Low interest vs. rewards credit cards in Canada: Which is better if you carry a balance?
This post is sponsored by RBC.
Most people love the idea of earning points, cash back, or travel rewards on every purchase. Fair. Free flights certainly sound more fun than reduced interest charges. But if you carry a balance, the math can change fast.
A rewards card may help you earn value, but accruing any kind of credit card interest can eat into that value quickly. That’s why anyone prone to carrying a balance is better off with a low interest card. Here, we break down how you can determine which card type is best for your needs and spending habits.
Key takeaways
- The best credit card isn't always the one with the biggest welcome bonus or flashiest perks. It's the one that matches your spending habits.
- Rewards cards deliver the most value when you pay off your balance in full every month and avoid interest.
- The cost of carrying a small balance is usually far higher than the value of rewards points, cash back, and travel perks.
- Finding the right credit card has less to do with the card itself and more to do with how you actually use it.
How do credit card rewards compare to risks like interest and fees?
Rewards credit cards can be valuable when used the right way. They can help you earn cash back, hotel points, airline miles, free insurance, lounge visits, statement credits, and more.
The problem is, many of the best rewards credit cards also come with higher annual fees and interest rates around 20% or more. That won’t matter if you pay your full balance every month. In that case, you can enjoy the rewards without paying interest.
Low interest credit cards work differently. They usually offer fewer rewards, but charge a lower interest rate. They’re best if you carry a balance, need to pay off a large purchase, want a financial safety net, or plan to transfer a balance from a higher-rate card.
For example, the RBC Visa Classic Low Rate Option has a $20 annual fee, a 12.99% purchase rate, and a 14.99% cash advance rate, including balance transfers. It also has a 0.99% introductory interest rate for the first 10 months on balance transfers and no annual fee for the first year when you apply by September 30, 2026.
Top credit cards in Canada comparison: Low interest vs. rewards
The best credit cards in Canada include low interest and rewards options. Low interest cards are built to help reduce interest costs, while rewards cards help you earn value on spending. Both can make sense, but for different people.
Best low interest credit cards: How the RBC Visa Classic Low Rate Option compares
Let’s take a look at some of the low interest options and see how their features line up:
| Card | Annual Fee | Purchase Rate | Cash Advance / Balance Transfer | Current offer | Best suited for |
| RBC Visa Classic Low Rate Option | $20 | 12.99% | 14.99% | 0.99% introductory rate for 10 months on balance transfers; no annual fee first year; apply by Sept. 30, 2026 | People who carry a balance or transferring debt |
| RBC Ion+ Visa | $48 | 20.99% | 22.99% | Get up to 28,000 Avion points (up to $200 of value in gift cards); apply by Nov. 4, 2026 | Those who want flexible earnings categories |
| TD Low Rate Visa Card | $25 | 12.90% | 12.90% | 0% promotional interest rate on purchases for first 6 months | People who carry a balance or finance purchases |
| MBNA True Line Mastercard | $0 | 12.99% | 24.99% cash advances; 17.99% balance transfers | 0% promotional rate for first 12 months on balance transfers completed within 90 days | People who want no annual fee and and balance transfer access |
| Capital One Guaranteed Mastercard | $0 | 21.9% to 29.9% | 21.9% to 29.9% | Guaranteed approval if conditions are met; security funds may be required | People building or rebuilding credit. |
Best rewards credit cards: How RBC Avion Visa Infinite compares
Rewards cards can offer strong value if you pay on time. The RBC Avion Visa Infinite is a travel rewards card with a $120 annual fee, a 20.99% purchase rate, and a 22.99% cash advance rate. It offers up to 70,000 Avion points, worth up to $1,500 in travel value, when you apply by November 25, 2026.
