BMO Preferred Rate Mastercard®* Review

**This post may contain affiliate links. I may be compensated if you use them.

Low interest credit cards aren’t as sexy as travel or cash back credit cards, but they’re clearly the best choice for people who have debt. Why would you pay 19.99%+ interest to earn rewards or cash back when you can save much more immediately by getting a low interest credit card?

It makes no sense which is why a card such as the BMO Preferred Rate Mastercard®* is perfect for people who are trying to reduce their debt or typically carry a credit card balance. How is this possible? Read my BMO Preferred Rate Mastercard®* review and find out.

BMO Preferred Rate Mastercard Review

BMO Preferred Rate Mastercard®* benefits

  • $20 annual fee – First year free*
  • 3.99% introductory interest rate on balance transfers for 9 months with a 1% transfer fee
  • 12.99% interest rate for purchases and cash advances
  • Purchase protection
  • Extended warranty

The BMO Preferred Rate Mastercard®* is one of the best low interest credit cards in Canada since the annual fee of $20 is waived for the first year and you get a 3.99% introductory interest rate on balance transfers for 9 months.

If you choose to do the balance transfer, there’s a 1% transfer fee that applies. For example, if you choose to balance transfer $1,000, the fee you would pay is $10. Some people may not like the idea of paying a fee for a lower interest rate, but you need to think big picture. The balance transfer interest rate is 3.99% which is significantly lower than the average credit card interest rate of 19.99%. Paying a little money upfront is well worth it since you likely pay much more in interest charges if you didn’t change cards.

Even if you can’t pay your entire balance during those 9 months, your interest rate only goes up to just 12.99% which is still 7% lower than most credit cards. That can go a long way in helping you manage your debt.

Since this is a low interest credit card, you only get a few additional benefits, but they’re great. Purchase protection insures your goods for 90 days from theft, damage and loss. That’s right, as long as you pay for the entire purchase with your BMO Preferred Rate Mastercard®*, you’re covered for almost three months.

The extended warranty is also appealing since it doubles your manufacturer’s warranty up to one additional year. This is handy since purchasing extended warranty can sometimes be expensive. Similar to purchase protection, you must charge the entire amount of the purchase to your BMO Preferred Rate Mastercard®* to get the extended warranty. Be sure to save your receipt in case you need to make a claim!

How the BMO Preferred Rate Mastercard®* compares to others

There’s a lot of competition when it comes to low interest credit cards. The American Express Essential Card has no annual fee and 1.99% interest rate on balance transfers for the first 6 months. Once the promotional period ends, the interest rate goes up to 12.99%.

At first glance, the American Express Essential Card is a better choice, but that’s only if you know you can clear your debt in 6 months. The slightly higher balance transfer rate of 3.99% with the BMO Preferred Rate Mastercard®* may be better for some people since you get it for 9 months. Also, it’s fair to say that the BMO card is accepted at more merchants so it might be the better choice if you plan to do additional spending.

There’s also the MBNA True Line Mastercard that has a 0% interest rate on balance transfers for the first 10 months. The card has no annual fee, but you need to pay a 3% fee for your balance transfer. You need to do your math to see if it’s worth it for you.

Final thoughts

My BMO Preferred Rate Mastercard®* review is positive. This card is perfect for those who are looking to eliminate their debt quicker or for those who normally carry a balance on their credit card. The annual fee is waived for the first year and the balance transfer option is great which is why it’s one of the best BMO credit cards.

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BMO Preferred Rate Mastercard®* Review

About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

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