Compare credit cards in Canada easily with Finder’s free comparison service. Our editorially independent team has created this comprehensive guide to help you select the right credit card for your financial needs and lifestyle.
How do credit cards work?
Credit cards are basically a type of unsecured loan where you borrow money up to a set amount from the credit card provider in order to pay it back at a later time. You’ll have a minimum of 21 days to repay the balance before you’ll start to incur interest – with some cards offering up to 55 days interest-free.
Credit cards are different from debit cards because they aren’t tied to actual money in your chequing account. While banks are the first place most people will go for a credit card, there are many credit unions, stores, supermarkets, airlines and stand-alone credit card companies that issue credit cards too.
A wide range of credit cards exist on the market, including cash back, balance transfer, rewards, travel, no annual fee, no foreign transaction fee, student, business and many others. The right credit card for you will often depend on your lifestyle and your financial goals. There are also prepaid cards on the market, which give you the convenience of a paying with plastic without going into debt.
A beginner’s guide to credit cards
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Rewards
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Cash back
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No Annual Fee
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Low rate
How to apply for a credit card
1. Figure out what you want and need
Think about what you will use your credit card for, how often you plan to use it and which rewards and perks are of interest to you. Consider balance transfer offers, interest rates, annual fees and rewards when you compare credit cards. Compare different types of credit cards to find the one that suits your needs best.
2. Shop around
There are hundreds of credit cards on the market. Once you’ve narrowed down your options to the type of credit card you’re interested in, compare eligibility requirements and other features like interest rates, annual fees and rewards programs.
3. Fill out the application
Once you’ve picked a card, apply online and follow the steps to complete the application. You’ll need to provide personal details including your contact details, income and your Social Insurance Number (SIN). Many credit cards offer near instant approval – which means you could know within 60 seconds or less whether you’ve been approved for the card or not.
4. Get approved and receive your card
Once you’ve been approved for your new credit card, you should receive it in the mail within 7-14 days. Clear instructions will state whether you need to call to activate your card or whether you can login to your online banking.
Which type of credit card are you looking for?
Shop for credit cards by provider
Have a particular provider in mind? We’ve rounded up a list of popular credit card providers in Canada in the table below. Click on the logo to get more information on each provider’s suite of credit cards.
| Credit card provider | Types of credit cards offered | Popular credit card option |
|---|---|---|
 Scotiabank credit cards |
| Scotia Momentum Visa Infinite CardRead ReviewApply now |
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| BMO AIR MILES World Elite MastercardRead ReviewApply now |
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| HSBC +Rewards™ Mastercard®Read ReviewApply now |
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| American Express Cobalt CardRead ReviewApply now |
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| Tangerine Money-Back Credit CardRead ReviewApply now |
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| Capital One Guaranteed MastercardRead Review |
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| RBC Rewards+ Visa CardRead Review |
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| TD Rewards Visa CardRead Review |
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| CIBC Aventura Visa Infinite CardRead Review |
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| MBNA True Line Gold MastercardRead Review |
How to compare credit cards in Canada
To help you find the right card for you, there are a few factors to consider when you compare credit cards and your various options.
- Your income. This is one of the biggest factors as credit card providers want to know you’re able to pay back your debt. Generally speaking, the higher your income (not necessarily from employment), the more likely you are to get approved.
- Your credit score.Your credit score will play a big role in the type of credit cards available to you. The higher your credit score, the better the terms and rates that you’ll get. A score of 650 is often considered the “magic number” to get approved for a standard credit card.
- Your age. You need to be at least 18 (or the age of majority in your province or territory) to apply for a credit card. If you’re young, you’re likely to have a limited credit history. You could consider student credit cards that will improve your credit score over time and qualify you for better deals.
- Your personal interests. Some credit cards offer rewards that may compliment your lifestyle and interests. If you travel overseas, an Air Miles, Aeroplan or travel credit card might be a good choice. If you frequently buy gas at a specific gas station, you could take advantage of a credit card that offers discounts.
