The best credit cards for newcomers to Canada

If you don’t qualify for the banks’ newcomer programs, you can still get a great credit card by providing a security deposit equal to the credit limit. The NEO Secured Credit Card is one such option, allowing you to get a credit card and start building credit history in Canada. 

The NEO Secured Credit Card offers guaranteed approval. You can start with as little as $50 and raise or lower your credit limit at any time. As with any other card, you will need to make regular payments on time each month and interest charges will apply if you don’t pay your balance in full by the deadline. This card also rewards you with a minimum of 0.5% cash back on purchases, plus 5% cash back at select retailers. And because it has the Mastercard badge, you can use it just about anywhere.

The Koho Essential card is a prepaid card which allows you to set your spending limit yourself - a great option if you don’t yet have a steady income or are building your credit score. You can use the plan with no monthly fee if you set up a direct deposit or keep at least $1,000 in your account at all times. You can also pay for an optional credit building service to help you build your credit score in Canada for $10 a month. You’ll also earn interest on your balance to help you grow your money further. With the higher-tier plans like Koho Extra or Koho Everything, you won’t pay foreign transaction fees which is great if you’re visiting home. You’ll also get higher rates of cash back on your purchases with those plans - but you’ll have to pay a monthly fee.

To be eligible for a Koho card, you just need a valid photo ID which may be your Canadian or foreign passport, your driver’s license or provincial photo ID card, your Permanent Resident card or a provincial health card with a photo from Quebec or British Columbia.

The best credit cards for newcomers have valuable rewards programs, excellent travel insurance, and other benefits that cater to your unique needs as you settle into your new home. A few of the best credit cards for new immigrants to Canada include:

Another good secured credit card option is the Home Trust Secured Visa card. This card offers guaranteed approval and reports your payments to the credit bureaus, helping you establish a credit history in Canada.

This card has a higher minimum balance (and minimum security deposit) of $500, and you can raise your credit limit as high as $10,000 by providing additional security funds.

The Home Trust Secured Visa card has no annual fee, and a regular purchase interest rate of 19.99%. If you want to carry a balance and prefer a lower rate, you can elect to pay an annual fee of $59 to reduce your interest rate to 14.90%.

The Scotiabank Passport Visa Infinite Card is one of the best credit cards in Canada, and you can get a credit limit of up to $15,000 with no credit history if you’re a new permanent resident or foreign worker. Plus, you won't pay the annual fee for the first year. 

This card lets you earn Scene+ points, which can be redeemed for a wide variety of merchandise and travel. You’ll earn 3 points per dollar spent on eligible groceries, 2 points per dollar spent on restaurants, entertainment and daily transit, and 1 point per dollar spent on everything else. If you meet certain spending requirements, you can earn up to $1,100 in value in the first 12 months, including up to 35,000 bonus Scene+ points. To qualify, apply by October 31, 2024.

In addition to great rewards, this card comes with perks that will make your next trip home a lot more comfortable. Benefits include 6 complimentary airport lounge passes per year, discounts on hotels and car rentals, and comprehensive travel insurance benefits. And as an added bonus, you’ll pay no foreign transaction fees when you use your card outside of Canada. The purchase interest rate is higher than secured or low-interest credit cards, though, so keep up with your payments to benefit from the value of rewards points, otherwise you’ll pay more in interest on your unpaid balance than you’d earn with rewards. Learn more about other newcomer banking offers through Scotiabank’s Startright Program.

The CIBC Dividend Platinum Visa Card is available to new Canadians with no credit history as part of their New to Canada Banking offer. CIBC has sweetened the deal by offering to refund the annual fee for you and up to three authorized users for two years. You have to apply for the CIBC Smart chequing account as well - which currently offers a generous welcome bonus at Costco.

With this card, you’ll earn cash back rewards on every purchase. You’ll earn 3% cash back on groceries, gas and electric vehicle charging, 2% cash back on transportation, restaurants and bills, and 1% cash back on everything else. You can also save up to 10¢ per litre on gas by linking your Journie Rewards account, and save up to 25% on car rentals. Remember that while this card offers great cash back rates, the purchase interest rate is fairly high so you'll have to keep up with your payments.

