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The best low interest credit cards in Canada

Do you regularly carry a balance? Quickly see which cards offer the lowest rates to save on interest and pay off your debt sooner.

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Best low interest credit cards

Compare Canada's best low interest credit cards

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If you frequently carry a balance from month-to-month, don't chase rewards on a high-interest credit card but go with a low rate option instead. Save on your interest payments and get matched with the lowest APR credit cards on the market now.

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5 things to know about low interest credit cards

1. They help you save on interest 

If you tend to carry a credit card balance from month-to-month, you should definitely consider a low interest credit card over a rewards credit card. 

Many rewards credit cards have interest rates as high as 19.99%. If you compare this to our pick of the best low interest credit card in Canada (MBNA True Line Gold) which has an interest rate of 8.99%, your monthly payments will be cut in half. Remember, rewards aren't ever worth chasing if you're carrying a balance and paying interest.

Here’s a side-by-side comparison of how much you’d save with the low interest MBNA True Line Gold versus a typical rewards credit card if you carried a balance of $3,000 and made payments of $200 each month.

 

MBNA TrueLine Gold

Typical Rewards Card

APR

8.99%

19.99%

Balance 

$3,000

$3,000

Your monthly payments

$200

$200

Total interest owed

$194.31

$480.99

Time until debt is repaid

1.3 years

1.5 years

2. They have low annual fees

Low interest credit cards tend to have lower annual fees. Depending on which card you choose, you can expect an annual fee of anywhere from $0 to $39. That's nothing compared to the $120 or $150 annual fee you might find on some of the best rewards credit cards.

3. They can help you pay off past credit card debts faster

By taking advantage of a balance transfer, you can move the debt you owe on your current credit card over to a low interest card and save on high interest payments in the process. Some low interest cards even come with introductory balance transfer promotions that offer extremely low rates (we’re talking in the single digits) for a limited period of time to help pay off debt even quicker. Just be aware that most low interest credit cards will charge you a flat fee (usually 1% - 3% of your debt) on balance transfers.

4. They rarely offer rewards

One disadvantage of a low interest credit card is it won’t provide the extensive benefits and rewards you’d get with a rewards card. Typically, there’s no way to earn points or cash back on your spending. And your benefits (such as travel insurance) are highly limited.

All that said, low interest cards are still well worth it considering you’ll save a whole lot more on interest payments than you’d earn in rewards anyway. What’s 1% cash back in comparison to saving between 7% to 11% in interest annually.

5. Their cash advance rates may be higher

While some low interest interest credit cards offer low rates on all types of transactions, some do charge high rates for cash advances. We wouldn’t recommend making cash advances with your low interest credit card (or any card for that matter) but if it’s something you’re looking to use, just make sure to shop around and find a card that offers low rates across the board.

Summary (+/-)

Author bio

Luke Sheehan, VP of Marketing

As Vice President of Marketing at Ratehub.ca, Luke splits his time between coming up with ways to inspire Canadians to choose better personal finance and serving as our resident credit card expert. His insights and tips on credit card points programs, maximizing rewards and minimizing interest, and the major moves made by the big banks have been shared on CTV News, CBS News, Huffington Post, CP24, Newstalk1010, and more. Originally hailing from the United Kingdom, Luke made the move to Toronto in February 2012 as a member of the leadership team at Just Eat and has held senior marketing roles across a variety of sectors including e-commerce, real estate, and now, fintech.

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