What are the best no fee credit cards in Canada? The best travel credit cards and best cash back credit cards in Canada are extremely popular, but most of them come with an annual fee. This isn’t a big deal if you believe the benefits are worth it, but what about credit cards with no annual fee, are they any good? The short answer is yes, but your options are much more limited.
The good thing is that some of the best no annual fee cards come packed with benefits and are usually the ideal card for specific situations. Read my guide on the best no fee credit cards now to find out which ones you should apply for.
|Credit card||Best for|
|American Express Green Card||Travel|
|Tangerine Money-Back Credit Card||Cash back|
|SimplyCash Card from American Express||Flat rate cash back|
|PC Financial World Elite Mastercard||Groceries|
|CIBC Aeroplan Visa Card||Aeroplan|
|Scotiabank SCENE Visa Card||Students|
|Wealthsimple Cash Card||No foreign exchange fees|
|MBNA True Line Mastercard||Low interest / Balance transfer|
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 best no fee credit card in Canada for travel is the American Express Green Card. You get 2 points per $1 spent on Amex Travel books, while all other eligible purchases get you 1 point per $1 spent. That works out to a 2% return on travel purchases. For a no fee card, you also get one of the better welcome bonuses of 10,000 American Express Membership Rewards points.
With American Express Membership Rewards, you can transfer your points to Aeroplan at a 1:1 ratio or Marriott Bonvoy at a 1:1.2 ratio. With Aeroplan, getting a value of at least 2 cents per point is not hard. As for Marriott Bonvoy, it does require a bit more work, but you can get good value there too.
Tangerine Money-Back Credit Card
- No annual fee
- 15% cash back up to $1,000 in spending ($150 cash back) for the first 2 months. Must apply by Sept. 30, 2022
- 2% cash back on up to 3 categories
- 0.5% cash back on all other purchases
People love the Tangerine money-back credit card since it allows you to select up to three categories of your choice, such as recurring bill payments, home improvements, and drugstore purchases, where you’ll earn 2% cash back. In addition, you’ll earn 0.5% in cash back rewards on all other purchases, which is why this is one of the best no fee credit cards. Plus, you get purchase assurance and extended warranty
The nice thing about the Tangerine Money-Back credit card is that you can have the cash back earned applied directly to your monthly statement or deposited into your Tangerine account. Note that Tangerine also introduced the Tangerine World Mastercard, which has a few additional benefits. Cash back is paid monthly into your Tangerine savings account or applied as a statement credit.
SimplyCash Card from American Express
- No annual fee
- 4% cash back on purchases for the first 6 months (up to $200 cash back)
- 1.25% cash back on purchases after the first 6 months
- Buyer’s assurance
- Purchase protection
While an increased earned rate for a cash back card is excellent, some people prefer the same earn rate on all purchases. That’s where the SimplyCash Card from American Express comes into play. You earn a straight 1.25% cash back on all purchases. There’s usually a welcome bonus where you earn increased cash back for the first 6 months of cardmembership, but once that promotional period ends, you get the standard 1.25% cash back.
As an American Express cardholder, you get access to American Express Experiences. That’s where you get exclusive invites to some of the hottest concerts, theatres, and sporting events. You also get Front of the Line access where you can purchase tickets before they go on sale to the general public.
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
The PC Financial World Elite Mastercard is ideal for people who collect PC Optimum points. Since PC Optimum points can be earned at grocery stores where President’s Choice products are sold, Shoppers Drug Mart and Esso gas stations, this card is extremely useful.
It takes 10,000 PC Optimum points to claim $10 in groceries which means you can earn up to 4.5% in points when using this card per $1 spent. That said, Shoppers Drug Mart often has bonus points redemption events where you can get even more value for your points. E.g. $140 for 100,000 points. In addition, if you sign up for PC Insiders, you can earn even more points. That’s pretty sweet for one of the best credit cards with no annual fee.
