4 best low interest credit cards in Canada for 2024
Sometimes you need or have to carry a balance on your credit card. From financing a big purchase without a line of credit, or you need the cash flow and aren’t in the position to pay off your debt right now. If so, borrowing at the lowest rate possible is the smart move and there are credit cards that offer interest rates at about half those of traditional credit cards.
Low interest rate credit cards typically charge from 10-15%, compared to 20%+ for typical cards. Some offer promotional or variable rates while others offer a fixed rate.
If you do tend to carry a balance, rewards cards don't add up — you’ll be spending close to 20% a year in interest to receive, maybe, 2% in rewards. Even if you carry the balance for two statement periods, it will cost you over 3.5% in compounded interest. This is why low interest cards are a better option.
We’ve compared all the low interest credit cards in Canada to find the one that’s easiest on your wallet.
Best low interest credit card with no annual fee:
MBNA True Line® Mastercard® credit card
0% New cardholders can enjoy a 0% promotional annual interest rate† (a 3% transfer fee applies) for 12 months on any balance transfer✪ completed within 90 days of opening the account
$0 Annual Fee
12.99% Purchase APR
24.99% Cash Advance APR
12.99% Balance Transfer Rate
Good Recommended Credit Score
Welcome Offer Ends Dec 31, 2024
Get a 0% promotional annual interest rate (“AIR”)† for 12 months on balance transfers✪ completed within 90 days of account opening.
Learn moreLowest interest credit card with an annual fee:
MBNA True Line® Gold Mastercard® credit card
8.99 8.99% interest rate on purchases and 8.99%✪ on balance transfers
$39 Annual Fee
8.99% Purchase APR
24.99% Cash Advance APR
8.99% Balance Transfer Rate
Good Recommended Credit Score
Best low interest balance transfer credit card:
CIBC Select Visa* Card
0% Pay 0% interest for up to 10 months with a 1% transfer fee.†
$29 Annual Fee First year annual fee rebate. $0 for up to 3 additional cards.†
13.99% Purchase APR
13.99% Cash Advance APR
13.99% Balance Transfer Rate Promotional offer: 0% interest for up to 10 months with a 1% transfer fee†
1.00% Balance Transfer Fee 1% transfer fee†
Good Recommended Credit Score
$15,000 Required Annual Household Income
Welcome Offer
Transfer your credit card balance - Get 0% interest for up to 10 months with a 1% transfer fee† and a first year annual fee rebate†
Learn moreBest low interest cash advance credit card:
BMO Preferred Rate MasterCard®*
0.99% 0.99% introductory interest rate on balance transfers for 9 months with a 2% transfer fee and a first year annual fee waiver
$29 Annual Fee Waived with balance transfer offer or BMO Performance chequing account
13.99% Purchase APR
15.99% Cash Advance APR
0.99% Balance Transfer Rate 0.99% introductory interest rate on balance transfers for 9 months with a 2% transfer fee and waive the first year annual fee
2.00% Balance Transfer Fee
Good Recommended Credit Score
$0 Required Annual Personal Income
$0 Required Annual Household Income
Welcome Offer
Get a 0.99% introductory interest rate on Balance Transfers for 9 months with a 2% transfer fee5 and BMO will waive the $29 annual fee for the first year.*
Learn moreBest Scotiabank low interest credit card:
Scotiabank Value® Visa* Card
$29 Annual Fee $0.00 each Supplementary Card
12.99% Purchase APR
12.99% Cash Advance APR
12.99% Balance Transfer Rate
2.50% Foreign Transaction Fee
Fair Recommended Credit Score
$0 Required Annual Personal Income
$0 Required Annual Household Income
Welcome Offer Ends Oct 31, 2024
0% introductory interest rate on balance transfers for the first 10 months (12.99% after that; annual fee $29), plus no annual fee for the first year.¹
Learn more
Honourable mentions for low interest credit cards in Canada
There are many credit cards with low interest in Canada, but not all of them can be considered best in class. Money.ca has chosen the top credit cards for low interest above, but below we give you more options.
