the best one out there, it’s added some great partners over the years. The biggest partnership would be Empire-owned grocery stores, which include Sobeys, IGA, Foodland and more. They’re also partnered with Cineplex and Home Hardware. That means you can double dip the points at these retailers by scanning your Scene card and paying with your Scotiabank Passport Visa Infinite Card.
When it comes to redeeming your points, you can do so easily through the Scotiabank travel portal. Alternatively, you can pay for any travel purchase with your card and redeem your points later for the transaction ($50 minimum). You can also use your points at Cineplex and Empire-owned grocery stores.
Eligibility: A minimum personal income of $60,000 or a household income of $100,000 or at least $250,000 in assets under management. A credit score of 700 is also recommended.
Welcome bonus: You’ll typically get 35,000 to 50,000 Scene+ points as the welcome offer. In most cases, you’ll need to spend a minimum amount in the first three months and another in the first 12 months for the full bonus.
Best for no fee travel
American Express Green Card
- No annual fee
- 10,000 Membership Rewards points welcome bonus
- Earn 1 point per $1 spent on all purchases
- Earn 1 Additional point per $1 spent on American Express Travel
- Buyer’s assurance and purchase protection
The American Express Green Card has quickly become one of the most popular no fee travel credit cards. The earn rate is a straight 1 point per $1 spent. For a no fee card, that’s pretty standard. However, this card also comes with a generous welcome bonus that’s worth at least $100.
What makes this card popular is that you earn Amex Membership Rewards points. As mentioned above, you can redeem 1,000 points for a $10 statement credit. Alternatively, you can book travel through the American Express travel portal, the fixed points travel program, or you can transfer your points to other loyalty programs.
Even though this is an entry-level no fee card, you still get access to American Express Experiences, which includes front of the presales, reserved tickets, offers, entertainment and dining experiences, and more.
Eligibility: There’s no minimum income required. A credit score of 660 is recommended before applying.
Welcome bonus: It’s consistently been 10,000 points when you charge $1,000 to your card in the first three months of cardmembership.
Best for Aeroplan
TD Aeroplan Visa Infinite Privilege Card
- $599 annual fee
- Earn 20,000 Aeroplan points after your first purchase
- Earn 30,000 Aeroplan points when you spend $10,000 in the first 180 days
- Earn 25,000 Aeroplan points when you spend $15,000 in the first year
- Earn 2 Aeroplan points per $1 spent on Air Canada purchases, 1.5 points on gas, and groceries, and 1 point on all other purchases
- First bag checked free, priority check-in & boarding on Air Canada flights
- Maple Leaf Lounge access in North America
- DragonPass airport lounge access + 6 free annual passes
Air Canada is Canada’s top airline, so many people will naturally want to collect Aeroplan points. The TD Aeroplan Visa Infinite Privilege Card is a premium Aeroplan credit card, with incredible perks. The earning rate is 2 Aeroplan points per $1 spent on Air Canada purchases, 1.5 points on gas, groceries, dining, and travel, and 1.25 points on all other purchases.
The included Air Canada benefits are impressive as you get Maple Leaf Lounge access in North America for you and a guest, priority boarding (zone 2), priority baggage handling, priority airport standby, and priority upgrades. You can also carry over up to 50 unused eUpgrade credits.
Eligibility: A minimum personal income of $60,000 or a household income of $100,000 is required. It’s also recommended that you have a credit score of at least 700.
Welcome bonus: Typically worth between 50,000 to 70,000 Aeroplan points. This bonus is usually divided into multiple parts with different minimum spending requirements.
Best for WestJet Rewards
WestJet RBC World Elite Mastercard
- $119 annual fee
- 300 WestJet dollars on your first purchase
- 300 WestJet dollars when you spend $5,000 in the first 3 months
- 100 WestJet dollar one-time anniversary bonus
- Earn 2% back in WestJet dollars on WestJet flights or WestJet Vacations packages
- Earn 1.5% back on all other purchases
- Receive a round-trip companion voucher – every year – for any WestJet destination starting from $119 (plus taxes, fees, charges and other ATC)
- Get free first checked bags for the primary cardholder and up to 8 guests on the same reservation
The WestJet RBC World Elite Mastercard is one of the best airline credit cards in Canada. Simply put, if you fly WestJet regularly, this card can help you save big since you’ll earn 2% back in WestJet dollars on WestJet flights or WestJet Vacations packages and 1.5% on all other purchases. In addition, the primary cardholder and guests on the same itinerary (up to 8 total) get their first bag checked free.
