A credit card allows you to borrow money from a lender to make purchases, which you then must repay over time.
Here are 4 of the best credit card options for Canadians.
Earn up to 30,000 Membership Rewards points in your first year. Conditions apply.
You can redeem your points for various rewards, including travel expenses, gift cards, merchandise, Ticketmaster purchases, and statement credits. You can also transfer your points to loyalty programs like Aeroplan and Marriott Bonvoy. Or you can apply them directly for everyday purchases such as groceries and gas (1,000 points = $10 for all eligible purchases).
The card offers these benefits:
- Access to bonus rewards and special events through the Cobalt Perks program
- Hotel perks, such as room upgrades, at over 600 hotels and resorts in over 30 countries
- Access to presale tickets for concerts, theatre products, and other special events
- Exclusive offers on dining, shopping, entertainment, and wellness events and activities through American Express Experiences
As a cardholder, you automatically qualify for ten types of insurance, including:
- Emergency medical insurance
- Flight delay insurance
- Hotel burglary insurance
- Travel accident insurance
- Mobile device insurance
The card charges a monthly fee of $12.99, with an interest rate of 20.99%
Eligibility requirements include being a Canadian resident and the age of majority in your province or territory.
- 5 points for every $1 you spend on restaurants and food delivery
- 3 points for every $1 you spend on streaming subscriptions
- 2 points for every $1 you spend on travel and transit
- 1 point for every $1 you spend on all other purchases
Additional Cardholder Fee: $0
American Express does not maintain the accuracy of the information on this page. Please visit Americanexpress.com/ca for the most current information.
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®The American Express logo and other trademarks are the property of American Express or its subsidiaries.
The following Visa Infinite* benefits accompany the card:
- Concierge Service – access to a personal assistant 24/7 to help you with errands like booking restaurant reservations or planning your trip
- Hotel Collection – receive the best available rates during your overnight stays, automatic room upgrades when you arrive, and free Wi-fi.
- Dining and Wine Country program – attend exclusive dining events at first-rate restaurants and enjoy multi-course meals, wine pairings, interactive experiences with chefs, and more.
You qualify for a 25% discount on car rentals through participating Avis and Budget locations when you pay using your card.
An extensive suite of insurance products is included with the card, including:
- Mobile device insurance with coverage for up to $1,000
- Trip cancellation and trip interruption insurance with coverage for up to $2,000 per person (maximum of $10,000 per trip)
- Travel emergency medical insurance with coverage provided for up to 15 consecutive days
The annual fee is $120, and the interest rate is 20.99%
Eligibility requirements include a minimum annual personal income of $60,000 or $100,000 for a household.
- 4% cash back for every $1 you spend on groceries, recurring bill payments, and subscriptions
- 2% cash back for every $1 you spend on gas and daily transit
- 1% cash back for every $1 you spend on all other purchases
Additional Cardholder Fee: $50
Scotiabank does not maintain the accuracy of the information on this page. Please visit Scotiabank.com for the most current information.
All images and trademarks are property of their respective rights holders.
®The Scotiabank logo and other trademarks are the property of Scotiabank or its subsidiaries.
*Visa and Visa Infinite are trademarks of Visa International Service Association
10% cash back for the first 4 months at restaurants and bars up to $500 spend and 9.99% interest on purchases for the first 3 months. Conditions apply.
You can add up to 3 extra cards to your account, allowing you to collect cash back rewards faster. Your cash back is applied as a statement credit annually every January.
The card comes with several features to make your everyday transactions easy, convenient and secure to complete:
- Click to pay. There’s no need to enter your password or 16-digit card number to complete online purchases - simply select the Click to Pay button, and you're done.
- Fraud protection. Get real-time alerts of suspicious activity on your card.
- International money transfer – You’ll pay no transactions or interest on funds you send abroad, provided you pay your balance by the due date.
- Digital wallet compatibility. Add an extra layer of security to your purchases by integrating your card with Apple Pay, Google Pay, or Samsung Pay.
In addition, you automatically qualify for purchase protection insurance (coverage for up to 90 days) and extended warranty protection (coverage for up to one extra year).
There’s no annual fee, and the interest rate is 19.99%.
Eligibility requirements include a minimum annual personal income of $15,000.
- 4% on restaurant purchases, up to $5,000 per year
- 1.5% on groceries, gas, and drugstore purchase and recurring bill payments, up to $15,000 per year
- 0.5% on all other purchases
Additional Cardholder Fee: $0
Simplii FinancialTM does not maintain the accuracy of the information on this page. Please visit Simplii.com for the most current information.
All images and trademarks are property of their respective rights holders.
TMThe Simplii Financial logo and other trademarks are the property of Simplii Financial or its subsidiaries.
*Visa and Visa Infinite are trademarks of Visa International Service Association
There’s a variety of ways for you to use your points. You can redeem them for hotel stays, flights, merchandise, gift cards, vacation packages, and more.
If you link the card with your Journie Rewards card, you can save up to 10 cents per litre on fuel purchases at participating gas stations. There are also no transaction fees to pay for sending money abroad, provided you pay your balance in full by the due date.
The card offers a valuable suite of insurance products, including:
- Flight delay and baggage insurance
- Emergency travel medical insurance
- Car rental collision and damage insurance
- Mobile device insurance
- $500,000 common carrier accident insurance
The annual fee is $139, but it's waived if you have a CIBC SmartTM Plus Account. The interest rate is 20.99%
Eligibility requirements include a minimum personal income of $60,000 or $100,000 for a household.
