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Best Credit Cards to Rebuild your Credit in Canada

Written by Jessica Steer
Rebuilding your credit in Canada can be quite difficult, but it may not be as difficult as you think. One of the most underappreciated ways to rebuild your credit is with credit cards. Credit cards can heavily damage your credit card by having a higher balance that stays that way for a long period of time. Each month when your statement is reported to the credit bureaus, this can slowly chip away at your credit score. That being said though, if you use a credit card properly, it can be very powerful. The type of card you get, how you use it and the credit card balance you leave on it all can be huge factors in deciding your credit rating. If you have bad credit and are having a difficult time getting a credit card, not to worry, there are two different types of credit cards just for this reason: secured credit cards and unsecured credit cards.
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    The Top 7 Credit Cards to Help You on Your Credit Journey

    When you have a bad credit score and/or are looking to rebuild credit , one of the easiest ways to do that is a secured credit card. These types of credit cards require that you pay the credit card company the amount you would like as a limit. This ensures them that they get their money back but also helps to rebuild your credit score. While it may still be possible to get an unsecured credit card depending on your debt to income ratio and your credit score, secured credit cards report the same way to the credit bureaus so they are perfect for credit building purposes.

    Capital One Secured Mastercard

    The Capital One Secured Mastercard is a great credit card for those who are new to credit or who are looking to rebuild their credit score. It is also a guaranteed credit card but it does require a security deposit. This helps the credit card company to ensure you are committed to building your credit score. While there is no specific maximum credit limit for this particular Mastercard, the minimum security deposit is $75 or you may have to pay the $300 deposit. This amount will be specified to you with your approval. Another great feature of this credit card is that its interest rates are similar to those of an unsecured credit card. As long as you make your monthly payments you should see an increase in your credit score and potentially get an unsecured credit card in the future as well.

    • Annual Fee: $59
    • Minimum Credit Limit: $300
    • Maximum Credit Limit: Not specified
    • Interest Rate: 19.8%
    • Cash Advance Interest Rate: 21.9%

    The few eligibility requirements are:

    • You must be the age of majority where you live
    • You don’t already have Capital One account or an application currently submitted for one
    • Provide the required security amount
    • You haven't applied more than once in the last month
    • You haven't had a Capital One account in bad standing in the last year

    Neo Secured Mastercard

    Another option for a secured credit card in Canada is the Neo Secured Mastercard. A major difference between this secured card and the capital one secured card is that you can earn cash back rewards with the Neo card. There is no limit on the amount of cashback you can earn. The average earning is 5% with over 8,000 different partner companies. They also have an app that shows you their partnered locations near you. There are also different cashback bundles you can choose from to customize to your needs. Another great feature is that you can use your virtual card instantly once you get an approval. With the Neo card, the minimum deposit is $50 but there is no specified maximum deposit.

    • Annual Fee: $0
    • Minimum Credit Limit: No specified
    • Maximum Credit Limit: Not specified
    • Interest Rate: 24.99%
    • Cash Advance Interest Rate: 26.99%

    Like the Capital One credit card, the Neo secured card has guaranteed approval once you meet the few requirements such as:

    • You must be a Canadian resident
    • You must be the age of majority where you live
    • You must pay the security amount

    Home Trust Secured Visa

    Just like the other 2 secured credit cards, the Home Trust Secured Visa is an effective way to build up your credit score. However, unlike the other cards, a credit check is required. That being said, even with poor credit scores and even bad credit history, most applicants are approved. A great feature of this card is that it works just like an unsecured credit card and will build your credit score to help you get an unsecured credit card faster.

    • Annual Fee: $0
    • Minimum Credit Limit: $500
    • Maximum Credit Limit: $10,000
    • Interest Rate: 19.9%
    • Optional Interest Rate with $59 annual fee : 14.9%

    The eligibility requirements for this credit card are as follows:

    • You must be the age of majority where you live
    • You must have a source of income
    • You aren’t currently in bankruptcy
    • Subject to other terms and conditions that include but are not limited to a credit check

    Refresh Secured Visa

    The Refresh secured visa is another credit card that does not require a hard credit check. The deposit amount on this card ranges anywhere from $200 to $10,000. Your deposit amount will reflect on how much you can spend. That being said, you can still build your credit with this card. As long as you make your monthly payments, your positive payments are reported to both of the credit bureaus. Just like unsecured credit cards, you get the most credit benefits by leaving your credit balance under 35% of your total credit limit.

    • Annual Fee: $12.95 plus $3 per month
    • Minimum Credit Limit: $200
    • Maximum Credit Limit: $10,000
    • Interest Rate: 17.99%

    The Refresh Visa is a guarantee approval as long as these few requirements are met:

    • You must be of the age of majority where you live
    • You must live in a province/territory that offers the Refresh Visa
    • You must provide the required secured funds

    TD Cash Secured Credit Card

    Another great way to get a secured credit card is through your bank. If you have an active savings account with TD Canada Trust. You can apply for a secured credit card, however, to get this card a credit check is normally required. You can receive a card for the amount that is in your savings account that is linked to your credit card. With this card you can receive 1% cash back on all of your purchases and your account is considered to be your security deposit. If you have a savings account you aren’t planning on dipping into anytime soon, this is a great option. You can use your card just like any traditional credit card, while building your credit score.

    • Annual Fee: $29
    • Minimum Credit Limit: Not specified
    • Maximum Credit Limit: Not specified
    • Interest Rate: 25.24%

    This is not a guaranteed approval credit card and the approval is done on an individual basis.