WestJet is appealing to those who live in Alberta and British Columbia since they offer many flights across the country and abroad. Even if you don’t fly WestJet regularly, the card does come with a WestJet companion voucher that could help you save. When travelling with the primary cardholder, the voucher allows you to buy another ticket for your companion at a base fare starting at CAD $119.
The companion voucher is ideal for families with two kids. If each parent had the card, they’d get two companion vouchers. That would allow them to save on trips to Disney World or Universal Orlando Resort. These are some great travel perks you’re getting.
Eligibility: Minimum personal income of $80,000 or a household income of $150,000.
Welcome bonus: Usually up to 4450 WestJet dollars. You’re given 250 WestJet dollars after your first purchase and another 200 WestJet dollars when you spend $5,000 in the first three months. There have been occasional offers of up to 700 WestJet dollars.
Best for hotel stays
Marriott Bonvoy American Express Card
- $120 annual fee
- 70,000 Marriott Bonvoy points when you charge $3,000 in the first 3 months
- Earn 5 Marriott Bonvoy points per $1 spent at participating Marriott properties
- Earn 3 Marriott Bonvoy points per $1 spent at gas and travel purchases for the first 6 months (up to 15,000 points) – Offer ends May 6, 2024
- Earn 2 Marriott Bonvoy points for per $1 spent on all other purchases
- Annual free night certificate worth up to 35,000 points
Instead of saving on flights, some people would prefer to save on their hotel stays. If that sounds like you, the best credit card in Canada for you is the Marriott Bonvoy American Express Card. That’s because Marriott has over 8,000 properties in 130+ countries.
With this card, you get an earning rate of 5 Marriott Bonvoy points per $1 spent at participating properties and 2 points on all your other purchases. One Marriott Bonvoy point is worth about .9 cents, so you’re getting a decent rate of return.
What really makes this card appealing is the free annual night certificate you get each year worth up to 35,000 points. That certificate can easily have a value of $300+, which is clearly more than the $120 annual fee. You also get Silver Elite Status and 15 elite night credits each year.
Eligibility: No listed income requirement. A credit score of at least 700 is recommended.
Welcome bonus: Typically worth 50,000 – 70,000 Marriott Bonvoy points when you spend $3,000 in the first three months of card membership.
Best for no foreign transaction fees
Wealthsimple Cash Card
- No annual fee
- Up to $3,000 welcome bouns
- 1% back in cash, stocks, or crypto on all purchases
- 4% interest on deposited funds
- No foreign transaction fees on purchases or ATM withdrawals
- CDIC insurance protection
The Wealthsimple Cash Card has quickly become one of the most popular no foreign transaction fee cards in Canada. In case you didn’t know, most credit cards in Canada charge a 2.5% fee when you make any purchase that’s not in Canadian dollars. That clearly adds up. When using the Wealthsimple Cash Card, you just pay the spot exchange rate. Since this is a no fee prepaid card, it’s the perfect card to have when you need to make a foreign purchase.
Another advantage of this card is that you also won’t be charged exchange fees when using foreign ATMs. That said, the ATM operator will likely charge you a fee of around $3 to use their machine, so max out your limit of $500 CAD when you do need to get cash.
Some people will also like the fact that you’ll earn 1% in cash back rewards instantly on all your purchases. Plus, any funds you have loaded to your card will earn you interest. The only downside of this card is that it doesn’t earn you interest since it’s a prepaid card.
Eligibility: Must have a Wealthsimple Cash account, but no income or credit history is required.