- Your financial situation. It’s not ideal to get credit cards just to fill the gap between income and expenses. Debt from credit cards can spiral out of control if the outstanding balance is not paid back regularly. Credit cards should instead be used to help you achieve your financial goals. For example, if you need to make a big purchase that you want to pay off over time, low purchase interest credit cards could help you do this without having to pay extra in interest.
Compare credit cards you can apply for now
6 Important credit card terms and features to look out for
To get the most out of the process when you compare credit cards and ultimately choose the right one for you, it is important to understand the different features that are included within credit card deals.
1. Credit limit
Your credit limit is the maximum amount you can spend on your credit card at any one time. Your limit is calculated by the card provider and will depend on various factors including your credit score and your annual income.
What happens when you go over your limit will vary depending on your card issuer, but at a minimum, you’ll usually be charged an additional fee and your credit score will be affected. Other penalties might include increased interest rates, reduced credit limit and freezing your credit card until your balance is back within the maximum amount allowed.
2. Credit card fees
Many credit cards charge an annual fee, however some providers might waive the fee for 12 months as part of a signup deal.
A balance transfer fee is levied when you transfer your balance from one credit card to a new one and is a percentage of the transfer amount. This rate is usually between 1% and 3%, but can be as low as 0% on some cards.
Additional fees are also levied when you withdraw cash from an ATM, exceed your credit limit and use your credit card overseas.
3. Interest rate
The interest charge on a credit card will be shown as the APR. APR stands for Annual Percentage Rate and is the amount you’ll pay to the card issuer on top of the money you borrow. The APR includes the interest rate as well as any fees and is averaged out over 12 months.
You’ll only pay interest if you don’t pay off your balance in full before the end of the interest-free grace period.
4. Grace period
Credit Cards often carry an interest-free grace period during which no interest will be charged on an outstanding balance. It can also be seen as the period from when the billing cycle closes to when the outstanding amount is due on that bill. The period varies greatly between card issuers and can be anything from 21 days to 55 days.
You’ll benefit from grace periods if you pay your balance off in full every month as it’s only applicable on new purchases and, in most cases, not available on cash advances or balance transfers.
5. Security
Credit cards are secured by a CHIP and PIN system for physical payments and by a 3 digit security code for online payments. If a fraudulent transaction does occur, your bank or credit provider has to refund you unless they have an adequate reason for refusing such a refund.
You can also get protection for any purchases you make up to 90 days usually with purchase protection.
6. Rewards
Rewards credit cards are a good way of getting compensated for making purchases with your credit card. The type of rewards will vary but may include cash back, miles and rewards points.
These rewards will either pay you back a percentage of your purchase at particular retailers or reward you in points for discounts and vouchers.
Eligibility criteria for credit cards
To apply for a credit card, you’ll need to make sure you meet the eligibility criteria. Just like with any other loan application, there’s no guarantee that the application will be approved. While eligibility criteria can vary between specific credit cards, it usually includes the following:
- Age. Be at least 18 years of age, or the age of majority in your province or territory. If you’re under 18, you can usually become an authorized user on a parent or guardians credit card.
- Residency. Be a Canadian citizen or a permanent resident with a Canadian residential address. However, some providers offer cards to temporary residents or those on certain visas – but either way you’ll need a Canadian address.
- Credit score. Many credit cards have a minimum recommended credit score that you must meet in order to be eligible for approval. While it varies between cards, the average minimum credit score tends to sit around 650.
- Income. Some credit cards will require that you make a certain amount of money each year in order to qualify. Minimum annual income usually sits around $12,000, while more prestigious cards can require minimum personal incomes of $60,000 – $80,000 a year.
How much do credit cards cost?
- Repayments. You’re free to repay as much as you like as often as you like. You’re required to make the minimum repayment when your statement is issued. The minimum repayment is usually 2% or $10 of your outstanding balance. You will pay a late payment fee if you don’t make the minimum repayment by the statement due date.
- Annual fee. This is the cost to own a credit card. The annual fee ranges from $0 to hundreds of dollars depending on the credit card type. The credit card annual fee is typically deducted from your available credit and accrues interest at the purchase rate if it isn’t paid in the first statement period.
