The best credit cards for newcomers to Canada

If you don’t qualify for the banks’ newcomers 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 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.

Pros

• Guaranteed approval with no credit check
• Start with as little as $50 security funds
• Earn up to 5% cash back at select retailers
• No annual fee
• Build credit history in Canada

Cons

• Security deposit equal to credit limit required
• High purchase interest rate of up to 29.99%
• No additional credit card perks

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%.

Pros

• Guaranteed approval with no credit check
• No annual fee
• Low interest rate option available
• Build credit history in Canada

Cons

• Security deposit equal to credit limit required
• Minimum security deposit of $500
• No rewards or additional credit card perks

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:

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.

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 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 $1,300 in value in the first 12 months, including up to 40,000 bonus Scene+ points and first year annual fee waived. Offer ends July 1, 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.

Pros

• Earn up to 3 Scene+ points per dollar spent
• Welcome bonus: earn up to $1,300 in value in the first 12 months, including up to 40,000 bonus Scene+ points and first year annual fee waived. Offer ends July 1, 2024.
• No foreign transaction fees
• 6 complimentary airport lounge passes per year
• Discount on car rentals and hotels

Cons

• $150 annual fee
• $60,000 minimum income requirement
• High 20.99% interest rate on purchases

The CIBC Dividend Platinum Visa Card is available to new Canadians with no credit history, and CIBC has sweetened the deal by offering to refund the annual fee for you and up to three authorized users for two years. 

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.

As a newcomer to Canada, you can use this card to send money back home with no fees via a CIBC Global Money Transfer. But be aware that you’ll pay the cash interest rate of 20.99% with no grace period.

Pros

• Annual fee rebate for 2 years for new Canadians
• Earn up to 3% cash back on purchases
• Save up to 10¢ per litre on gas at participating Pioneer, Chevron and Ultramar stations
• Save 25% at participating Avis and Budget locations
• Send money overseas with no fees
• Qualify with household income as low as $15,000

Cons

• High 20.99% interest rate on purchases
• Foreign exchange fees apply
• Limited travel insurance coverage

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. 

Pros

• Earn up to five rewards points per 1$ spent
• Excellent travel insurance coverage
• Access to National Bank Lounge at Montreal-Trudeau Airport
• Reimbursement of up to $150 on common travel expenses
• Mobile device insurance

Cons

• $150 annual fee
• $80,000 minimum income requirement
• High 20.99% interest rate on purchases

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. Get one while you can

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 only within the first few years.

Once these programs have expired, your options for establishing credit will be limited. Most likely, you’ll have to start with a secured credit card that requires a security deposit and has a restrictively low credit limit.

3. 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.

4. 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.

5. Borrow when money’s tight

When you first move to Canada, you might come up against unexpected expenses and other setbacks. Having a credit card can provide a valuable cushion for when you don’t quite have enough to pay the bills.

Credit cards have very high interest rates, however, so look for alternatives if you need to borrow money on an ongoing basis.

What to look for in a credit card for newcomers?

Credit cards in Canada are like snowflakes – no two are alike. But there are a few particular features you should keep an eye on when selecting one, especially as a newcomer to Canada.

• 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.