Welcome bonus: Up to $3,000 (it’s random)
Best for groceries
Scotiabank Gold American Express® Card
- $120 annual fee
- 20,000 Scene+™ points when you spend $1,000 in the first 3 months
- 20,000 Scene+ points when you spend $7,500 in the first year
- Earn 6 Scene+ points per $1 spent at Empire owned supermarkets
- Earn 5 Scene+ points per $1 spent on grocery, dining, and entertainment
- Earn 3 Scene+ points per $1 spent on gas, and daily transit purchases
- Earn 1 Scene+ point on all other purchases
- No foreign transaction fees
To some people, the Scotiabank Gold American Express® Card might be an odd choice as the best credit card in Canada for groceries, but let me explain. The earning rate is 6 Scene+ points per $1 spent at Empire-owned supermarkets (Sobeys, IGA, Foodland, etc.), 5 points at other grocery stores, 3 points on gas, and daily transit, and 1 point on all other purchases. If you shop at Empire-owned grocery stores, then this card gives you the highest earning rate.
That said, say you shop at Loblaws-owned stores such as Loblaws, No Frills, and Superstore, the PC Financial World Elite Mastercard would be a better choice. Also, the American Express Cobalt Card earns you 5X the points at grocery stores, and you can transfer your points to Aeroplan and Marriott Bovnoy for a potentially higher value.
The other benefits of the Scotiabank Gold American Express® Card are no foreign transaction fees, mobile device insurance, and great travel insurance. With these benefits, it’s arguably one of the best travel credit cards in Canada.
Eligibility: There’s no minimum income requirement. A credit score of at least 700 is recommended.
Welcome bonus: Typically worth between 40,000 and 60,000 Scene+ points when. To get the full bonus, you usually need to meet multiple minimum spending requirements.
Best for PC Optimum
PC Financial World Elite Mastercard
- No annual fee
- Earn 45 PC Optimum Points per $1 dollar spent at Shoppers Drug Mart
- Earn 30 PC Optimum Points per $1 spent where PC Products are sold and at PC Travel
- Earn at least 30 PC Optimum Points per litre at Esso/Mobil locations
- Earn 10 PC Optimum Points per $1 spent on all other purchases
If you’re a fan of PC Optimum the PC Financial World Elite Mastercard will earn you the most points. You’ll get 30 PC Optimum points per $1 spent at Loblaws-owned grocery stores (Loblaws, No Frills, Superstore, etc.). If you shop at Shopper Drug Mart, you earn 45 points per $1 spent and gas purchased at Esso/Mobil locations earns you 30 points per litre.
The real value of this card comes with PC Optimum. PC Optimum is one of the best loyalty programs, and they have many ways to earn additional points. If you don’t do your grocery shopping at Loblaws-owned stores, you’re better off with the American Express Cobalt Card or Scotiabank Momentum Visa Infinite Card.
Eligibility: A personal income of $80,000 or $150,000 is required. That said, two other PC Financial Mastercards have lower earning rates and a lower minimum income requirement. A credit score of 700 is recommended.
Welcome bonus: You can sometimes get up to 100,000 PC Optimum points when signing up in a store.
Best for students
Scotiabank Scene+®* Visa* Card
- No annual fee
- 5,000 Scene+ points when you spend $750 in the first 3 months
- Earn 2 Scene+ points per $1 spent at Cineplex™ theatres, cineplex.com and Empire owned grocery stores
- Earn 1 Scene+ point per $1 spent on all other purchases
The best student credit card in Canada is a bit subjective, but I personally recommend the Scotiabank® Scene+™ Visa* Card. It has no annual fee, you get a minimum credit limit of $500 and the odds of being approved as a student are high- especially if you bank with Scotiabank.
The Earning rate is 2 Scene+ points per dollar spent at Empire-owned grocery stores (Sobeys, Safeway, Foodland & Participating Co-ops, FreshCo, etc.), Home Hardware, and Cineplex. All other purchases earn you 1 Scene+ point per dollar spent.
You don’t get any other benefits that are worth mentioning, but this card will allow you to build your credit score. As a student, establishing a good credit history is essential since it’ll help you if you ever need a loan in the future.