- 2 points for every $1 spent on travel purchases via the CIBC Rewards Centre
- 1.5 points for every $1 spent at gas stations, grocery stores, and drug stores
- 1 point for all other purchases
Additional Cardholder Fee: $50
CIBC does not maintain the accuracy of the information on this page. Please visit CIBC.com for the most current information.
All images and trademarks are property of their respective rights holders.
®The CIBC logo, Aventura and other trademarks are the property of CIBC or its subsidiaries.
*Visa Infinite is a trademark of Visa International Service Association
TM NEXUS Official mark and/or trademark of Her Majesty the Queen in Right of Canada
What is a Credit Card?
An credit card is a debt instrument issued by various financial institutions, particularly banks and credit unions.
There’s a variety of credit cards to choose from in Canada, but keep in mind all credit cards work in much the same way.
When you use a credit card to pay for a purchase, you draw the money from a credit facility provided by your card issuer.
Since this amounts to a loan, you must repay the money owed at a future date, along with any interest charges and applicable fees.
An credit card is a revolving credit product.
When you contribute a payment toward your outstanding balance, those funds are available for you to spend again.
Each credit card comes with a pre-set credit limit, which is the maximum balance you can carry at any one time before needing to make a payment.
You must make regular payments against your credit card balance like you would with another bill.
Once your card’s billing cycle ends, which lasts 28 to 31 days, your card issuer will send you a statement that contains the following details:
- A list of transactions processed for the period
- Fees and interest charged to your account, if applicable
- Your available credit limit
- Payment due date
- Minimum payment due
You must pay at least the minimum payment noted by the due date to keep your account in good standing.
If you fail to do so, your card issuer will report your payment as late to the credit bureaus, resulting in a downgrade to your credit score.
If you pay your balance in full by the due date, you won’t get hit with any interest.
Conversely, any amount you carry forward into the next billing cycle will incur interest charges.
To acquire an credit card, you’ll need to apply with your card issuer.
As part of their due diligence, the card issuer will assess your credit report to determine the risk of extending credit to you.
Some issuers will also consider other aspects of your finances when evaluating your application, such as your income and debt-service ratios.
As mentioned, an unsecured credit card doesn’t require you to place a cash deposit or pledge a personal asset as collateral.
As a result, your card’s outstanding balance is secured only by your general creditworthiness or promise to pay back the amount owed.
Did You Know?
Companies outside the financial services industry also offer credit cards, such as Canadian Tire and Walmart.
Benefits of a Credit Card
Here are some key benefits credit cards offer:
1. Convenience and Flexibility
When you’re short on cash, you can always rely on your credit card to bail you out, especially during a financial emergency like an unexpected and overwhelming medical bill.
Credit cards are a universally accepted payment method, so you can use them almost anywhere.
Plus, you don’t need to carry large sums of cash.
2. Credit Building
Using a credit card responsibly can help you establish or repair your credit score.
Your credit score helps you borrow more significant amounts of money in the future for larger purchases that will require a car loan or mortgage.
3. Rewards Programs and Other Perks
A wide variety of credit cards exist and many are notable for their rewards programs, which allow you to redeem points you earn for cash back, merchandise, travel costs, and more.
Many brands offer perks like purchase protection, extended warranties, airport lounge access, and optional products such as balance protection.
Drawbacks of a Credit Card
Despite their benefits, however, it’s wise to be mindful of the drawbacks associated with credit cards:
1. Risk of Debt Problems
You can quickly accumulate a mountain of debt using an card to the point where you become financially overwhelmed and struggle to keep up with payments.
In the worst-case scenario, your only option to extinguish the debt may be to file for bankruptcy.
2. High Interest Rates
Card issuers routinely charge a high-interest rate on any balance you fail to pay off by the due date.
The average rate is around 20%, but it can also be as high as 30%.
Risk of Damage to Credit Score
If you fail to make timely payments against your balance, your credit score will decline.
The same outcome applies if you continuously maintain a high credit utilization ratio, meaning you use a large portion of your available credit.
Alternatives to Credit Cards
Having trouble getting approved for a credit card? Here are some alternative options to explore:
1. Consider starting with a secured card
A secured credit card functions like its unsecured counterpart but with one key difference: you need to provide a cash deposit before using it, as security for the lender.
The deposit determines your credit limit and gives your card provider the right to seize the funds should you default on your payment obligations.
2. Become an authorized user on another account
Most credit cards allow the cardholder to add additional users to their account.
If a trusted family member or friend adds you as an authorized user, you’ll receive access to a card that’s linked to their account.
As a result, you can actively use it to make purchases without meeting the lender’s eligibility criteria.
3. Apply for a retail card
Some retailers partner with banks and card networks to issue credit cards of their own.
Retail credit cards can net you discounts on purchases and earn you points through loyalty rewards programs that you can redeem for merchandise or cash back.
Retailers generally have relaxed eligibility requirements when it comes to credit scores, so you’ll face fewer hurdles when applying for one compared with regular cards.
4. Get a student card
Student credit cards cater to individuals pursuing their post-secondary education.
Like retail credit cards, they have less stringent eligibility requirements, so there’s a good chance you’ll get approved for one.
Don’t Forget!
Making timely payments on a credit card account where you’re an authorized user will neither improve nor harm your credit score.
Frequently Asked Questions
- What credit score is needed for a credit card?