    Scotiabank Value Visa

    Unlike the other credit cards listed, the Scotiabank Value Visa card is not meant for poor credit even though it is a great card to help you rebuild your credit score. The minimum credit score needed to get this card is usually in the good to excellent range. The Scotiabank unsecured credit card has a lower interest rate than a lot of other credit cards. Even those that are at the top 5 banks. However, along with the credit score requirement and credit check requirement, there is a minimum income requirement of $12,000. However, it does include discounts on car rentals and card protection in the event of life changing situations like losing your job, sickness or even disability.

    • Annual Fee: $0
    • Minimum Credit Limit: $500
    • Maximum Credit Limit: Not specified
    • Interest Rate: 16.99%

    There are some eligibility requirements with this card, however you do not need to bank with Scotiabank in order to be approved.

    Plastk Secured Rewards Card

    Another great secured credit card in Canada is the Plastk Secured Rewards Card. This is also a rewards credit card that works very similarly to an unsecured credit card. It has a relatively low interest rate for an unsecured credit card as well. There is no specified minimum and maximum secured amounts but there is a really flexible limit on this card. Plastk also has some awesome welcome offers like a 25 day interest free grace period, and 0% APR for the first 3 months with 5000 in bonus points. This secured credit card also offers zero fraud liability as well as the ability to pay your balance immediately with Interac E-transfer. They also have some great referral bonuses.

    • Annual Fee: $48 with $6 per month
    • Minimum Credit Limit: $300
    • Maximum Credit Limit: $10,000
    • Interest Rate: 17.99%

    KOHO Prepaid Mastercard

    Lastly, we have the KOHO Prepaid Mastercard. So far we have an unsecured credit card, secured credit cards, but we have yet to run into a prepaid credit card, until now. The main difference between a secured credit card and a prepaid credit card is that you can only spend the amount you put on the prepaid card, whereas a secured credit card is mainly just a deposit and you can have a higher credit limit than your secured deposit amount. With a prepaid card like KOHO, there is no credit check required and guaranteed approval. It is a great way to not just increase your credit score, but to do it quickly.

    Once you get your free KOHO card, you can subscribe to credit building which is only $10 per month. On top of reporting your monthly payments to the credit bureaus to increase your credit score, the KOHO card also has some neat perks like:

    • A budgeting app
    • 0.5% cash back on debit purchases
    • Access to $100 of your next paycheck 3 days before payday for free
    • Interest on your account balance at 1.20%
    • Activate your card and get a $20 cash bonus that you can use within 30 days

    What Credit Card is Best for Me?

    Which credit card you choose to go with to rebuild your credit ultimately depends on your situation. Whether you have a bad credit, poor credit or good credit score, it can make a difference which works better for you. Don’t forget you aren’t limited to one option either. You can have 2 different types to help build your credit as well. As important as it is to diversify your portfolio, having 2 new active and positive credit accounts on your credit report can make a big difference in your credit rating if they are used correctly. Here is a breakdown of which credit card is best spending on your personal finance situation.

    Best Credit Cards for Low Credit Scores

    In general, all of the secured credit cards that don’t require a credit check are great for those with low credit scores. These would be the:

    • Capital One Mastercard
    • Refresh Secured Visa
    • Neo Secured Mastercard
    • Home Trust Secured Visa
    • Plastk Secured Rewards Card

    All of these cards have different perks like cash advances or cashback rewards. You have to choose which is the best for you.

    Easiest Credit Card to get

    The easiest type of credit card to get are prepaid credit cards. There really is no approval required. You just add the money into your account and spend and refill as you go. It essentially acts as a bank account that you pay a fee to have your credit account updated. On top of being the easiest card to get, it is also the fastest way to increase your credit score without going into credit card debt.

    A secured credit card is the second easiest. There are a few small requirements, but in general they are mostly guaranteed approvals. On top of that you actually have a credit limit, not just the security deposit amount.

    Best Bad Credit Credit Card

    When it comes to getting a credit card with bad credit, you have two options: secured cards or prepaid cards. The best secured credit card would be the Neo secured card. It has awesome rewards, guaranteed approval as well as low secured deposits and average rates. The best prepaid card would be KOHO. It’s essentially a debit card that you can transfer money into. You are still only spending your own money but it works like a credit card. You pay a $10 fee to have your payment history reported to the credit bureau monthly and get some awesome perks that even include earning interest on the money in the account.

    Best Credit Building Credit Card

    The best credit card to build up your credit is the Capital One Secured Mastercard. It has a low annual fee, an average interest rate, and a small secured deposit required for the credit limit you receive. Because Capital One also offers unsecured credit cards, it can be simple to upgrade as well as long as you pay your monthly payments.

    Is there Instant Approval for a Secured Credit Card with Bad Credit?

    As far as instant approval credit cards go, that would be the Refresh Secured Visa card. This card has a low yearly fee as well as a monthly fee that works out to be around $48.95 per year.

    Is there Instant Approval for an Unsecured Credit Card with Bad Credit?

    There are plenty of unsecured credit cards that are instant approval but they often look at more than just your credit score. It is much more difficult to get an unsecured credit card with bad credit than an unsecured one. So, unless you apply for one directly, you won’t know if you are approved.

    $500, $1000 and $5000 Limit Credit Card Guarantees

    When you are looking for a credit card, it’s normal to have an amount in mind that you are looking for. When it comes to a $500 card, whether it is for good or bad credit, that is often the minimum you will get with a guaranteed approval. Higher amounts are more difficult to predict. With a secured deposit many credit cards will give you $1000 and quite a few even $5000. There are no guarantees though. Just because they guarantee an approval, an amount can’t be guaranteed. You should receive the amount with your approval.

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