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The Best Low-Interest Credit Cards in Canada

Written by Jessica Steer
When it comes to credit cards, the best-case scenario is to pay your bill in full every month to not pay interest, but we know that’s not always possible. In order to avoid incurring large interest charges on your bill, it’s a good idea to get a low-interest credit card instead.
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    Low-interest credit cards can be up to half of the percentage of a traditional credit card. This means that you could save up a ton of money on interest. This has a lot to do with the fact that credit card purchases accrue interest daily instead of monthly, like personal loans. These can result in much higher fees than traditional borrowing, making it important to pay attention to the credit card interest rate to save yourself some money. 

    Low-Interest Card Options in Canada

    In Canada, there are plenty of low-interest cards as well as credit cards that have low promotional interest rates. When selecting the right credit card for you, you want to be careful and pay attention to the fine print. Make sure you're aware of the extra charges, if there’s an annual fee you have to pay, and if there are any rewards associated with the card. It’s also important to pay attention to whether the cards are variable-rate credit cards or fixed-rate credit cards.

    Let’s take a look at some of the best low-interest credit cards in Canada. 

    MBNA True Line Mastercard

    This credit card is not just known for its low purchase interest rate; it’s also known for its low purchase interest rate. This card is also known for offering some awesome promotional rates as well. It’s most commonly used as a balance transfer credit card. 

    The purchase interest rate for the True Line Mastercard is a fixed rate of 12.99%. This is also the rate for balance transfers. Cash advance rates are 24.99%, plus there are no annual fees. Currently, MBNA has an offer of 0% interest on balance transfers for 12 months, pending approval. That said, there is a 3% balance transfer fee for all balance transfers. Transfers must occur within 90 days of your account opening.

    Included with this card, you can have up to 9 authorized users with no additional fees. There’s also the MBNA payment plan, which allows you to pay for large purchases in installments. You have a choice of 6, 12 or 18 months, and you can get this on purchases over $100. Plus, the MBNA card is available to use with Apple Pay. You can even calculate how much interest you could save by doing a balance transfer instead of staying with your old credit card. 

    BMO Preferred Rate Mastercard

    The BMO Preferred Rate Mastercard is BMO’s more popular credit card. The purchase interest rate is only 13.99%, and the annual interest rate on cash advances is only 15.99%. There’s also an annual fee of $29, but if you have a BMO performance chequing account, the annual fee is waived. 

    Some cool features included with this card are that you can:

    • Add another cardholder with no fees
    • Extended warranty protection
    • Purchase protection
    • 24/7 emergency support anywhere in the world

    This card also includes BMO Pay Smart. Pay Smart allows you to make large purchases and break them down into affordable installments with a low fee. 

    CIBC Select Visa Card

    CIBC offers their own low-interest credit card, known as the select Visa card. This card offers 13.99% on purchases and 13.99% on cash advances. Currently, there’s also a welcome offer of 0% on balance transfers for up to 10 months and only a 1% fee. This card has a $29 annual fee that’ll be rebated for the first year. 

    Some perks included with this card are:

    • Insurance coverage
    • Fuel savings
    • Global money transfers

    All credit cards with CIBC have different insurance coverages. One of the insurances included with this card is Common Carrier Accident Insurance. The optional insurances you can get are CIBC Travel Medical Insurance and CIBC Payment Protector Insurance for Credit Cards. 

    You can save up to 10 cents per litre when you link your Journey Rewards card with your CIBC card at select gas stations. You can also send global money transfers with no transaction fees and no interest as long as you make your payment by the due date. 

    MBNA True Line Gold Mastercard

    The MBNA True Line Gold Mastercard is another MBNA low-rate mastercard. The purchase interest rate on this card is a fixed rate of 8.99%, balance transfer rates are 8.99% and cash advance interest rates are 24.99%. This card, however, does have an annual fee of $39. 

    Just like the other MBNA credit card, this card works with Apple Pay. You can also have up to 9 authorized users for no additional fee. However, with this card, there’s no balance transfer offer. 