Eligibility: A personal income of $12,000 is required, but students may be approved without income. The recommended minimum credit score before applying is 660.
Welcome bonus: Typically worth 5,000 Scene+ points when spending $750 in the first three months.
Best for low interest
MBNA True Line Mastercard
- No annual fee
- 0% balance transfer for 12 months – 3% balance transfer fee applies
- 12.99% standard interest rate
- Save with Avis Rent A Car and Budget Rent A Car
Anyone who typically carries a balance would likely be better off with a low interest credit card than a rewards card since it’ll help them save money in the long run. The MBNA True Line Mastercard is the perfect card since the regular interest rate is 12.99% on all everyday purchases.
Instead of offering a welcome bonus, this card allows you to perform a balance transfer with an introductory interest rate of 0% for 12 months. Once the promotional period ends, you’ll pay the regular interest rate. There is a balance transfer fee of 3%, but the savings can be worth it. This is easily one of the best balance transfer credit cards in Canada.
Eligibility: There’s no minimum income requirement. A minimum credit score of 660 is recommended.
Welcome bonus: Balance transfer option with 0% interest for 12 months (3% fee applies).
Best for business owners
American Express Business Gold Rewards Card
- $199 annual fee
- Up to 115,000 Membership Rewards points welcome bonus when using a referral link
- Earn 75,000 Membership Rewards points when spending $5,000 in the first 3 months
- Earn 10,000 points when you charge $20,000 each quarter (yearly benefit)
- Earn 1 Membership Rewards point per $1 spent on all other purchases
- 55 interest-free days
- Mobile device insurance
Admittedly, the best business credit card in Canada will depend on the type of business you have and what your purchasing needs are. That said, I recommend the American Express Business Gold Rewards Card because it’s a charge card. That means you can get an incredibly high credit limit if you always pay your bills on time.
What makes this card appealing is that it has a low annual fee of $199, and you get business benefits. That includes 55 interest free days, expense reports, and employee abuse protection. In addition, the welcome bonus offered is typically one of the best available.
Eligibility: There’s no minimum income required. A credit score of 700 is recommended before applying.
Welcome bonus: Typically worth 75,000 American Express Membership Rewards points when spending $5,000 in the first three months.
How do credit cards work
A credit card is a method of payment that allows you to borrow money from a financial institution temporarily rather than use your own money.
When you are approved for the credit card, you are given a limit on the amount you can spend. Every time you use your credit card, the limit decreases until you pay it off, and it resets. Credit cards are meant to be paid off in full monthly, and the inability to do so will lead to interest charges and potentially other fees as well. Inability to pay off your credit card in full can also result in losing and any perks, benefits, or rewards that come with the card. Not to mention it may lead to hefty credit card debt
Those who pay off their credit card in full and on time can build their credit and reap the rewards of high-value credit cards that offer points, cash-back, and other benefits. It’s an incredibly helpful and lucrative tool, when used properly.
Types of credit cards in Canada
Although credit cards all function in the same way, there are different types of credit cards designed for various people. When choosing a credit card, the type of credit card you’re interested in is often the first consideration. Note that one type of credit card might be a good choice for you at this moment, but your situation may change later. That’s why you’ll want to know about all the different types of credit cards and how they work.
Rewards credit cards
With travel rewards credit cards, you earn travel, cash back, or store rewards. These types of credit cards can be very lucrative since they’ll allow you to travel for less or you can get money back in your pocket. Most premium rewards cards also come with additional benefits such as travel insurance, extended warranty, and more.
No fee credit cards
As the name implies, no fee credit cards have no annual fee. These cards are ideal for people that want to keep their costs down or have limited income. Note that no fee credit cards don’t offer nearly as many benefits as credit cards with an annual fee.
Student credit cards
Every financial institution has student credit cards. Generally, these cards have lower requirements for approval, so they’re an excellent way for students to start building credit. If you already bank with the financial institution where you’re applying for the student credit card, there’s an even greater chance of being approved.
Low interest credit cards
If you think you’ll carry a balance each month, then a low interest credit card is the way to go. Most credit cards charge an interest rate of 20% – 22%, but with low interest cards, you’ll be paying 8% – 16%. While that’s still high, is much lower than traditional cards.
