Although credit cards with annual fees generally dole out more rewards and higher payouts, there are reasons why picking up a fee-based credit card might not make financial sense (like if you’re a student or on a tight budget and won’t spend enough to offset the fee).
The good news is there are several no fee credit cards that deliver great value through cash back, travel rewards, low interest rates, or no foreign transaction fees, despite the fact they’re free to carry.
If you can’t justify paying an annual fee, check out our picks of the best no fee credit cards in Canada that made the cut for 2020.
The best no fee credit cards in Canada for 2020
|Credit Card||Best No Fee Card For||Card Details|
|Tangerine Money-Back Card (VIEW)||Cash Back||
|SimplyCash from American Express (VIEW)||Flat-Rate Cash Back||
|MBNA Rewards Platinum Plus Mastercard (VIEW)||Travel Points||
|MBNA True Line® Mastercard® (VIEW)||Low Interest / Balance Transfers||
|Home Trust Preferred Visa (VIEW)||No Foreign Transaction Fees||
|BMO CashBack Mastercard (VIEW)||Students||
|PC Financial World Elite (VIEW)||Store Credit Card||
|Can’t choose? Find the right card for you here.|
*$5,000 annual cap on each category
Best no fee cash back credit card
Winner: Tangerine Money-Back Credit Card
The Tangerine Money-Back Credit Card gives you 2% cash back in two spending categories of your choice (from a total of 10 options), and 0.5% on all other purchases. If you choose to deposit your cash back rewards in a Tangerine savings account, you’ll get a third bonus category earning 2% cash back.
Your bonus category options include: groceries, restaurants, gas, drugstores, entertainment, furniture, motel-hotel, recurring bills, home improvement, and public transportation (which includes parking, taxis and rideshares like Uber).
Why we like it:
This highly customizable card makes it easy to earn cash back in the areas where you spend the most, and at 2%, it offers among the highest return on bonus categories of any no fee credit card. There’s no limit to the amount of cash back you can earn, and rewards are refunded monthly (for most cards, it’s annually) as either a credit on your account statement or a deposit in your Tangerine savings account. You can even change your 2% bonus categories at any time, though it’ll take at least one statement period for the updates to come into effect.
While this card is lacking in terms of insurance coverage, free supplementary cards are available for authorized users and new cardholders can receive a promotional balance transfer rate of 1.95% for the first six months. If you have an annual income of at least $60,000, as part of the application process, you’ll be referred to the higher-tier Tangerine World Mastercard which does offer rental car and mobile device coverage.
Best no fee flat-rate cash back credit card
Winner: SimplyCash Card from American Express
The SimplyCash from American Express is an excellent no fee cash back credit card, offering 1.25% on everything. For the first three months, new cardholders will earn 2.5% cash back on all purchases (up to $150).
Why we like it:
While welcome offers on many no fee cards cap at around $100, this card’s offer maxes out at an impressive $150. Plus, once the welcome period ends, there’s no limit to the amount of cash back you earn and you’ll get a strong 1.25% on everything. The flat cash back rate makes it easy to understand your rewards and means you won’t have to think about maximizing any bonus categories. The card also offers access to AMEX’s entertainment perks (more on that below).
All AMEX cardholders receive access to pre-sale tickets and reserved seats for concerts, movie screenings, and culinary events, plus other special offers through American Express Invites. This card also offers extended warranty protection (doubles manufacturer’s warranty) and, even though it’s a no fee cashback card, includes $100,000 in travel accident insurance.
Best no fee travel credit card
Winner: MBNA Rewards Platinum Plus Mastercard
For your first 90 days, the MBNA Rewards Platinum Plus Mastercard will earn you a whopping 4 MBNA points for every dollar you spend on gas, groceries and restaurants. After that, you’ll get 2 points per dollar on those same purchases with a $5,000 annual cap on each category. All other purchases earn one point per dollar.
The card also offers two sign-up bonuses: first, you can earn 5,000 points after making $500 in eligible purchases within the initial 90 days of opening your account. Second, you’ll receive another 5,000 bonus points when you switch to e-statements within your first 90 days (conditions apply on both bonus offers). The value of 1 MBNA point is $0.01 when redeemed for travel (the equivalent of 1%) or $0.005 if redeemed for cash back (0.5%).