    Scotiabank Value Visa Card

    Scotiabank also has a low-rate credit card that offers fixed interest rates of 12.99%  on purchases, balance transfers and cash advances. There’s also no additional cash advance fee. Each additional card costs $0, and the minimum credit limit is $500. There’s also an annual fee of $29.

    Right now, Scotiabank has a welcome offer on their value visa. There’s 0% interest on balance transfers for the first 6 months and no annual fee for the first year. 

    Included with this card is Visa paywave. You can also save up to 25% at participating AVIS and Budget locations on car rentals. This is available in both the US and Canada. You can also get Scotia credit card protection. You can also go with the Basic Coverage, which includes:

    • Life Benefits
    • Critical Illness Benefits
    • Hospitalization Benefits

    You can also get Comprehensive Protection, which includes:

    • Life Benefits
    • Critical Illness Benefits
    • Hospitalization Benefits
    • Disability Benefits
    • Job Loss Benefits
    • Strike or Lockout Benefit

    This card also allows you access to Scotia SelectPay, which provides an interest-free way of paying off purchases over $100 for a low fee. Plus, if you have a bank account with Scotiabank and have the preferred or ultimate package, you can get your annual fee rebated. 

    HSBC Rewards Mastercard

    Another popular low-interest credit card is the HSBC Rewards Mastercard. This card has an annual purchase interest rate of 11.99%, as well as balance transfers and cash advances. There’s a primary cardholder fee of $25 and a supplementary card fee of $10. You can get a full rebate if you’re a HSBC Private, Premier or Advanced client. 

    One of the perks of this credit card is that you can earn 2 points for every $1 spent on eligible dining and entertainment purchased. You earn 1 point for every dollar on everyday purchases. This card also includes insurance coverage and price protection as well. There’s even zero-dollar liability protection, and it’s compatible with Apple Pay. 

    RBC Rate Advantage Visa

    The RBC Rate Advantage Visa card is a low-rate Visa card where the interest rate depends on your individual financial situation. Annual variable interest rates on this card for purchases range from prime plus 4.99% to prime plus 8.99%. This is the same for cash advance rates as well. There’s no annual fee and no fee for additional cards. 

    Some awesome features included with this card are:

    • Purchase Security and Extended Warranty Insurance
    • Cash savings with RBC offers
    • Save 3 cents per litre on fuel and earn 20% more points with Petro
    • Earn and redeem Be Well points
    • 3 months complimentary DashPass subscription
    • $0 delivery fees on DoorDash orders, $15 plus when you pay with your card

    There are also some great optional additions to your card, including:

    • Travel Insurance
    • RBC Road Assist
    • Balance Protector Max Insurance
    • Identity Theft and Credit Protection

    The one thing you should consider with this card is what the current prime rate is. Prime rates vary depending on inflation and the Bank of Canada, so they can fluctuate frequently. Currently, as of October 2023, the prime rate in Canada is 7.2%. This would make the lowest variable interest rate for this card currently 12.19%, and the highest variable interest rate would currently be 16.19%. These numbers will change, though, as the bank’s prime rate does. 

    TD Emerald Flex Rate Visa

    Another low-interest rate card that has an interest rate based on Canada’s prime rate is the TD Emerald Flex Rate Visa. The interest rate for both purchase interest and cash advance interest is between prime plus 4.50% and prime plus 12.75%. This means that with the current prime rate of 7.2f%, the currently variable interest rates range between 11.70% and 19.95%. These numbers will fluctuate depending on where the prime sits, though. With this card, there’s also an annual fee of $25. 

    Some features included with this card are:

    • Optional Travel Medical Insurance
    • Optional Trip Cancellation and Trip Interruption Insurance
    • 50% more stars with Starbucks purchases
    • Apple Pay and Samsung Pay Compatible
    • 10% off Avis and Budget rates in the US and Canada
    • Minimum 5% off international Avis and Budget rates
    • Purchase Security and Extended Warranty Protection
    • Instant alerts
    • Visa Zero Liability
    • TD Payment Plans on purchases over $100 (6, 12 or 18-month options)

    RBC Visa Classic Low Rate Option

    The RBC Visa Classic Low Rate Option is a low-rate card that has an annual fee of only $20. The purchase and cash advance interest rate is only a fixed rate of 12.99%, and it includes purchase security and extended warranty insurance. The other perks included in this card are the same as those of the RBC Rate Advantage Visa.  

