While the CIBC Select Visa doesn’t have the allure of a rewards credit card – offering neither points or cash back – it doesn’t charge the high interest rates synonymous with rewards cards either. If you’re in a cash crunch, regularly carry a balance month-to-month, or are apprehensive about racking up high interest debt, the CIBC Select Visa may just be the ideal fit for your wallet.
CIBC Select Visa – Quick review
The pros
- The card has a below-average APR of 13.99% – which is between six and nine percentage points below the conventional interest rate found on most credit cards.
- Its low 13.99% APR applies to all types of transactions – from everyday purchases to balance transfers and even cash advances.
- The card’s interest rate is fixed and won’t fluctuate based on your credit rating or CIBC’s prime lending rate.
- The CIBC Select Visa has a low annual of just $29, which is rebated for the first year for new cardholders.
- The card has a household annual income requirement of just $15,000.
- Since it’s issued by CIBC – one of Canada’s big five banks – it’s an ideal fit if you value the simplicity of keeping all your daily bank accounts (chequing, savings, and credit card) with a single trusted institution.
- A rarity for a low interest credit card, the CIBC Select Visa offers travel insurance benefits in the form of $100,000 in common carrier accident coverage.
The cons
CIBC Select Visa – Detailed review
Low purchase interest rate
What do you do when your credit card statement arrives every month?
If you pay your balance owing in full, you won’t be on the hook for any interest charges. But, if you pay only a portion of your balance back and carry over the rest to the next month, you’re effectively borrowing money – and like in any instance when you’re borrowing money from a bank, like with a loan – you’ll have to pay interest for the privilege.
Most rewards credit cards charge an annual interest rate of 19.99% (or a daily interest rate of 0.055%) on any balance you owe. As one of Canada’s best low interest cards, the CIBC Select Visa charges just 13.99% (or a daily interest rate of 0.039%).
Due to the role of interest rates, having a rewards credit card is rarely ever worth it if you carry credit card debt – since you’ll owe far more in interest than you’d otherwise earn in points or cash back – and a low interest card like the CIBC Select Visa will be far more beneficial for your bottom line.
Another great feature of the CIBC Select Visa: it’s interest rate is fixed, which means it won’t change regardless of your credit rating or CIBC’s prime lending rate.
Here’s a simplified example of how much interest you can save with the CIBC Select Visa versus a conventional rewards credit card.
The scenario:
- $4,000 in credit card debt is owed
- Payments of $250 are made towards the credit card every month
|
Rewards credit card |
CIBC Select Visa |
| Interest rate |
19.99% |
13.99% |
| Balance owed |
$4,000 |
$4,000 |
| Your monthly payments |
$250 |
$250 |
| Months until balanced is paid |
19 |
18 |
| Total interest owed |
$691 |
$454 |
As you can see, with the CIBC Select, you’d save roughly $237 in interest charges by using the CIBC Select Visa.
Even if you earned 2% cash back on the rewards credit card, you’d still owe $611 ($691 in interest charges minus $80 in cash back), meaning the CIBC Select Visa would be the better overall choice even though it earns no rewards of its own.
Low cash advance and balance transfer rates
Aside from offering a low interest rate on everyday purchases, the CIBC Select Visa’s below-average APR also applies to both cash advances and balance transfers.
In the case of cash advances – any money you borrow from your credit card in the form of cash from the ATM will accumulate interest at an annual rate of 13.99%. That’s considerably below the average of 22.99% charged by most conventional credit cards (and even some low interest cards, like the MBNA True Line Mastercard). Note though, interest will start to accumulate right away with no grace period and there may be additional withdrawal fees you’ll need to account for. Cash advances are also limited to a maximum of $1,000 per day – depending on how much available credit you have. As a general rule of thumb, a cash advance should always be a last resort and only be used when you absolutely need immediate access to cash funds and have no other options.
For balance transfers, you can move the debt you owe on an existing credit card over to the CIBC Select Visa. The idea being you transfer debt from a card with a high interest rate (19.99% APR or above) to the CIBC Select Visa (13.99%) and pay it off at a lower rate. It’s worth highlighting the CIBC Select Visa doesn’t currently come with a balance transfer promotion, so the 13.99% APR won’t expire or increase after a set period of time – provided you make all your payments on time each and every month of course.
Fees and application requirements
The CIBC Select Visa does charge an annual fee, though it’s just $29. If you’re a new CIBC cardholder, this fee will be rebated for your first year, so you can set aside more money towards paying down any debts. In more good news, you won’t have to pay any annual fees when adding up to three authorized users.
To qualify for the card, you’ll need to earn an annual income of at least $15,000 across your entire household. Applicants with a good credit score of at least 660 have higher odds of approval. We recommended checking your own credit score before applying to see if you fall within that range (note, if you have a fair or poor credit rating, you may want to consider a secured credit card instead).
Perks
Low interest credit cards are designed to help you stay on budget and get a better handle on your debt, so it’s not surprising to find the CIBC Select Visa doesn’t offer a slew of perks. All that said, it does set itself apart by providing cardholders with up to $100,000 in complimentary common carrier accident insurance. In the event of an accident that takes place while you’re occupying a common carrier (like a commercial airliner, bus or train), this coverage will reimburse you for certain injuries.
Cardholders can also save up to 25% when booking a rental car at eligible Avis or Budget locations, which can add up to a considerable chunk of savings on your next road trip.
As is typical for any credit card, CIBC Select Visa cardholders will also receive purchase protection (items purchased with your card can be reimbursed in the event of loss, theft, or damage up to 90 days after the purchase date) and extended warranty insurance (the manufacturer’s warranty is automatically doubled for up to one additional year).
Does the CIBC Select Visa have any drawbacks?
While the CIBC Select Visa is one of the top low interest credit cards in the country, it does have drawbacks when pitted against some of its competition.
Namely in the annual fee department.
For instance, the MBNA True Line Mastercard is another low interest card that manages to offer an APR of just 12.99% (one percentage point below that of the CIBC Select Visa) on both purchases and balance transfers yet it doesn’t charge any annual fees. The BMO Preferred Rate Mastercard is another card from a big bank that has a slightly lower interest rate of 12.99% but charges an annual fee of just $20 (versus the CIBC Select Visa’s $29 annual fee).
The CIBC Select Visa also currently lacks any promotional balance transfer offer. Balance transfer promotions offer rock-bottom interest rates (4% or below) for a limited time (nine months or less) on debts moved from one credit card to another. The benefit of such an offer is it allows cardholders to transfer a balance owed on their current credit card and pay it off a tiny fraction of the usual interest rate to get their debt repayment journey off to a rapid start. Some of the best balance transfer cards in Canada currently include the BMO Preferred Rate Mastercard and PC Financial Mastercard.
The bottom line
The CIBC Select Visa is one of the best and easiest-to-obtain low interest credit cards in Canada, and can help virtually anyone get a better handle on their monthly interest payments and credit card debt. That said, cards like the MBNA True Line and BMO Preferred, give the CIBC Select Visa a run for its money with slightly lower rates and annual fees. Before you apply for any card, compare your options with Ratehub’s CardFinder tool.