For instance, maybe you bank with TD or RBC and are loyal to them but want to know your options. Some people might disregard Amex, known for their premium credit cards, despite still having a good option (with insurance, too).
RBC low rate credit card:
RBC Visa Classic Low Rate Option
$20 Annual Fee
12.99% Purchase APR
12.99% Cash Advance APR
12.99% Balance Transfer Rate
3.50% Balance Transfer Fee $5.00 fee for cash advances outside of Canada
Fair Recommended Credit Score
Welcome Offer
No annual fee for the first year and get a 0.99% introductory interest rate for the first 10 months on balance transfers and cash advances
Learn moreAmerican Express Canada low interest credit card:
American Express EssentialTM Credit Card
$25 Annual Fee
12.99% Purchase APR
12.99% Cash Advance APR
12.99% Balance Transfer Rate
Fair Recommended Credit Score
$0 Required Annual Personal Income
Best low interest credit cards in Canada
| Low interest rate credit cards in Canada | Details | Apply now |
|---|---|---|
 |
Interest rate: 12.99%
Annual fee: $0 |
Apply now |
 |
Interest rate: 8.99%
Annual fee: $39 |
Apply now |
 |
Interest rate: $29 (Waived the first year)*
Annual fee: 13.99% |
Apply now |
 |
Interest rate: 13.99%† (13.99%† Cash Advance Annual Interest Rate and 13.99%† Balance Transfer Annual Interest Rate)
Annual fee: $29 (First Year Annual Rebate)† |
Apply now |
 |
Interest rate: 12.99%
Annual fee: $29 |
Apply now |
How we compared and chose the cards
We compared and chose each credit card based on a holistic assessment of the value of each card. Obviously, the card had to have a low interest rate. But that wasn’t the only thing we considered. We also took into account interest rates on cash advances, balance transfers, the annual fee as well as any perks to get a bigger picture of the total potential costs and benefits. For example, a slightly higher annual fee may be worth it if the card also offers discounts or insurance.
How to choose the best low-interest card
When comparing one low interest credit card to the next, make sure to consider your individual spending habits and what’s most relevant to your lifestyle. If your primary goal is to pay off debt faster or keep a card in case of an emergency, then perhaps looking simply for the lowest interest rate possible is right for you. But let’s say you often depend on cash advances — then you’re going to want to look for a card that not only has a low rate for purchases but also for when you need to grab bills out of the ATM. Similarly, if you plan on making some big-ticket purchases then you might want a card that offers additional benefits like extended warranties and purchase assurances. By examining your priorities you’ll be able to find the right low interest card for you.
Read reviews
One of the best things you can do before signing up for a credit card is read reviews to know what you’re getting into. Here at Money.ca we’ve done the hard work of looking up and comparing all the best credit cards on the Canadian market to help you choose the one that is right for you.
Check eligibility
Not everyone is eligible for every credit card or credit card offer. It really depends on your financial history or what other banking products you have. Read the fine print to make sure you meet the income and credit score requirements before signing up for a card. And make sure the card has the specific benefit you’re looking for. If you’re getting a card for a specific reason, such as balance transfers, then make sure to double-check that that card actually offers balance transfers.
Interest rate on purchases, cash advances and balance transfers
While some cards offer the same rate across the board most have different interest rates for purchases, cash advances and balance transfers. Knowing what you’ll mostly be using the credit card for will help you choose which card is right for you. You wouldn’t want to expect 9% and then get hit with sticker shock when they charge you 25% for a cash advance!
Annual fee
Paying an annual fee for a low-interest credit card can feel counterintuitive, but if the rate is low enough and the perks are good enough it can be more than worth it. Often, cards with annual fees will offer lower interest rates than those without, so if you’re going to carry a balance the fee might still let you come out ahead financially. Additionally, if the card offers other benefits that will save you money, like travel insurance or discounts on car rentals, it might more than pay for itself.