CIBC Aeroplan Visa Card
- No annual fee
- 10,000 Aeroplan points when you make your first purchase
- Earn 1 Aeorplan point per $1 spent on gas, groceries, and Air Canada
- Earn 1 Aeroplan point per $1.50 spent on all other purchases
f you want to earn Aeroplan points but don’t want to pay an annual fee, the CIBC Aeroplan Visa Card is the best choice. Your earn rate is 1 Aeroplan point per $1 spent on gas, groceries, and Air Canada purchases. All other purchases get you 1 Aeroplan point per $1.50 spent. That may not seem great, but this is a no fee card, so you shouldn’t complain too much. I personally value 1 Aeroplan point at 2 cents, so you could argue that this is one of the best Aeroplan credit cards. Travel accident insurance is also included with this card.
Scotiabank SCENE®* Visa* Card
- No annual fee
- 5,000 Scene+ points when you spend $750 in the first 3 months
- Earn 5 Scene+ points for every $1 you spend on credit card purchases at Cineplex™ theatres or at cineplex.com
- Earn 1 Scene+ point for every $1 you spend on your everyday credit card purchases
The Scotiabank SCENE Visa Card is one of Canada’s best student credit cards because it has no annual fee and allows you to earn Scene+ points. Those points can be used for discounts on travel, free movies, and discounts at participating restaurants, which are things many students love.
The earn rate is pretty generous if you watch a lot of movies. You’ll get 5 Scene+ points for every $1 you spend at Cineplex theatres or cineplex.com. All other purchases get you 1 point per $1 spent.
KOHO has quickly become one of the best prepaid credit cards in Canada. Although you won’t build your credit score when using this card, it does help you manage your money. So why is this one of the best no annual fee credit cards in Canada? Many people are attracted to the automatic saving goals and how the app can round up your purchases. You also get real-time updates whenever you spend so you can really understand where your money goes. If you use my referral link, you’ll get $20 for free when you sign up.
Wealthsimple Cash Card
- No annual fee
- 1% cash back on all purchases
- No foreign transaction fees on purchases
- No foreign transaction fees on ATM Withdrawals
- CDIC insurance protection
Without a doubt, the Wealthsimple Cash Card is the best no fee credit card without foreign transaction fees. The majority of Canadian credit cards charge you a fee of 2.5% whenever you make a purchase in any currency except with Canadian dollars. Not only does the Wealthsimple Cash Card, but they also don’t charge you FX fees when you use foreign ATMs. In addition, you’ll earn 1% cash back on all your everyday purchases with no cap. Wealthsimple is available to all residents of Canada, including Quebec residents.
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 worried about interest rates should consider the MBNA True Line Mastercard since the purchase interest rate is 12.99% While that’s still high, it’s much lower than traditional cards that charge 20% – 22%. Cardholders will also be happy to learn that balance transfers are available, but only within 90 days of account opening. The balance transfer rate is 0% interest for 12 months, but note that there is a 3% balance transfer fee. Once you pass the promotional period, the interest rate becomes 12.99% APR.
What is a no fee credit card?
A no fee credit card is a credit card that doesn’t charge an annual fee. Unlike premium credit cards that often give you a generous welcome bonus when you spend a certain amount within three months of cardmembership, no fee cards typically have no or a limited welcome bonus. In addition, no fee cards typically have limited additional benefits.
That said, some premium credit cards have promotions where the annual fee is waived for the first year. That means you can test out the card for a year without paying any fees. That’s quite the incentive since you can get incredible benefits such as insurance coverage for car rentals and an increased earn rate on dining with select cards.
Keep in mind that no-fee credit cards aren’t entirely free. Interest charges will be paid if you’re not paying off your full balance each month. You could also incur cash advance and foreign transaction fees.
Why get a no fee credit card?
