It’s a phrase frequently parroted in personal finance journalism, but what exactly does “best credit card” mean, anyway? The truth is, there’s no single “best” credit card in Canada (if there was, we would tell you about it).
The best credit card for you is one that suits your spending habits and saves you money or creates value, whether it’s through a low interest rate, cash back, travel miles and rewards, or points redeemed for merchandise, gift cards, and experiences—everything from VIP tickets for concerts and sporting events to weekend ski or wine country getaways.
For 2017, we’ve done the legwork and rounded up what we consider to be the best credit cards in Canada in their respective categories:
Best cash-back credit cards
Introduced in March 2016, the Tangerine Money-Back Credit Card has created a lot of buzz for its versatility: it has no annual fee, and offers 4% cash back on purchases made within the first three months in up to three categories of your choice, expanding beyond the usual categories of groceries, gas, drugstore, and recurring bills to include entertainment, furniture, hotel-motel stays, home improvement, public transportation, and parking. After the welcome period ends, you’ll earn 2% cash back in your chosen categories (1% on everything else), with no limit on how much you can earn back. Because of all this, we also rank this card as one of the best no fee credit cards in Canada.
One advantage this card has over others is that it refunds cash back monthly, rather than annually. You can also change your bonus categories to suit your needs. If you decide instead to deposit your cash back rewards into a Tangerine Savings Account, you’ll get a third category earning 2%.
MBNA Rewards MasterCard credit card for students
The MBNA Rewards MasterCard is a cash-back credit card geared toward students, with no minimum income or credit history required. Plus, there’s no annual fee. With this card’s cash back option, you’ll earn one MBNA Rewards point for every dollar spend on the card, which means 1% cash back on all purchases. Alternatively, you can redeem your MBNA points toward travel, charitable donations, or brand-name merchandise and gift cards.
However, we’re highlighting this card because the cash back option offers the best value: your first purchase on the card nets you 1,000 bonus points ($10), and you’ll get another 1,000 bonus points every year on the anniversary of your credit card activation.
Best travel rewards credit cards
With the BMO World Elite MasterCard, you’ll earn two BMO Rewards points for every dollar spent, giving you 2% back in travel rewards. Unlike some travel rewards programs, which cover the cost of a flight with points but require you to pay taxes and fees in cash, BMO Rewards lets you redeem points for the entire cost of a plane ticket—that includes taxes and fees. As a sign-up bonus, your first purchase on the card will net you 20,000 bonus points, which equals $200 that can be used toward travel perks.
One thing that sets this card apart from the pack is the annual Priority Pass membership, allowing you VIP airport lounge access in more than 400 cities across the world plus four complimentary passes per year, valued at US$200. The card’s benefits come at a cost: it has an annual fee of $150, so it’s for high earners and big spenders.
American Express Gold Rewards Card
With the American Express Gold Rewards Card, you can earn two Membership Rewards points for every dollar spent on eligible purchases at grocery stores, gas stations and drugstores, and one point per dollar on everything else. The same two points per dollar deal also applies to travel purchase such as flights, hotels, car rentals and cruises. The card has an annual fee of $150, which is waived for the first year. If you make at least $1,500 in purchases with the card within the first three months, you’ll get a sign-up bonus of 25,000 Membership Rewards points, worth $250. With the Gold Rewards card, you can also transfer points to several other travel rewards programs, including on a 1:1 basis to Aeroplan Miles or British Airways’ Avois.
Best low interest credit card
If you carry a balance from month to month, you should focus on finding the best low interest credit card so you can pay off your balance faster. The BMO Preferred Rate MasterCard is a straightforward, no-frills card with a $20 annual fee and a low interest rate of 11.9%, compared to the 19.99% rate most credit cards carry. But be aware: if you don’t make your minimum monthly payment, your interest rate on purchases, cash advances, and other charges jumps to 16.9%.
Best no-fee credit card
Alongside Tangerine’s card, the SimplyCash Card from American Express is one of the best no-free credit cards in Canada for the returns it offers: for the first six months, you can earn 5% cash back in all gas, grocery, and restaurant purchases (up to $250). After that, you’ll get 1.25% cash back on all purchases, with no limit on how much you can earn.
For new cardholders, there’s also an optional balance transfer offer: if you apply online, you’ll receive a 0% introductory interest rate on all credit card balances transferred within the first six months. Note that a 1% balance transfer fee will be charged on the transaction amount.
Best credit card for rebuilding credit
For people with bad credit or past bankruptcy, secured credit cards are a way to rebuild your credit score and prove you can be responsible with monthly payments. Unlike other high-interest secured credit cards, the Peoples Trust Secured MasterCard has a low rate of 12.99% on purchases (24.5% on cash advances). It requires a security deposit between $500 and $25,000, which acts as collateral in case you don’t pay off the card’s balance. Your credit limit is set by the amount you deposit. In turn, your deposit will be returned to you when you close the account. The card charges a monthly fee of $5.80, or $69.60 per year.
Best balance transfer credit card
We’ve chosen the MBNA Platinum Plus MasterCard as the best balance transfer credit card in Canada because it offers a 0% promotional annual interest rate on balance transfers for the first 12 months, compared to the six-month window that most cards offer. This means that after paying a balance transfer fee of 1%, you won’t pay a cent of interest on the amount you transferred for an entire year. Because your hard-earned money won’t be lost to interest charges, you’ll be able to pay down your balance faster.
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