Rogers Connections Mastercard review
The Rogers Connections Mastercard is a low-fee Mastercard that’s best suited for Rogers customers and those who regularly shop or travel in the US.
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Credit cards for bad credit
Learn how you can qualify for a credit card with bad credit and compare your options to find the best card for your needs.
There are several different types of credit cards for bad credit in Canada if you’re struggling to qualify for an unsecured credit card. Just be aware that you may need to put some money down up front to secure your balance. Learn more about how you can get a credit card with bad credit in Canada, compare cards to find the best fit for you, and learn how having a credit card for bad credit can help you improve your credit score.
What are credit cards for bad credit?
Credit cards for bad credit are specialized cards that you can qualify for even if your credit score is below 600. There are several types of bad credit credit cards in Canada to choose from. These include secured, prepaid and authorized user credit cards. Unfortunately, it can be very difficult to get a regular unsecured credit card if you have bad credit, though your eligibility could depend on your relationship with your bank and how much you have in savings.
What’s considered bad credit in Canada?
Credit scores range from 300 to 900 in Canada. Many lenders consider credit scores that fall below 600 as bad or poor credit scores. A lower credit score may lead you to have difficulty in qualifying for loans or credit cards, and you could get stuck with higher interest rates and fees on any financing you do manage to qualify for.
3 types of credit cards for bad credit in Canada
You may want to consider the following types of credit cards for bad credit in Canada:
1. Secured credit cards
Secured credit cards let you borrow money against a pre-established credit limit that you fund with your own money. You put down a deposit up front and you can borrow up to that amount to make purchases. Your provider can use your deposit to pay off your balance if you default on your payments. Most secured credit cards charge interest and an annual fee, and you’ll only get your deposit back when you pay your card off in full and close your account.
Compare secured credit cards for bad credit in the table above
2. Prepaid credit cards
Prepaid cards are available from banks, private companies and grocery stores. These work a bit like gift cards because all you need to do is load money onto the card and start spending. When that money runs out, you can load in more to make purchases as you see fit. These cards don’t charge interest or come with rewards and they won’t help you build credit.
Compare prepaid credit cards for bad credit
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3. Authorized user credit cards
If you’d like direct access to credit, you may want to consider becoming an authorized user on a friend’s or family member’s account. This will let you spend money on their card even if you have bad credit and can’t qualify for your own. Just be aware that the benefits and rewards on the card will stay in the primary cardholder’s name so you may not be able to take full advantage of the card’s perks.
Compare credit cards that allow you to sign up as an authorized user
How to compare bad credit credit cards in Canada
Compare the following features to find the best Canadian credit cards for bad credit:
- Type of credit card. Think about which type of bad credit credit card will work best for you. Choose a prepaid card or sign up as an authorized user on someone else’s account if you simply want to shop online. Select a secured credit card if you want to build up your credit score.
- Interest rates. Most credit cards for bad credit come with a 19.99% interest rate for purchases and 21.99% for cash advances. You may be able to find a lower interest rate credit card if you shop around but you’ll have to sacrifice rewards and/or benefits to take advantage of lower rates in most cases.
- Annual fees. You may have to pay fees to qualify for secured credit cards for bad credit. These fees can range from $20 to $120 per year, depending on the card. Aim for a card with a low fee to make sure you’re not cutting into your savings to build up your credit.
- Rewards. Some secured credit cards for bad credit will let you earn a small return on rewards or cash back when you make purchases. One example of this type of card would be the TD Cash Secured Credit Card, which lets you earn cash back on eligible purchases. Look for a card that gives you the best return on rewards for the lowest fee.
- Eligibility criteria. It’s usually possible to qualify for most bad credit credit cards as long as you’re the age of majority in your province and a permanent resident of Canada. That said, you’ll need to check specific criteria with your provider before you apply to make sure you’re eligible.
- Provider. When deciding on credit cards for bad credit in Canada, you can choose from many providers. Only apply for credit cards that have positive online reviews and come from an establishment you trust, especially if you have to send money in advance to secure your credit card balance.
Who can qualify for credit cards for people with bad credit?
You’ll usually need to meet the following criteria to qualify for credit cards for people with bad credit:
- Be 18 years old or the age of majority in your province or territory.
- Be a Canadian citizen or a permanent resident with a valid Canadian address.
- Have a working bank account (this is sometimes not a requirement – it varies between providers).
Not a Canadian citizen? Find out what credit cards you can qualify for as a temporary resident
How to get a credit card with bad credit in Canada
You can follow these steps for how to get a credit card with bad credit in Canada:
Compare credit cards for bad credit in Canada. Compare credit cards for people with bad credit from several providers to find the one that best suits your needs.
Apply for the card of your choice. Apply for the credit card of your choice by visiting the main site of the provider you’re interested in.
Fill out application details. Provide personal information such as your full name, address, email and phone number to start your application.
Review the fine print. Review the details of your contract to make sure you understand and can abide by the terms and conditions of your card.
Click submit. Click submit on your application and send money to your provider if you need to preload funds onto your account to set your credit limit.
Tips for applying
You can employ the following tips to increase your chances of getting approved for bad credit credit cards in Canada:
- Find out your credit score. Contact Equifax or TransUnion to see your credit score so that you know which cards you can qualify for.
- Check eligibility criteria. Double check eligibility criteria for the card you’re interested in such as minimum income, age, credit score and residency status requirements.
- Organize your paperwork. Find out what documents you need to have organized in advance (such as pay stubs and residency papers) and make sure you’re ready to submit your application when the time comes.
What should I do once I get my card?
For secured credit cards, you’ll want to commit to making timely payments because this is how you’ll increase your credit score. Mark your calendar, set reminders on your phone and set up automatic withdrawals from your bank account to avoid running late on payments.
You may also want to create a budget for spending and make sure you stick to it each month. Working on your financial habits in general can help you build your credit score so that you don’t fall back into debt when you’re ready to graduate to an unsecured credit card.
Bottom line
There are many credit cards for bad credit in Canada to choose from if you’re struggling to qualify for an unsecured credit card. These include secured, prepaid and authorized user credit cards. Find out how each type of credit card works, and compare credit cards for people with bad credit quickly and easily to find the best fit for your needs.
Frequently asked questions about credit cards for bad credit
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