As a newcomer to Canada, you can use this card to send money back home with no foreign transaction fees via a CIBC Global Money Transfer. Transfers will be subject to foreign exchange rates, though. 

National Bank is Canada’s sixth-largest bank and has one of the country’s most competitive offers for new immigrants. This card is available to newcomers with no credit history and offers great travel exclusives for when you head home.

The National Bank World Elite Mastercard rewards you with five points per $1 spent on groceries and restaurants, two points per $1 spent on bills, travel and fuel, and one point per $1 spent on everything else. Points are worth up to 1¢ each when redeemed for travel.

Other perks include comprehensive travel insurance, unlimited access to National Bank Lounge at Montreal-Trudeau Airport, and a $150 annual travel allowance. Keep in mind that with these perks, though, comes a higher (although standard) interest rate on purchases, so just be sure you can keep up with paying off your balance in full. 

The RBC Cash Back Mastercard is a great no-fee cash back credit card for newcomers to Canada. If you open an eligible bank account, you’ll get a very generous welcome bonus with this credit card: This card does not have a welcome offer at this time.. The regular cash back rate is pretty good, too, for a no-fee card. You’ll get 2% cash back on groceries but only on the first $6,000 spent annually, then you’ll earn 1%. On all other purchases, you’ll get an unlimited 0.5% on the first $6,000 spent annually, which isn’t the most competitive rate. But after that, you’ll get 1% cash back which is fairly standard. Note that to be eligible for the card as a permanent resident, foreign worker or international student, you need to apply through the RBC Newcomers to Canada program.

Why do you need a credit card?

There are many benefits to getting a credit card when you first move to Canada. Not only is it a convenient way to pay for purchases, it’s one of the easiest ways to build credit for your future borrowing needs.

Also read: The best secured credit cards in 2023

1. Establish your credit history

To borrow money in Canada, you need to have a good history of managing debt responsibly. Whether you need a mortgage to buy a home, a loan to get a new car, or a line of credit, the lender will want to see a long history of payments made on time.

One of the easiest ways to establish a credit history in Canada is by getting a credit card. Each time you make a payment, it will be recorded on your credit report. As you continue making your payments on time, your credit score will go up, enabling you to access more and better borrowing products.

Also read: Financial tips for newcomers 

2. Make payments easily

Digital payments are quickly becoming the preferred payment method in Canada. Cheques are almost never accepted, and some businesses have even stopped accepting cash. But you can use a credit card just about anywhere. You can even tap your credit card to pay for public transit in many Canadian cities.

3. Earn credit card rewards

Many of the best credit cards in Canada offer rewards and cash back as an incentive for using your card. As you spend, you’ll earn points you can redeem for travel or merchandise, or get a percentage of your purchases back in cash.

What to look for in a credit card for newcomers?

There are a few particular features you should keep an eye on when selecting a credit card, especially as a newcomer to Canada.

• Offer period: When you first move to Canada, you may be eligible for special programs that allow you to get a first credit card without any credit history – but generally only within the first five years since you arrived, so try to get a credit card ASAP.
• Approval with no credit history: Most credit cards require a minimum credit score to be approved, however many lenders have special exceptions for newcomers to Canada who have received permanent resident or landed immigrant status within the last five years. Look for cards that offer approval for newcomers with no credit history before going to alternatives.
• Annual fee: Credit cards in Canada have an annual fee ranging from $0 to $150 and up. The fee is typically commensurate with the rewards and features offered, but not always. If you pay your balance in full each month, you can often earn more in rewards than you’ll spend on the annual fee. Many cards waive this fee in the first year, and some offer extended no-fee benefits for newcomers.
• Rewards earned: The Canadian credit card landscape is filled with different rewards programs, each offering a slightly different experience. It can be difficult navigating the different rewards categories, earning rates, and redemption values, so compare credit cards online to find the card that will be most rewarding for you.
• Income requirements: While you don’t necessarily need a credit history in Canada to get a credit card, you will need to meet other qualifying requirements like a minimum income. Some cards require individual income of up to $80,000 per year, while others have no income requirement. You may be able to qualify for a card without meeting the income requirements if you can prove you have high net worth.