Rewards and perks
Clearly, the main advantage of a low interest rate credit card is, well — its low interest rate. But that doesn’t mean that’s the only thing it delivers. Some cards will also give you rewards points that you can redeem for travel, merchandise, and more. Other credit cards provide insurance and extended warranties. Make sure to read up on all the benefits of a low interest credit card, and choose the one that offers the perks most suitable for your lifestyle.
What to watch for with low interest credit cards
Something to watch for is for cards that claim to be low interest but are, in reality, variable rates of prime plus. The problem is that A. the prime rate can change several times a year, and B. the “plus” can also vary depending on your eligibility. You don’t know if you’re going to get a rate of 7.69% or 15.45% before you apply. Even if you’re unhappy with the rate you get, if you were approved, you may still have to pay the annual fee.
Another thing to watch for are the new personal loans available on the marketplace. These are not the same as a low interest credit card. They may advertise rates as low as 5.9% but in reality they average in the 12% range. Furthermore, they require you to send in proof of income and identity verification. Perhaps it’s better than going into the branch to apply for a line of credit, but it’s certainly not easier than applying for a credit card online.
Why use a credit line or a personal loan to pay off credit card debt, when you can access ultra low rates with a credit card? It just doesn’t make sense. We continue to recommend balance transfers as the optimal strategy to pay off high interest credit cards, store cards or fixed payment loans you may have. Few, if any, other products offer interest rates as low.
How does credit card interest work?
Your credit card’s annual percentage rate, or APR, is communicated as an annual charge but is calculated daily and charged monthly. If you want to know how much interest you will accrue each day you can multiply your balance by the APR and divide it by 365.
If you have a $2,000 balance on a low rate credit card charging you 12.99% APR, for example, you would calculate $2,000 times 0.1299 APR divided by 365 days equals $0.71 per day in interest charges. To calculate the monthly cost you would simply multiply the daily interest charge by the number of days in a month. For example $0.71 times 30 days is $21.35 monthly interest. Even if your balance stays constant, your monthly interest may fluctuate slightly because the number of days in each month range from 28 to 31.
With a brand new credit card, or one without any charges because you’ve paid off the balance in full, you typically get a grace period of 21 days before interest starts to accrue on purchases. If you’re carrying a balance on your credit card, however, new purchases will begin accruing interest the day you make them.
It’s not unusual for credit cards to charge a different APR for cash advances or balance transfers. Furthermore, both of these charges tend to have no grace period, so your balance will begin accruing interest right away.
How low interest credit cards save you money
It’s easy for personal finance experts to say that you should never carry a balance on your credit card, but hey, real life happens. We can’t prepare for everything. You may be just starting out in the workforce and too young to have saved a significant emergency fund. Or perhaps it was depleted by a recent disaster. Something unexpected, like a glass of wine spilling on your computer, a car that breaks down or even the siren call of a week at an all-inclusive vacation in the Dominican Republic that forces your hand.
It’s also possible you made spending mistakes in the past and are now carrying a large balance on high-interest credit cards.
No matter the reason, a low interest credit card can save you money when borrowing and help you get out of debt faster since more of your payment will be going toward the principal instead of the interest.
Let’s say you owe $4,000 on a credit card currently charging you 19.99%. You’re diligently paying $300 per month towards your balance. Here’s the difference it would make to transfer that balance to a low-interest card with an interest rate of 12.99%:
Bottom line
Low interest rate credit cards are awesome for financing a big purchase, debt consolidation or to keep on hand for emergencies. Paying the annual fee is most likely worth it if you carry a balance from month-to-month. But if you’re planning to use the card frequently for something other than new purchases then make sure to review the applicable rates for cash advances and balance transfers as they may differ. To choose the best card don’t forget to take into account the perks and rewards. Either way, a low interest credit card is one of the cheapest ways to borrow money without putting down collateral. And if you carry a balance it’s going to put a lot more money in your pocket than any reward or cash-back card.
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