    Scotiabank American Express Platinum

    The Scotiabank American Express Platinum card is a good option for those looking for a low-rate card that offers some amazing rewards. The rewards included with this card are travel perks, hotel perks and points you can redeem while earning more points. You can even take large purchases and break them down into installments of 3, 6, 9, or 12 months to save more on interest. 

    The interest rate for this card is a fixed rate of 9.99% on all transactions, but the annual fee is $399. There’s a minimum credit limit of $10,000 and a cost of $99 for each supplementary card. While this is a hefty annual fee, this card does include travel rewards, luxury travel privileges and insurance coverage. Plus, you can get double the scene points on eligible purchases. 

    The exclusive additional benefits included with this card are:

    • 10 complimentary airport lounge access passes
    • No foreign transaction fees
    • Scene travel points
    • Premium concierge services
    • Special access with American Express Invites
    • Beyond travel rewards
    • Access to unique events with a VIP pass
    • Hertz #1 Club Gold Member

    This card is ideal for those looking for a low rate and who love to travel. The majority of the perks with this card are travel-related, and it has a high limit, meaning you will most likely need a higher credit score in order to get approved. That’s pretty common with low-rate credit cards, though. The higher your credit score, the lower the rate. 

    National Bank Syncro Mastercard

    National Bank is another financial institution that offers a low-rate MasterCard. It's called the Syncr Mastercard. This card has a variable purchase interest rate of 4% plus prime. The minimum interest rate you can get with this card is 8.9%, but the variable rate is currently sitting at 11.2% as of October 2023. The variable interest rate on cash advance and balance transfers is 8% plus prime, which is currently 15.20%, and has a minimum variable rate of 12.9%. There’s also an annual fee of $35.

    Some benefits included with this card are:

    • Contactless payment
    • Purchase protection
    • Extended warranty protection
    • Fraud protection
    • Mastercard ID check on online purchases
    • Priceless cities for travel perks while you’re traveling
    • Mastercard's zero liability policy

    Desjardins Odyssey Visa Infinite Privilege

    The Desjardins Odyssey Visa Infinite Privilege card is not just a low-rate credit card; it’s also a rewards credit card. With this card, you can earn cash back on all your purchases with a fixed interest rate of only 10.9%. That said, there is an income requirement you must meet in order to get approved. You need a personal income of $150,000 or a combined household income of $200,000. There’s also an annual fee of $295 for Desjardins members and $395 for non-members. This card has some great features, but it also has the highest annual fees. 

    One thing that’s important to note is that while the current interest rate is 10.9%, as of November 29, 2023, the purchase interest rate will increase to 11.9%, and the cash advance and balance transfer interest rate will increase to 12.9%. These are still very low interest rates, just not as low as before, even with the high annual fee. 

    As for rewards that come with the Infinite Privilege card, you can earn up to 4% back on eligible purchases. These earnings are called BONUS DOLLARS and can be used towards gift cards or other services and products. The earnings you get depend on what you’re purchasing. Let’s take a look at the different rates. 

    • 3% back on groceries
    • 4% back at restaurants
    • 4% back on entertainment
    • 4% back on alternative transportation
    • 3% back on travel
    • 1.75% back on all other purchases

    As of January 1, 2024, the rate of travel will change. You’ll earn 3% back on your first $25,000 in travel purchases, and then you’ll earn 1.75% on the rest. This amount will reset every year. There will be some other changes as well. Convenience store purchases will no longer be included in grocery purchases, and sporting events will no longer be included in entertainment. You’ll only earn 1.75% on these purchases. 

