Having poor, less-than-perfect, or no credit in Canada doesn’t mean you cannot use a credit card. While you might not qualify for high-limit cards, there are numerous credit cards for bad credit in Canada.
Whether you’re looking to build your credit history as a newcomer to Canada, or seeking to rebuild a damaged credit score, there are several credit cards for people with bad credit in Canada that could be the perfect fit.
In this blog post, we’ve compiled a list of the best credit cards for bad credit in Canada. These cards not only assist you in rebuilding your credit but also offer additional benefits such as travel insurance, purchase protections, and even opportunities to earn cash back and rewards.
Summary of the Best Credit Card for Bad Credit in Canada
Credit Card | Type | Best for | Credit Score | Annual Fee |
Secured | Earning Cash Back | Fair – Poor | $0 | |
Secured | Easy Approval | Poor | $59 | |
Secured | Residents of Alberta | Poor | $49 | |
Secured | Residents of BC | Poor | $0 - $395 | |
Unsecured | Cash back | Fair | $0 | |
Unsecured | Low-fee credit card | Fair | $29 | |
Unsecured | Low interest rates | Fair | $20 | |
Unsecured | No-fee credit card | Fair | $0 | |
Prepaid | Travel | Poor | $6.95 | |
Prepaid | Earning interest | Poor | $0 | |
Guaranteed approval | Guaranteed credit card | Poor | $59 | |
Guaranteed approval | Credit building and guaranteed approval | Poor | $48 |
The Best Secured Credit Cards for Bad Credit in Canada
Secured credit cards offer a valuable opportunity for individuals looking to build or rebuild their credit. With these cards, you can boost your credit score by putting down an upfront deposit with the credit card issuer, which is known as the security deposit.
This deposit acts as your credit limit and is usually equal to the amount of credit available on the card. Every time you make a payment on your card, it gets reported to credit bureaus, helping you build or rebuild your credit history.
Secured credit cards are often the easiest to obtain approval for, as they pose minimal risk to the card issuer. Your deposit serves as collateral in case of missed payments or debt default. Though your deposit remains tied up and unable to earn interest elsewhere, starting with a secured credit card can be a stepping stone towards obtaining an unsecured card in the future.
Neo Secured Mastercard
- Annual fee: $0
- Welcome bonus: Up to 15% cash back on your first purchase at participating merchants
- Purchase rate: 19.99%-24.99%
- Cash advance rate: 21.99-26.99%
- Eligibility requirements: Must be able to provide the $50 minimum deposit.
The Neo Secured Card stands out as a top choice among Canadians seeking a secured credit card. With unlimited cashback rewards available at numerous participating stores and an impressive earn rate of up to 5% cashback, it’s no wonder this card has gained popularity.
One of the key features setting the Neo Secured Mastercard apart is its lucrative cashback rewards program. Additionally, it boasts the lowest minimum deposit requirement among secured credit cards in Canada, asking for just $50 to get started.
The Neo Secured Credit Card’s distinction lies in being the sole secured credit card in Canada offering cashback rewards. What’s more, the convenience of downloading a virtual card means you can shop without the need for physical plastic.
Home Trust Secured No Fee Visa
- Annual fee: $0
- Interest rate: 19.99%
- Perks: Zero Liability policy
- Eligibility requirements: Must be able to provide the $500 minimum deposit.
Considered among the top secured credit cards in Canada, the Home Trust Secured Visa Card boasts high approval rates, making it accessible for those looking to build their credit.
For newcomers to Canada or young adults embarking on their credit-building journey, the Home Trust Secured No Fee Visa is an excellent option. With a standard purchase interest rate of 19.99% and no annual fee, the card is the perfect fit. Nearly everyone who applies and can provide the deposit is approved.
ATB Alberta Secured Mastercard
- Annual fee: $49 ($25 for additional card)
- Interest rate: 19.99%/22.99%
- Forex fee: 2.9%
If you reside in Alberta, the ATB Secured Mastercard is an excellent opportunity to start building your credit score. This credit card requires a minimum security deposit of $500.