Why we like it:
The ability to pocket four times the points on bonus categories in your first 90 days and the additional 10,000-point welcome offer is great value for a card that charges no annual fee. MBNA Rewards points are also flexible and can be redeemed for travel on virtually any airline (including taxes and fees), brand-name merchandise, gift cards from participating retailers, cash back, and charitable donations.
The card includes a suite of travel insurance benefits, including common carrier coverage, baggage loss/baggage delay assistance, and car rental collision/loss damage waiver insurance.
Best no fee card for low interest / balance transfers
Winner: MBNA True Line® Mastercard®
The MBNA True Line Mastercard has a fixed APR of 12.99% on purchases, which is among the lowest fixed interest rate on the market for a no fee credit card in Canada. Plus, if you’re looking to consolidate and pay off credit card debt at a lower rate, it has a 0% rate on balance transfers for the first ten months — that means you won’t pay a cent of interest on your transferred balances for nearly a year (note that a 3% or minimum $7.50 fee will be applied to the amount transferred).
Why we like it:
It packs a double punch of having a low interest rate on purchases (with an APR that’s 7% lower than what’s found on the typical credit card) and an unbeatable balance transfer offer that lasts for a lengthy ten months. The fact it charges no annual fee also means it can serve as a great back up card to use in case of emergencies when you suspect you’ll carry a balance.
Fraud protection and 24/7 customer service.
Best no fee card with no foreign transaction fee
Winner: Home Trust Preferred Visa
The Home Trust Preferred Visa offers 1% cash back on all Canadian purchases, but arguably its best feature is the fact it charges no foreign transaction fees (if you make a purchase in a foreign currency, most cards tack on a fee of 2.5%). Note that this card isn’t available to residents of Quebec and has a limit of 10 authorized transactions per day.
Why we like it:
It’s a good supplementary card to have if you frequently make purchases in foreign currencies. And with no annual fee, it won’t cost you even if you only use it occasionally for online shopping or while travelling. Also, there’s no limit on the amount of cash back you can earn on purchases.
This card includes free roadside membership (valued up to $100), car rental collision insurance and purchase security insurance also come built-in.
Best no fee student credit card
Winner: BMO CashBack Mastercard
As a student looking to pick up your first credit card, you’ll want to avoid annual fees. But, you’ll also need to find a card whose approval requirements are easy to meet. Enter the BMO CashBack Mastercard. It has no income requirement, great rewards on essential purchases (like groceries and recurring bills), and will earn you 0.5% on everything else.
One thing to keep in mind is the card’s two bonus categories – groceries and recurring bills – each have $500 monthly spending caps. For example, you’ll earn 3% on your initial $500 in grocery purchases within a 30-day period but 0.5% on any purchases beyond that amount. The silver lining is these caps will refresh at the start of every new monthly billing cycle. If you do get this card, you’ll want to get acquainted with when exactly your card’s monthly billing cycle starts and ends (it’s likely not going to be the 1st and 30th of every month).
Why we like it:
An excellent starter card, the BMO CashBack Mastercard mostly keeps things simple. There’s no complicated points programs, no income requirements, and it offers the richest rewards on groceries of any no fee card out there. That means students can focus on what’s really important: establishing their credit history and racking up savings when buying household essentials. Yes, the card’s bonus categories are capped, but at $500 per month, they’ll be hard to max out, especially for anyone on a student budget. Another great feature is you can redeem cash back rewards at any time from as little as $1.
The card’s welcome offer of 5% on the first three months of purchases is also impressive considering it’s just an entry-level credit card and can help students further boost their savings.
This card includes automatic extended warranties (which can come in handy when buying must-have tech for school, like a laptop or computer monitor), purchase protection, and discounts on select car rentals to help save on road trips back home.
Best no fee store credit card
Winner: PC Financial World Elite Mastercard
The PC Financial World Elite Mastercard is one of three PC Financial credit cards which earn you PC Optimum points on all your spending. With this card, you’ll get 45 PC Optimum points for every dollar spent at Shoppers Drug Mart and Pharmaprix, 30 points per dollar at participating groceries (including Loblaws-owned stores like No Frills), and 30 points for every litre of gasoline purchased at Esso. On all other purchases, this card offers 10 points for every dollar. 10,000 points = $10 off your purchases at PC affiliated retailers, which means 10 points is like the equivalent of $0.01 (or 1%). One major drawback of this card is it has a high-income requirement ($80,000 individually or $150,000 as a household).