    This credit card also includes:

    • Comprehensive travel insurance for up to 60 days in a row
    • Montreal-Trudeau Airport lounge access
    • Concierge services
    • Auto rental insurance
    • 25% off car rentals for Hertz, Thrifty and Dollar
    • Mobile device insurance
    • Purchase protection insurance
    • Extended warranty coverage
    • A 21-day interest-free grace period on all purchases

    24-Month No Interest Credit Cards in Canada

    While there are a few 0% interest rate credit cards available, these are promotional rates. They also don’t extend to 24 months. The longest 0% rate available currently is MBNA True Line Mastercard, with a 0% rate lasting 12 months. We discuss more about this above. 

    Current Credit Card Rates in Canada

    In Canada, there are plenty of different credit cards that offer different rates. The type of credit card you get and what interest rate you’re approved for all depends on your financial situation as well as your credit score. The typical credit card interest rate in Canada is 19.99%, but it can sometimes get as high as 22%. There are, however, low-rate credit card options. These cards often are more difficult to get approved for, but their interest rates range from 9.99% to 16%, depending on the credit card issuer. 

    While low-rate credit cards are better for those who hold an outstanding balance on their credit card, they’re not ideal for those looking to earn rewards. Often, the credit cards that offer the best rewards have an interest rate of 19.99% or higher. If you don’t hold any outstanding debt on your credit card, though, you could earn points to help you save money on your other purchases. 

    Best Credit Card for Boosting Your Credit Score

    If you have a low credit score and are trying to rebuild your credit, a secured credit card may be the best option for you. Secured credit cards work similarly to regular credit cards except for the fact you have to pay a deposit. That deposit is kept until your credit card is paid off in full and cancelled. It’s a good way to show lenders that you can be financially responsible while increasing your credit score. 

    In terms of regular credit cards, it doesn't matter so much as to what credit card you use but how you use it. In order for your credit card to increase your credit score, you have to do more than just make your monthly minimum payment on time. It’s important that you keep your credit utilization below 35%. This is your total utilization, though, not just your credit card. It can be a combination of different revolving credit lines, such as lines of credit and credit cards. The lower you keep your credit utilization, the more positive of an impact it’ll have on your credit score. 

    How Credit Card Interest Works

    Even with a lower interest rate, credit card interest adds up much faster than other lending products. This is because credit card interest is accrued daily, unlike other compound interest products that are normally accrued monthly. The daily interest is added up and added to your total balance on your credit card statement. As the balance continues to sit on your credit card, your balance will continue to go up even if you aren’t making any more purchases. This means that the higher the balance there is on your credit card, the more difficult it is to pay off. 

    In order to help pay off these higher balances quicker, many people choose to transfer their balance to a different credit card that offers lower credit card interest rates. These cards can save a lot of interest, making it much easier to pay off. It’s also ideal to make larger payments whenever possible to put more down on the principal. The more you put down the principal, the less interest you’ll have to pay. As we mentioned, many credit cards offer deals on balance transfers. If you pay off the balance in the allotted amount of time, you could end up saving yourself a lot of money, potentially thousands that can go to your principal payments instead of interest. 

    Balance Transfers and How They Work

    With balance transfers, you’re essentially transferring your balance from one credit card to another. Some credit cards will deposit the money into your bank account, where you can then pay off your other card, or you can have your credit card paid off directly from the credit card company and then have it cancelled. 

    There are plenty of reasons you may want to transfer your balance but the most common is to save money on interest on higher interest rate balances. Many credit card companies, like MBNA, offer balance transfers at 0% for a certain period of time to entice new customers. Paying off your balance in that allotted period of time can save you a lot of money on interest. It can also make a difference if the regular rate is lower than your old credit card once the promotional rate ends. Even with a 0% promotional rate, though, there is usually still a one-time transfer rate of 1 - 3%. For the MBNA True Line Mastercard, the rate is 3%, with a minimum charge of $7.50.

    Cash Advances on Your Credit Card

    When it comes to cash advances, the interest works a little differently than that of standard purchases. Most credit cards offer a standard purchase grace period of 21 - 30 days; Cash advances don’t often offer this grace period, though. This can end up costing you a lot of money in interest. 