Here’s how the collateral works: it’s held until your credit rating is established or until you decide to close the account. Unlike many other secured cards that only return the deposit upon account closure, the ATB Secured Mastercard offers a more flexible approach.
Vancity Enviro Secured Card
- Annual fee: $0 – $395
- Interest rates: 11.25% to 19.5%
For British Columbia residents seeking a secured credit card, the Vancity Enviro Secured Card is an appealing option.
Unlike typical secured cards that hold your deposit as security, Vancity places your deposit into a savings account. However, it’s not just any savings account, it’s a term deposit account. This means that while your deposit remains in the account, you’ll actually earn interest on it. Your deposited amount determines your maximum credit limit.
The Best Unsecured Credit Cards for Bad Credit in Canada
An unsecured credit card is an excellent choice for individuals with less-than-ideal credit scores. With no requirement for a security deposit, these cards allow you to earn rewards such as cash back or points on your purchases.
They are a convenient choice for most Canadians with bad credit who want to enjoy the perks of a traditional credit card. However, securing approval for unsecured cards can be more challenging.
Tangerine Money-Back Mastercard
- Annual fee: $0
- Earn rate: Up to 2% cash back in up to 3 categories of your choice
- Interest rate: 19.95% on purchases
- Perks: Free purchase protection & extended warranty
The Tangerine Money-Back Mastercard is one of the most popular no-fee cashback credit cards in Canada. With this card, you can earn up to 2% cash back on all purchases, a generous offer considering there’s no annual fee.
For those looking to transfer balances, the card currently offers a promotional balance transfer rate of 1.95% within the first 6 months. Plus, as a welcome bonus, you can enjoy up to 10% extra cash-back rewards for the first 2 months.
Additionally, it includes complimentary purchase protection and extended warranty coverage at no additional cost. However, to qualify for this card, you need to have a minimum annual income of $12,000 and no previous bankruptcies within the last 7 years.
Scotiabank Value Visa
- Annual Fee: $29 (first year waived)
- Welcome Bonus: Zero introductory rate on cash advances for the first 6 months
- Interest Rate: 12.99% on purchases
- Perks: 25% off car rentals at participating AVIS & Budget rental locations and more.
The Scotiabank Value Visa card is an excellent option for those seeking a low-fee credit card. With a modest $29 annual fee (waived in the first year) and a competitive 12.99% interest rate on purchases, it offers affordability and convenience. Currently, Scotiabank is also offering a promotional 0% rate on cash advances for the initial 6 months.
Moreover, you can enjoy perks such as a 25% discount on car rentals at AVIS and Budget locations throughout Canada and the US. The eligibility criteria for this card are lenient, requiring only a minimum annual income of $12,000 and no bankruptcies within the last 7 years. This accessibility makes it easy for many individuals to qualify for and benefit from this credit card.
BMO Preferred Rate Mastercard
- Annual Fee: $20 (waived for the first year)
- Welcome Bonus: 3.99% introductory rate on balance transfers for 9 months
- Interest Rate: 12.99% purchase rate
- Perks: Free purchase protection & extended warranty; zero liability coverage against unauthorized card use
The BMO Preferred Rate Mastercard is one of the credit cards offering the lowest rates available in Canada. This low-fee card boasts a highly competitive purchase rate of 12.99%.
While it doesn’t feature a points system, its offers remarkably low interest rates. Plus, for the first 9 months, cardholders can benefit from an ultra-low balance transfer rate of 3.99%.
Additionally, the card offers complimentary purchase protection, extended warranty coverage, and safeguards against fraudulent card use. However, to qualify, you must have a minimum annual income of $15,000 and no prior bankruptcies within the last 7 years.
PC Financial Mastercard
- Annual Fee: $0
- Interest Rate: 20.97% purchase rate
- Perks: Purchase protection and extended warranty
The PC Financial Mastercard is another popular no-fee credit card among Canadians. With this card, you’ll earn a minimum of 10 points per dollar spent at participating merchants, which can be redeemed once you’ve accumulated 10,000 points. It’s relatively easy to get approved for and can be used to build or improve your credit. However, you must have a minimum credit score of 560.