- Interest rates. Interest is the price you pay to borrow money. Credit card interest rates are much higher than other types of financing because credit cards are an unsecured product; financial institutions have no recourse to take your assets if you default on your repayments.
- Other fees. Other fees you may run into include late payment fees, over limit fees (a fee for spending more than your credit limit), rewards program membership fees and cash advance fees. If you’re doing a balance transfer, you will also likely incur a balance transfer fee.
How many credit cards should I have?
There are technically no limits to how many credit cards you’re allowed to have in Canada. That being said, a general rule is that you should have at least two credit cards – preferably from two different providers (like Visa and Amex, for example). The reason you want at least two cards is to make sure you always have a backup in case you find yourself in an emergency situation and one of your credit cards doesn’t work unexpectedly.
You should make sure that you pay off your balance in full each month so you don’t end up racking up debt on multiple cards. And if you are practiced at using credit cards responsibly, you might want to consider getting more than two credit cards so you can take advantage of multiple rewards programs.
10 common credit card mistakes and how to avoid them
1. Paying interest
If you spend more than what you can pay off each month, you will be charged interest on your purchases – and interest is just money down the drain. Interest compounds quickly, meaning that if you’re not careful, it doesn’t take long to get into unmanageable debt with a credit card.
- How to avoid: Pay off your entire statement balance each month. This way you can enjoy the perks of a credit card without the unnecessary expense of interest.
2. Making cash advance transactions
When you take cash out of an ATM or make gambling transactions on your credit card, you will likely face a cash advance fee and specific interest rate. This higher interest may be higher than the purchase rate and is usually charged from the day you make the transaction.
- How to avoid: Unless it’s an emergency, don’t use your credit card for cash advance transactions. If you have to in an emergency, pay it off as quickly as you can to avoid paying more interest.
3. Spending for rewards
Credit cards entice you to spend more money since they reward you with bonus points, miles or cash back for your spending. It’s tempting to buy things you don’t need or haven’t budgeted for when points or cash back are in the picture.
- How to avoid: Buy what you need and what you’ve budgeted for. If you’re paying more for the card than what you’re earning in rewards, consider a card more suited to your budget and spending style.
4. Holding too many credit cards
Not only can you easily lose track of your spending, but your overall creditworthiness will be reduced, meaning other lenders may be reluctant to loan you money when you really need it.
- How to avoid: Choose which credit cards serve you best and cancel the rest. You’ll be able to keep track of your spending better and make the most of your cards related perks.
5. Maxing out your credit card
Spending right up to your credit limit can make you look like a risky borrower and may decrease your creditworthiness and cost you overdraft fees.
- How to avoid: You don’t have to wait for your statement to arrive to pay off some – or all – of your balance. Pay some of it down before you add more charges to keep you from maxing out.
6. Keeping a high-interest debt
If you’ve racked up credit card debt and are struggling to pay it off, keeping it on a high-interest rate credit card can cost you an unnecessarily high amount in interest.
- How to avoid: Transfer your high-interest debt to a new credit card that offers low interest on balance transfers for a specified period of time. You’ll save big on unnecessary interest charges.
7. Not immediately reporting a lost or stolen card
If you’ve misplaced your credit card or suspect it may have been stolen, it is your responsibility to take action. Not doing so could at best create a major headache, or at worst leave you liable for some or all of the fraudulent transactions.
- How to avoid: Even if you’re unsure about the transaction, it’s safer to call your bank and let them know. Sometimes you can block or lock the credit card without having to completely cancel it.
8. Not checking your statements and recent transactions
Pay with plastic and you can bury the price and repayment deep in your mind, and adapt a ‘pay now, worry later’ attitude.
- How to avoid: Most credit cards these days are linked to banking apps accessible on your smartphone. Periodically check your transactions to stay on top of your balance and pick up on any unnecessary or fraudulent transactions.
9. Avoiding the fine print
Credit card companies are counting on you not reading or not fully understanding the product. When this happens, you will likely end up being charged interest or penalty fees, or not receiving an offer you were expecting to get.
- How to avoid: Read through the terms and conditions, check out product reviews or call the provider to ask questions. Make sure you understand what you’re getting, how to get it and what you need to pay.