Balance transfer credit cards
With balance transfer credit cards, you can transfer your balance from an existing credit card to a new credit card. You would do this because balance transfer credit cards typically come with a low interest promotional rate. If you took advantage of this, you could quickly pay down your debt.
Secured credit cards
Even if you have a low credit score you can still qualify for a credit card. The catch is, you’ll likely only be approved for a secured credit card. With these cards, you need to load a security deposit first. Those funds act like your credit limit. Your credit score will slowly increase as you make your payments on time.
Prepaid credit cards
Prepaid credit cards aren’t traditional credit cards. With prepaid credit cards, you load funds first, and then you can spend them on the associated card network (Visa, Mastercard, and American Express). They don’t typically come with as many benefits as regular credit cards, but some people like them since it can help them manage their finances.
What are credit card rewards?
Many credit cards give you rewards whenever you make a purchase. The type of rewards you’ll earn depends on your card type. As a general rule, you want to pick a rewards program that lines up with the type of rewards you like. For example, you shouldn’t get a travel rewards credit card if you don’t like to travel. You’d be better off with a cash back credit card.
The following are the four types of rewards you can earn from a credit card:
Airline / Hotels
Multiple credit cards are co-branded with airline and hotel loyalty programs. For example, Aeroplan, Marriott Bonvoy, and WestJet Rewards. The points you earn can only be used with the co-branded loyalty program. These credit cards can a good choice as they often come with extra perks such as free checked bags, priority services, and early check-in.
Every financial institution has a general travel rewards program where you can earn points with one of their credit cards. These types of rewards are great for people who don’t tend to be loyal to a single airline or hotel. While the flexibility is nice, the value of your points can be less than specific airline or hotel loyalty programs
Many people like cash back credit cards because they’re easy to understand. For every purchase you make, you get a set percentage back in cash back. Your cash back is typically paid monthly, annually, or when you meet a minimum threshold.
A few major merchants have their own loyalty programs or are partnered with a loyalty program where you can earn points. Getting a co-branded credit card that offers store rewards can be worth it if you regularly shop at the participating merchants. This can be especially true for grocery stores or Costco.
What are credit card earn rates?
Every rewards card has different earn rates. You could earn additional rewards depending on the card and the categories you’re spending on. This is an incredible way to increase your cash back or rewards if the increased earn rates line up with your natural spending. Understanding how credit card earn rates work is essential, so you never leave rewards on the table.
Some credit cards offer promotional earn rates when you sign up for a new credit card. For example, you might earn 10% cash back on all purchases or 10X the points on food purchases. You can even get a promotional low interest balance transfer rate for some cards. Note that these promotional rates are only for a limited time and typically have a cap.
Accelerated earn rate
Accelerated earn rates are where you earn extra points every day on specific categories. For example, you might get 5X the points on grocery purchases or 3% back in cash at gas stations. Most accelerated earn rates have a cap. Once you reach that cap, you’d earn the base earn rate until you hit your cardmembership anniversary.
Base earn rate
You’re earning the base earn rate when there’s no promotional or accelerated earn rate. This is the minimum number of rewards you’ll earn for all other eligible purchases. No fee credit cards typically have a very low base earn rate, whereas premium credit cards will have a higher one.
How to redeem your credit card rewards
Earning rewards with the best credit cards in Canada is easy, but that’s only half the battle. Eventually, you’ll want to claim those hard earned rewards. How you do it will differ depending on the card and rewards program.
- Cash back – You’ll usually be paid out monthly, annually, or when you meet a minimum threshold. The cash back can be a statement credit or a cheque.
- Airline / hotel rewards – With co-branded airline and hotel credit cards, your points are typically deposited into your account at the end of each billing period. Once the points are in your account, you can use them anytime.
- General travel – How you use your general travel rewards points depends on the program. Some require you to book travel through their travel portal, while others allow you to redeem your points against any travel purchase.
- Store Rewards – When it comes to store rewards, you can get discounts on your purchases as soon as you you have enough points for the minimum redemption amount.