Here’s how it compares to other rewards cards on the market:
| Card | Annual Fee | Purchase Rate | Rewards | Current offer | Best suited for |
| RBC Ion+ Visa | $48 | 20.99% | 3x on grocery, dining, food delivery, rides, gas, EV charging, streaming, digital gaming, and subscriptions; 1x on all other qualifying purchases | Get up to 28,000 Avion points (up to $200 of value in gift cards); Apply by Nov. 4, 2026 | Those who want flexible earnings categories |
| RBC Avion Visa Infinite | $120 | 20.99% | 1.25x on travel; 1x on everyday purchases | Up to 70,000 Avion points, travel value up to $1,500; apply by Nov. 25, 2026 | Flexible travel rewards |
| BMO eclipse Visa Infinite Card | $120, first year waived | 21.99% | 5x points on groceries, gas, transit, dining, and takeout; 1x on everything else | Up to $1,150 in value, including up to 70,000 points and credits | Everyday spending rewards |
| CIBC Aventura Gold Visa Card | $139, first year rebated | 21.99% | 2 points per dollar spent on eligible travel through CIBC Rewards Centre; 1.5 points per dollar spent on gas, EV charging, groceries, and drug stores; 1 point per dollar on other purchases | Up to $1,600 in value | Travel perks with lower income requirement |
| American Express Gold Rewards Card | $250 | 21.99% | 2x on travel, gas, grocery, and drugstore purchases in Canada; 1x on everything else | Up to 60,000 Membership Rewards points | Travel coverage, lounge visits, and flexible points |
For someone looking for the best travel rewards credit card Canada option, the right choice depends on your spending habits, and travel style.
The RBC Avion Visa Infinite stands out for flexible flight redemptions with no blackout dates or seat restrictions, plus broad travel insurance.
How much interest do I pay on a rewards credit card vs. low interest card?
Here is where the math matters.
Say you carry a $1,000 balance for one year. On a rewards card with a 20.99% purchase rate, you could pay about $209.90 in annual interest if the balance stayed the same.
Now say you spent $500 per month on that card and earned $50 in rewards over the year. That sounds nice until you compare it to the interest. If you paid about $209.90 in interest and earned $50 in rewards, you are still behind by about $159.90.
With a low interest credit card at 12.99%, that same $1,000 balance would cost about $129.90 in annual interest. You may not earn rewards, but you could save about $80 in interest compared with the higher-rate rewards card.
| Rewards credit card | Low interest credit card | |
| Purchase interest rate | 20.99% | 12.99% |
| Balance carried | $1,000 | $1,000 |
| Estimates annual interest paid | $209.90 | $129.90 |
| Rewards earned | +$50 | $0 |
| New value after rewards and interest | -$159.90 | -$129.90 |
| Difference | About $30 in favour of the low interest card | |
In this example, the low interest card provides better value because the interest savings beat the rewards.
Is it worth getting a rewards credit card if I carry a balance?
Usually, no. Rewards may feel like a win, but interest charges can erase them surprisingly fast.
To break even on a $1,000 balance at 20.99%, you would need to earn about $210 in rewards just to cover the interest. That is a lot of points for most everyday cardholders. If your annual rewards are closer to $50 or $100, the interest costs can still put you behind.
This is why rewards cards work best for people who pay off their full balance on time. If you do that, the interest rate becomes less important because you’re not paying it. That’s the time to focus on earn rates, sign-up bonuses, travel perks, insurance, statement credits, and redemption value.
What credit card habits can help me save money?
Whichever type of card you choose, a few smart habits can help you get more value and avoid expensive surprises:
- Always pay more than the minimum monthly balance. Minimum payments keep your account in good standing, but they can stretch debt out for years and add a lot more interest along the way.
- Use rewards cards only for purchases you can pay off in full. If a purchase wasn't already in your budget, earning points doesn’t automatically make it a good deal.
- Take advantage of introductory annual percentage rate (APR) offers strategically. A promotional rate such as 0% or a low balance transfer offer can help reduce interest costs, but pay attention to how long the offer lasts and what the regular rate becomes afterward.
Reassess your card every year. Spending habits change. Maybe you're travelling more, carrying less debt, or using different spending categories. The best credit card for you today may not be the best one a year from now.
The bottom line: Low interest credit card vs reward credit card
If you carry a balance, a low interest credit card like the RBC Visa Classic Low Rate Option will often give you better value than a rewards card. The savings from lower rate cards like this one can beat the points, perks, or cash back you might earn.
If you pay your balance in full each month, rewards cards like the RBC Avion Visa Infinite can help you get more from travel, everyday spending, and perks. The best credit card is not always the flashiest one. It is the one that fits how you actually spend and repay.