Low interest credit cards are arguably the most accessible type of plastic. With low income requirements and interest rates to match, these cards are ideal if you carry a balance from month to month and want to minimize the amount you pay in interest charges.
Most credit cards in Canada charge an interest rate of 19.99% for purchases (it’s even more for cash advances). Remember, credit card interest compounds, and not in a good way — the longer you let charges accumulate, the longer it takes to pay off your balance.
Enter the American Express Essential Credit Card. Introduced in 2016, it has no annual fee, and offers a low interest rate of 8.99% on purchases and cash advances — currently the lowest fixed rate in Canada. If you need to pay down existing credit card debt, it offers new cardholders a competitive 1.99% interest rate on balance transfers.
Low interest credit cards typically have one main trade-off: fewer (or no) rewards. However, rewards such as cash back or travel points are only valuable if you pay off your balance in full every month. This card has a different type of reward: access to American Express Invites, which includes ticket pre-sales and reserved seats for concerts, movie screenings, and culinary events, plus other special offers. Canadian cardholders can also access pre-sales for select concerts and events in the U.S.
If you’re planning to make a large purchase, this card comes with buyer’s assurance protection, which doubles the manufacturer’s warranty up to an additional year, and purchase protection, which insures eligible items against physical damage or theft. If you’re taking a vacation and travelling on a common carrier (plane, train, bus, or ship), charge your tickets to the card and you’ll also get up to $100,000 in travel accident insurance. American Express cards are also compatible with Apple Pay.
Like many low interest credit cards, there’s a caveat: if you miss two monthly minimum payments within one year, the interest rate jumps to 23.99%. If you miss two consecutive minimum payments, or three minimum payments within one year, it goes up to 26.99%. If you’re not paying off your balance in full, you need to obey the cardinal rule of credit cards: at least make the minimum payment as listed on your monthly statement.
If you’re looking for American Express benefits, this is a good entry level card and a strong contender overall among the best low interest credit cards in Canada. With no annual fee and a low interest rate, this makes a good companion card if you already have a cash back or travel rewards credit card.
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