10. Failing to compare credit card offers
There are plenty of credit cards on the Canadian market and choosing one without doing your research could lead to a rejected application or the acquisition of a credit card that doesn’t suit your needs and spending habits.
- How to avoid: Make sure to consider the annual fee, interest rate, promotional offers, any rewards schemes and other perks like travel insurance or purchase protection.
How to pay your credit card bills
Whether you pay your credit card bill online, or at a branch, card companies these days make it easy for you to pay your credit card balance each month. Your payment details are listed on your statement. Here are a few ways you can pay your credit card bill:
- Internet banking. Link your credit card, transaction account or savings account using Internet banking. You can make credit card payments with a couple of clicks.
- Mobile app. Most banks offer mobile apps where you can monitor your accounts and make payments through your phone.
- Autopay. Download and complete an autopayments form to debit funds from a nominated transaction account.
- At a branch. Make a cash or cheque payment in person at a branch.
5 tips to help you pay your credit card bills on time
These tips are key to maintaining a good credit card payment history.
- Work with a budget. Create a budget to factor your credit card payment into your regular expenses so you have enough set aside to pay your bill by the due date. To avoid excessive interest charges, always aim to pay more than the minimum required each month.
- Change your payment due date. If it’s a matter of streamlining your finances, you may want to request a change to your statement due date. Some card issuers let you move your statement date closer to your payday.
- Use autopayments. You can set up autopayments for the minimum, full or a partial amount of your credit card balance each billing cycle. With this service, your transaction account is automatically debited to pay your credit card on the same day every month.
- Modify your payment frequency. If you get paid weekly or biweekly, you may want to make a payment on your credit card as soon as that money lands in your bank account. This could help you stick to your budget by taking away the temptation to spend more money before your due date.
- Set calendar reminders and use online banking services. Take the time to set up calendar notifications and download banking applications so you’re informed about your finances. Check to see what options your credit card company provides and opt-in if you often forget to make a payment on time.
Why should I pay my credit card bills on time?
- No late payment fee. Make your credit card payment by the statement due date and you’ll avoid the late payment fee.
- Save on interest. Paying your entire credit card balance will help you avoid paying the APR on purchases. Keep in mind, cash advances don’t have a grace period of up to 25 days, so try to avoid them or pay them as soon as possible.
- Improve your credit score. Maintain a good payment history to keep your credit report healthy.
Frequently asked questions about credit cards
Still have questions? Take a look below where we’ve answered some of the most common questions about credit cards.
What is a charge card?
When you think about credit cards, you’re probably thinking about cards that you can carry balances on. But there’s another lesser-known type of credit card: thecharge card.
With a charge card, you can’t carry a balance each billing cycle — you have to pay your card bill in full each month. Because of this, a charge card isn’t a good choice if you typically need more time to pay off your balance.
One reason you may be surprised to see charge cards is because they’re rarely offered anymore. The only major card provider that offers them is American Express.
What’s the difference between credit cards and debit cards?
With a credit card, you can pay for things by borrowing money from your card provider. With a debit card, you first deposit funds with your provider and then use the card to spend the money you’ve deposited.
Each card comes with advantages and disadvantages:
- You can’t get into debt with a debit card, because you’re only spending money you actually have. On the downside, you don’t get the protections offered by a credit card, and you can’t borrow money.
- A credit card lets you pay off balances over time, earn rewards, build your credit and offers great protection against fraud. But if you’re a compulsive spender, a credit card can be a dangerous friend.
Should I get a basic or premium credit card?
Basic credit cards tend to come with minimal features, such as low interest rates, a $0 annual fee and little to no additional features. These types of cards are suited to people who don’t intend to use their credit card often or who don’t qualify for higher-end cards. Basic cards make it easier to manage debt since they often come with lower interest rates and fewer reward options so you won’t be tempted to spend unnecessarily.
On the other hand, premium credit cards come with more features and reward perks, like travel rewards, insurance and purchase protection. But since these cards usually have higher annual fees and interest rates, you’ll want to make sure you plan to use the card and pay it off regularly enough to justify the higher cost.
Compare credit cards by type or feature
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