- Balance transfer – Although balance transfers aren’t technically a reward, it is sort of. Most credit cards that allow you to make a balance transfer typically require you to do so at the time of application or within 90 days of cardmembership.
How to choose a credit card
There are hundreds of credit cards in Canada. Since each of them has different features and rewards, it can be overwhelming to pick just one. That said, picking a card can become much easier when you look at the card requirements and features.
Most credit cards require you to have a fair credit score to be considered eligible to apply. If you are looking for a top-tier or premium credit card, they will likely require you to have an excellent credit score. For individuals with poor credit, you may have to start with a secured card to build your credit. From there, you can apply for non-secured cards with perks like rewards programs or cash back.
Your annual income may play a role in what credit card you can apply. Again, this varies by credit card. There are many on the market where there are no income requirements at all, but top-tier cards especially tend to have high income requirements. This can be individual income or household income.
Type of card
As discussed above there are several types of credit cards, ranging from student credit card to cash back credit card, travel credit cards and more. Consider what you are hoping to get from your credit card as well as your spending habits. For example, if you are someone who takes a lot of Air Canada flights, then it might be in your best interest to choose a co-branded Aeroplan credit card rather than a general travel card or hotel credit card.
Canada’s three credit card issuers are Visa, Mastercard, and American Express. It’s worth keeping in mind that Visa and Mastercard are more widely accepted than American Express, so before you choose, consider the places you shop the most and what they accept. You may also have a personal preference.
The annual fee of a credit card can range from $0 no-fee cards to options that cost hundreds of dollars. The more expensive credit cards have more perks and benefits and better rewards programs. It’s worth considering how much value you will get from the credit card. You want to make sure that, at the bare minimum, you get at least the value of the annual fee, ideally more.
Think about what kind of rewards would be most helpful to your lifestyle and would be the easiest for you to both earn and use. First consider whether you would like points or cash back. Then, consider your spending habits and how you can earn those rewards faster. For example, if you eat out a lot, you might want to find a card with accelerated earning rates for restaurants rather than grocery stores to earn your points or cash back faster.
A generous welcome bonus is a good incentive to apply for a credit card. Oftentimes, a welcome bonus will require you to spend a large chunk of money within the first couple of months of card membership. In this case, it’s best to time getting a new credit card when you have a big purchase to make.
As mentioned above, you want to choose a credit card that you can earn rewards with quickly so pay attention to the spending categories. Most credit cards have accelerated earn rates on specific categories. This could be grocery, restaurant, travel, entertainment purchases etc. Think about how you spend your money and choose the credit card that offers the higher earn rates for your spending habits.
Most credit cards have a few additional benefits. Typically, the more expensive the credit card the better the perks. Perks and benefits included with credit cards can include access to airport lounges, insurance coverage, Nexus discounts, discounts on rental cars, annual fee rebates, and more.
How to apply for a credit card
Now that you know what the best credit cards in Canada are and how credit cards work, it’s time to apply for one. There is some information to fill out, and the credit card provider will need to verify your information, but it’s a relatively straightforward process.
- Click apply now – Above, you’ll find the list of the best credit cards in Canada. Click apply now for the one you’re interested in. You’ll be taken to another page to verify the card’s details.
- Fill out the application – To apply for a credit card, you must provide personal information such as your name, address, social insurance number, and income.
- Wait for a response – Once you’ve submitted your information, your application will be processed. Some credit card providers will give you an instant response, while others may need 7 to 10 business days to come to a decision.
- Wait for your card – If you’re approved, your credit card will be mailed to you. Some credit card providers will give you a virtual card so you can use it right away.
- Activate your card – As soon as your card arrives in the mail, activate it. This is done by calling the number on the back of your card or logging into your online account.
Are credit cards worth it?
Credit cards can be incredibly helpful financial tools when used correctly. They are a great way to help build credit which will help in other areas of life, including renting an apartment or buying a home, leasing a car, or getting a loan. They also can be lucrative if you choose a rewards card. That being said, you do need to use them wisely and responsibly. Credit cards have incredibly high interest rates and when used incorrectly can lead to debt.