Why we like it:
If you do a lot of shopping at Shoppers Drug Mart, Pharmaprix, Loblaws-owned groceries and/or Esso, the points can add up quickly. PC Optimum points can be redeemed at a number of Loblaw Cos. Ltd.-owned stores including Loblaws, Real Canadian Superstore, No Frills, Zehrs, Joe Fresh and online at BeautyBoutique.ca.
The PC Financial World Elite comes with travel emergency medical insurance up to ten days per trip along with rental car damage/loss coverage for 31 days.
When getting a no fee credit card is the right move
You’re getting your first credit card
If you’re looking to get your first-ever credit card, there’s a good chance you’re in school or just starting out in your career. If that’s the case, your priority should be to find a credit card that’s easy to get, free to carry, and can help build your credit history – not chase premium rewards or perks on an annual fee card.
With a no fee card, you can focus more of your efforts on paying off your balance every month and managing your spending. Regularly paying off your balance in full can improve your credit score and ensure you avoid racking up any interest charges.
By starting out with a no fee credit card, you can also keep the card active at no cost even if you don’t use it much or decide to upgrade to a more premium credit card down the line.
Finally, it’s worth noting that several credit cards that do charge annual fees come with qualification requirements, like an established credit history, a great credit score, and a minimum income of $60,000 to $80,000 – all or some of which may be out of reach if you’re a student or just entered the job market.
You won’t be using your credit card often
A credit card with an annual fee can pay for itself if you use it frequently enough since they almost always offer more rewards on your spending compared to their no fee alternatives. However, if you rarely use credit and don’t spend a lot in specific bonus categories, you likely won’t earn enough rewards to offset the fee. You typically need to spend at least $500 a month in order for a card with an annual fee to make sense. If you don’t, a no fee card could be a better fit for you.
Elite perks and insurance aren’t top of mind
Many annual fee cards come with great perks that include everything from travel medical insurance and lost-baggage coverage to free hotel upgrades, complimentary airport lounge access, and more. These perks – usually baked into the cost of a card’s annual fee – can offer great value if you use them regularly, especially considering they could cost several hundred dollars more if you had to pay for them out of pocket. That said, if you aren’t a frequent traveller or these types of perks aren’t of interest to you, a card with no annual fee would be a better fit. After all, why pay for perks you won’t be using.
The benefits on a no fee card may be enough
Although credit cards with annual fees generally offer a wider array of perks, most no fee cards still do come with complimentary extended warranties and purchase protection.
Some no fee cards even come with rental car insurance, mobile device insurance, and roadside assistance. Depending on your priorities, those perks may be all you need. Plus, if you’re not an avid traveller, you probably don’t need the additional perks that come with an annual fee rewards card in the first place.
You want to adopt a two-card strategy
In some cases, it makes sense to pair a card with an annual fee with another card that doesn’t have a fee to earn additional rewards.
For instance, if you only use the TD Cash Back Visa Infinite ($120 annual fee) you would earn a strong 3% cash back on groceries but just 1% on your spending at restaurants. However, if you also picked up the no annual fee Tangerine Money-Back Credit Card, you could use the Tangerine Card to earn 2% at restaurants and stick to paying with the TD Card at groceries to earn 3%. By pairing these two cards, you can earn double the rewards when dining out all while not paying any additional annual fees.
Another reason to pick up a second no fee credit card is if you have an American Express Card and need to carry an additional no fee Visa or Mastercard as a backup in case a merchant doesn’t accept Amex. The same holds true if your main credit card is issued by Visa but you regularly shop from Costco, since you may want to consider getting an additional no fee Mastercard credit card to use at the warehouse retailer.
You’re looking for a store card
Many retailers offer a store or co-branded credit card, which are best for frequent shoppers at these stores. These cards come with unique perks, such as the opportunity to earn more points or discounts for using your card. For instance, Triangle Mastercard holders can earn more Canadian Tire Money than regular Triangle Rewards members when they shop at Canadian Tire, Mark’s, or Sport Chek. And people with a PC Financial Mastercard can earn more points at Shoppers Drug Mart, Loblaws, No Frills, Real Canadian Superstore, and Esso than regular PC Optimum members. What’s great about most store credit cards (including all those mentioned above) is they don’t charge an annual fee.
- The best credit cards in Canada for 2020
- Better together: 3 credit card combinations to maximize your rewards
- The best balance transfer credit cards in Canada for 2020