If you’re looking at the list of the best no fee credit cards in Canada, you obviously don’t want to pay an annual fee. Although paying $99 – $150 a year for a credit card can be beneficial, for a lot of people, it’s not worth it. If you don’t use your credit cards regularly or if you don’t think you’ll be able to use the additional benefits, then getting a no fee credit card makes sense.
Do no fee credit cards earn rewards?
Many of the best no fee credit cards in Canada earn you rewards. The type of rewards you’ll earn depends on the type of card you get. Generally, you can break down rewards into three categories:
- Travel – With travel rewards, you’ll earn points or miles, which can then be redeemed for free or discounted travel. Aeroplan, Air Miles, and American ExpressMembership Rewards are the most popular travel rewards programs.
- Cash back – Cash back cards are easier to understand than travel rewards since you’ll earncash back on all your purchases. Best of all, some bonus categories will give you an increased earn rate.
- Store and retail – A few stores have their own loyalty program or are partnered with a loyalty program where you can earn rewards points. The points you earn can later be used for discounts, merchandise, gift cards, and more. Some retail loyalty programs include PC Optimum and Scene+.
Advantages of a no fee credit card
Besides not having to pay an annual fee, no fee credit cards can be useful for many reasons including:
- Building your credit history – Your credit score is important if you ever want to get a loan in the future. Using a no fee credit card and paying your bills in full and on time will show lenders that you’re creditworthy.
- You can make purchases – You can obviously make purchases with any credit card, but a no fee credit card is best suited for people who don’t use credit often. Get a no fee card and keep it in your wallet so you can access credit when needed.
- It can be a backup card – If you already have one of the best travel credit cards in Canada, then getting one of the best no fee credit cards in Canada can complement your spending. For example, American Express isn’t accepted anywhere so you can use your no fee card instead.
Disadvantages of a no fee credit card
While there’s no denying the advantages of a no fee credit card, there are also some disadvantages to consider.
- Mediocre welcome bonuses – Don’t expect the sign up bonus to be anything spectacular.
- Lower earn rate – A 50% decrease in earn rate compared to premium credit cards isn’t uncommon and applies to cash back and travel rewards cards.
- Fewer benefits – You typically get limited benefits with no fee cards. It’s unlikely you’ll get things such as extended travel medical insurance, mobile device insurance, lounge access or travel credits.
Are credit cards with an annual fee better?
Some people are totally against the idea of paying an annual fee for a credit card, but the benefits typically far exceed what you’re paying. That said, premium credit cards can chance an annual fee of $120 to $699, so it is a healthy amount to be paying.
You need to ask yourself, how much value are you getting from the annual fee? For example, many travel rewards credit cards come with comprehensive travel insurance. That benefit is typically worth $300 a year, which is much more than a card that has an annual fee of $120 – $150.
Even the American Express Platinum Card, which has an annual fee of $699, pays for itself since you get perks such as unlimited lounge access, hotel status upgrades and more.
As long as you can extra more value out of the benefits provided than what you’re paying in annual fees, you’re coming out ahead.
Who should get a no fee credit card?
There are a few scenarios where getting one of the best no fee credit cards in Canada makes sense. In the end it depends on your situation, but consider the following:
- You want to minimize your costs – Since no fee credit cards won’t cost you anything and you still get access to credit, they can be a great tool to help you manage your finances.
- You need a back up credit card – Many people have a primary credit card but keep a backup card in their wallet just in case. This is handy if the merchant does not accept your main card’s credit card issuer (Visa, Mastercard, or American Express).
- You don’t use credit much – There are some people that prefer to use cash or their debit card. That said, having a no fee credit card in your wallet can help in case you need to make a purchase where only credit is accepted.
- You want to build your credit score. Using your credit card responsibly will help you improve your credit score.
No fee credit cards can be useful, but they come with limited benefits. If you get one, always pay your bills on time and in full, so you don’t incur any interest charges. That said, paying an annual fee can be worth it since the welcome bonus and annual perks are almost always worth more than the fee you pay.