What is the best credit card in Canada?
This depends on your needs. If you are someone who travels frequently and is looking to earn rewards to use towards flights or hotels, then a travel card is your best option and something like the American Express Platinum card might be a great choice for you. On the other hand, if you are more of a homebody and would like to earn some cash back on your day-to-day purchases, then the PC Financial World Elite Mastercard might be the most lucrative. Don’t love the idea of paying an annual fee? Then stick to a no-annual fee option like the Tangerine Money Back Credit Card. There are so many credit card options out there it’s easy to find one to pick your needs.
What’s better, American Express, Visa, or Mastercard?
This is where you really need to consider your spending habits. American Express credit cards typically offer the best rewards and can be some of the most lucrative credit cards on the market. However, they are not as widely accepted as Visa or Mastercard. So, if the places you most frequently shop don’t accept it, then an American Express card isn’t going to be the best pick.
Visa and Mastercard and often considered to be ‘universally’ accepted, but even then it’s worth noting that only Mastercard branded credit cards are accepted at Costco. So if you are a big Costco shopper, it’s worth keeping that in mind.
In the end, it’s more important to choose a card that you qualify for and will get the most use of rather than stressing over which network provider to choose.
Do credit cards affect my credit score?
Yes, credit cards will impact your credit score. When used correctly credit cards can boost your credit score. However, if used improperly (ie: not paid off in time or in full), then they can have a negative impact on your credit score. Having a credit card requires responsible spending habits. If you aren’t sure you can use it properly, then it’s best to avoid or stick with a pre-paid card because not only can it impact your credit score, but misuse can also land you in debt.
How is credit card interest calculated?
Most credit cards in Canada have a purchase interest rate of 20% – 24%. If you’re always paying your bills in full and on time each month, then the balance transfer won’t matter.
But what about those people who can’t make the full payment? How is credit card interest calculated? To figure that out, you need to figure out a few things. Let’s assume the purchase interest rate is 22%, and you’re looking to buy a pair of shoes for $100. To calculate your credit card interest rate, you would do the following:
- Calculate your daily rate – You would take your card’s annual interest rate and divide it by 365 (the number of days in a year to calculate your daily interest rate. Using the example above, your formula would look like this
- 22% / 365 = .00060
- Get your daily interest accrual –You would now need to calculate your daily interest accrued on any unpaid balance. To do this, you multiply your daily interest rateby your average daily balance. In this case, we’re using the $100 pair of shoes exaple.
- .00060 X $100 = $0.06
- Find out how much interest you’re paying –Finally, you take your daily interest accrual and multiply it by the days in your billing cycle.
- $0.06 X 30 = $1.80
Paying $1.80 in interest may not seem like a big deal, but remember that most people typically have much higher balances. You’ll quickly be drowning in debt if you’re always carrying a balance and making minimum payments.
How do you pay off a credit card?
You can pay off your credit card online or via the app, over the phone, or even in person. For more details on how to pay off your credit card, including if your credit card is linked to a different bank, take a look at this post.
How many credit cards should I have?
This depends on your needs but Equifax recommends having 2-3 credit cards at a time. Multiple credit cards can be a good thing and come in handy, as long as you use them properly. If you have more, you might lose track and fall behind on payments which can impact your credit score.
How do you maximize credit card rewards?
Credit cards are an excellent way to manage your finances and earn rewards when used responsibly.
- Welcome bonuses – Welcome bonuses will always be the quickest way to earn points or cash back. Always keep an eye out to see what’s available as offers change regularly.
- Aim for accelerated rates – If your credit card gives you an accelerated rate on some categories, you should try to max them out since it’s an easy way to cash in.
- Maximize promotional rates – Since promotional rates are typically even better than accelerated rates, you should take full advantage of them.
- Sign up for more than one credit card – You can sign up for multiple credit cards to get more than one welcome bonus. This is known as travel hacking, leading to cheap luxury travel.
- Get to know your rewards program – Every rewards program is different. If you study the program, you can often find sweet spots where your points are worth more.