    As you can see with some of the credit card offers, cash advances can also have higher interest rates than standard purchases. They’re a great feature to use in a pinch, but you want to pay them off as soon as you can. The longer a cash advance sits on your credit card balance, the more it’s going to cost. If you’re looking for a long-term cash advance, a better option would be a personal loan. 

    With cash advances, there’s also a limit that your credit card will give you. For most credit cards, it’s 30% of your total available balance. This would mean that for a credit limit of $1,000, the most you would be able to withdraw for a cash advance would be $300. For a credit card with a limit of $3000, the most you would be able to withdraw is $900. That said, though, every credit card company is going to have a different number. It’s important to verify this if you’re going to consider getting a cash advance. With some credit cards, you can even get cheques for your credit card that you can use to pay certain bills, but the interest on this is also very costly. Emergency cash advances are only a good idea if you can pay them off right away. 

    Reasons to Choose a Low-Interest Rate Credit Card

    When it comes to deciding if a low-interest rate card is for you, it’s important to consider if you carry a balance on your credit card and, if so, how much that balance costs you. Many credit cards that offer low interest rates have features on their website to show you how much you could save with a low-interest-rate card. Depending on the balance you hold, this could be a lot of money. For some, they pay off their balance every month, and it’s more important to have rewards on their card than it is a low interest rate. 

    Credit Score Needed for a Low-Rate Credit Card

    In Canada, credit scores can range anywhere from 300 to 900, with 300 being the lowest and 900 being the highest. Your credit score is based on your financial history, how many credit lines you hold, your payment history as well as your credit utilization. If you're looking into getting a credit product that offers a lower interest rate, then it’s likely the issuer is going to look for a higher credit score. 

    In order to get a low-interest-rate credit card in Canada, most companies are looking for a credit score of at least 700 or higher. However, there are no strict credit card requirements. That said, you can get more specialized credit cards with a credit score of 700 or higher, as long as they don’t have a minimum income requirement attached to them. If they do, then you have to meet that minimum income requirement as well. 

    If you already have a standard-rate credit card and are looking to do a balance transfer to a low-rate credit card, it’s important that you show you’ve made all your payments on time, even if you can’t manage to reduce your utilization below 35%. Showing the credit card issuer that you’re able to make your minimum monthly payments on time, as well as hold a higher credit score, will make a big difference in your approval odds. 

    How to Choose the Best Low-Rate Card for You

    All of the different low-interest rate cards are good cards. That said, the best card for you will be different for everyone. This is because all cards come with different perks and interest rates. Your individual spending habits will be a key factor in deciding which card is the best for you. 

    Do you make large purchases often? Then you may want a card that offers purchase protection and extended warranties. What stores do you use your credit card at most often? How often do you use your credit card? Do you have to make cash advances? If you do, you may want to choose a card that has the lowest cash advance rate. While you can’t go wrong with any of these rates, some may be more well-suited to you than others. 

    Final Thoughts

    When it comes to low-rate credit cards, there are plenty of options out there offering competitive interest rates. Many of the top 5 banks hold low-rate credit cards, as well as online institutions, credit unions, and other popular banks. With many of these banks, there are perks for holding a card with them and having an account. Others are just credit card companies, so it isn’t likely that you’ll hold more than one product with them. 

    When it comes to choosing a low-rate credit card, you should consider whether or not you’re going to do a balance transfer. If you’re going to do a balance transfer, then it might be a good idea to consider a card that offers 0% on balance transfers for an allotted period of time. Not only will that let you pay off your card and save money without a consolidation loan, but it will also allow you to continue using the card at a lower rate. 

    If you look at many of the credit card options we give above, you’ll notice that only a few of them offer 0% promotional interest rates. These aren’t common, so when they do appear, many people will apply. The trick to these interest rates, though, is to pay off as much as you can while the rate is available and don’t make any purchases for as long as you can. Any new charges added to your credit card bill won’t qualify for the 0% promotional offer. This will allow you to save the most amount of money and catch up on your credit card debt. 

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