The Best Prepaid Credit Cards for Bad Credit in Canada
Prepaid cards operate similarly to regular credit cards, but instead of making purchases on credit, you’re using funds you’ve already loaded onto the card. Which means they require a sufficient account balance before transactions can be made.
Unlike secured credit cards, prepaid credit cards do not involve a deposit or interest rate; instead, they maintain a balance that cannot go into the negative.
While secured credit cards offer a path to building credit, prepaid cards do not contribute to your credit history as the transactions are not reported to credit bureaus. However, some prepaid cards offer a credit-building feature for an additional fee. This feature enables you to enhance your credit with each timely payment.
BMO Prepaid Travel Mastercard
- Annual fee: $6.95.
- Perks: Extended warranty and purchase protection.
- Forex fees: 2.5%.
- Security features: Zero liability and BMO alerts.
The BMO Prepaid Travel Mastercard provides the convenience of a credit card without the accompanying stress. With its array of built-in security features, it’s particularly well-suited for travellers.
Choosing the BMO Prepaid Travel Mastercard is a wise decision for travellers, as BMO is widely accepted globally, offering a safer and more convenient alternative to carrying cash.
KOHO Prepaid Mastercard
- Annual fee: $0
- Earn rate: 1% cash back earned on groceries, bills and services, and 0.5% interest on card balance
- Forex fee: 1.5%
The KOHO Prepaid Mastercard stands out as one of the best prepaid cards in Canada, thanks to its extensive acceptance, impressive cashback rewards, budgeting tools, and reduced foreign exchange fees.
While prepaid cards typically lack benefits, the KOHO Prepaid Mastercard breaks the mould by offering cashback rewards and the opportunity to earn interest on your balance, akin to a savings account. Additionally, it boasts below-average foreign exchange fees.
Guaranteed Approval Credit Cards
Guaranteed approval cards are not common in Canada. Essentially, if you meet a specific set of requirements, you are likely to qualify for a secured card.
These requirements typically include being a Canadian permanent resident, being of legal age in your province or territory, paying the security deposit from a Canadian bank account, not being in bankruptcy or under a consumer proposal, and having a steady source of income.
If you fulfill all of these criteria, there are guaranteed credit cards available for application in Canada.
Capital One Guaranteed Mastercard
- Annual fee: $59
- Interest rate: 21.9%
The Capital One Guaranteed Mastercard is a great way to start rebuilding your credit card. Whether or not you have to put down a security deposit will depend on your credit check. That said, this is a guaranteed approval card.
To apply, you need to be at least the age of majority where you live, haven’t applied to Capital One more than once in the last 30 days, have no Capital One accounts that have been in bad standing in the last year, and have no other Capital One accounts or pending applications.
Plastk Secured Mastercard
- Annual fee: $48
- Interest rate: 17.99%
- Perks: Zero fraud liability and instant balance payments from your bank account with an e-transfer
The Plastk Secured Credit Card is an excellent option for credit building with guaranteed approval.
While the Plastk Card does require a security deposit, it will only be utilized in the event of missed monthly payments. Otherwise, it will be refunded to you once the account is closed and the balance is paid in full. Consistently making your monthly payments will lead to an improvement in your credit score.
Additionally, you’ll earn cashback that can be applied to your card balance, with 250 points equivalent to $1, and a minimum redemption of 2,500 points.
Final Thoughts on Credit Cards for Bad Credit in Canada
Navigating the world of credit cards with bad credit in Canada may seem daunting, it’s important to remember that options do exist. Whether you opt for an unsecured, secured, or prepaid card, each offers its own set of benefits and considerations.
By understanding the differences between these types of cards and carefully assessing your financial situation, you can make an informed decision that aligns with your needs and goals. Remember to prioritize responsible credit usage, as timely payments and smart financial habits can help improve your credit score over time.
With the right approach and persistence, you can take steps towards rebuilding your credit and achieving greater financial freedom.
