Best low interest credit cards in Canada
Jacob Lund / Shutterstock
Updated: July 19, 2023
We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.
We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware this post may contain links to products from our partners. We may receive a commission for products or services you sign up for through partner links.
Let’s face it — sometimes you need or want to carry a balance on your credit card. Maybe you’re financing a big purchase and don’t have a line of credit to tap into, or perhaps you need the cash flow and simply aren’t in the position to pay off your debt right now. If this is the case, then borrowing at the lowest rate possible is the smart move. Luckily, 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 you may be tempted to use rewards cards but the math simply doesn’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.
Canada’s best low interest credit cards
† Conditions apply / *Terms and conditions apply
Best fixed rate low interest card
MBNA True Line® Gold Mastercard®
Quick Facts
Min. credit score required: Fair/Good
Min. income required: N/A
Age: You must be the age of majority in your home province.
Residency: Canadian
The MBNA True Line Gold Mastercard charges an extremely low annual interest rate of 8.99% on purchases for an annual fee of just $39. That annual interest rate is less than half that charged by traditional credit cards and so makes it the perfect card to use if you’re planning a big purchase that you don’t quite have the cash saved up for. The annual fee is more than justified if you carry a balance.
Let’s say you buy a $5,000 couch and plan to pay it off in 12 months. You’ll pay total interest of $237 plus a $39 annual fee for a total debt cost of $276. But if you put that same couch on a credit card with no annual fee at 19.99% you’ll pay $511 in interest, or 85% more, including the annual fee.
Be careful though — if you’re late on payments twice in a row within 12 months your interest rate will jump to 19.99%.
This credit card is an awesome option for those who want to purchase a big ticket item and don’t quite have the cash saved up.
Key features:
- Interest rate: 8.99% on purchases; 8.99%✪ on balance transfers; 24.99% on cash advance
- Additional perks: Buyer’s Assurance; Purchase Protection insurance; Additional nine authorized users with no additional fee; Discounts on Avis and Budget car rentals
- Annual fee: $39
Click here to apply or learn more by reading our complete MBNA True Line® Gold Mastercard® credit card review.
✪, Terms and Conditions apply.
This offer is not available for residents of Quebec.
Sponsored advertising. MBNA is a division of The Toronto-Dominion Bank (TD) and TD is not responsible for the contents of this site including any editorials or reviews that may appear on this site. For complete information on this MBNA credit card, please click on the “Apply Now” button
The Toronto-Dominion Bank is the issuer of this credit card. MBNA is a division of The Toronto-Dominion Bank. ®MBNA and other-trademarks are the property of The Toronto-Dominion Bank.
Best no annual fee low interest card
MBNA True Line® Mastercard®
Quick Facts
Recommended credit score: Fair/Good
Minimum income required: N/A
Age: You must be the age of majority in your home province
Residency: Canadian (This offer is not available for residents of Quebec)
The MBNA True Line® Mastercard® credit card is the best low interest rate card to keep in your wallet in case of emergencies. Because it charges a low annual interest rate of 12.99% plus no annual fee it functions great as a “just-in-case” card if you do have an unexpected financial challenge, like your car breaking down, a job loss, or need to book a flight out of town for a funeral. If you tend to carry a large balance or are actively planning a big purchase then it’s probably better to get the MBNA True Line® Gold Mastercard® credit card because the interest rate is lower which makes borrowing money cheaper, even including the cost of its annual fee.
However, if you’re carrying a balance on other credit cards, this card might be the better option as it offers 0%† on balance transfers in the first 12 months✪ (with a 3% transfer fee, minimum $7.50), so if you need that peace of mind while you pay off a balance, this card’s got you covered.
This card is awesome for those who can’t stomach paying annual fees or who want to carry a credit card as a fallback for a crisis.
Key features:
- Interest rate: 12.99% purchases; 12.99%✪ on balance transfers; 24.99% cash advance
- Additional perks: Apple Pay compatible; Additional 9 authorized users with no additional fee; Payment Plan feature
- Annual fee: $0
Click here to apply or learn more by reading our complete MBNA True Line® Mastercard® credit card review..
†, ✪, Terms and Conditions apply.
This offer is not available for residents of Quebec.
Sponsored advertising. MBNA is a division of The Toronto-Dominion Bank (TD) and TD is not responsible for the contents of this site including any editorials or reviews that may appear on this site. For complete information on this MBNA credit card, please click on the “Apply Now” button
The Toronto-Dominion Bank is the issuer of this credit card. MBNA is a division of The Toronto-Dominion Bank. ®MBNA and other-trademarks are the property of The Toronto-Dominion Bank.
Best card for low interest + rewards
HSBC +Rewards™ Mastercard®
Quick Facts
Recommended credit score: 630+
Min. income required: N/A
Age: You must be the age of majority in your home province
Residency: Canadian
The HSBC +Rewards™ Mastercard is a rare hybrid card that not only offers low interest rates but also earns rewards. Competitive interest rates apply across the board with 11.9% on purchases, 11.9% on balance transfers, and notably – 11.9% on cash advances.
Every $1 spent on eligible dining and entertainment purchases earns 2 Points*, and all other eligible purchases earn 1 point per $1 spent*. Points can be redeemed on travel, gift cards, and merchandise, but travel redemptions provide the greatest value and flexibility, as points are redeemed as a statement credit against any eligible travel expense, like a flight, car rental, or hotel.
This card functions as a jack of all trades and is ideal for someone who only wants to carry around a single card and isn’t interested in a bulging wallet full of different cards for different purposes.
Key features:
- Interest rate: 11.9% Purchase APR
- Welcome bonus: Get up to $200 in total value* for the first year! Conditions apply.
- Rewards rates: 2 points for every $1 spent on eligible dining and entertainment purchases*; 1 point per $1 spent on all other eligible purchases*
- Additional perks: Buyer’s Assurance; Purchase Protection insurance; Price Protection
- Annual fee: $25
Click here to apply or learn more by reading our complete HSBC +Rewards™ Mastercard® review
This offer is only available to residents of Canada other than the province of Quebec (Quebec residents eligible for separate offer).
*Terms and Conditions apply.
®/TM Mastercard and World Elite are registered trademarks, and the circles design is a trademark of Mastercard International Incorporated. Used pursuant to license.
Best low interest cash advance card
BMO Preferred Rate Mastercard®*
Quick Facts
Recommended credit score: Good
Min. income required: None
Age: You must be the age of majority in your home province
Residency: Canadian
The BMO Preferred Rate Mastercard®* offers a competitive interest rate for purchases at 13.99%. Putting a bigger purchase (like a kitchen appliance, computer, or TV) on the card may be a smart idea because of the low interest rate and because the card extends manufacturer warranties up to an additional year for new items, and protects items against accidental damage and theft.
This card is perfect for cardholders who have a rare cash flow issue and would otherwise seek out a payday loan – it’s much cheaper to get a cash advance from this card.
Key features:
- Welcome bonus: 0.99% introductory interest rate on Balance Transfers for 9 months with a 2% transfer fee* and get the $29 annual fee waived for the first year*
- Interest rate: 13.99% on purchases, 15.99% on cash advances and 15.99% on balance transfers (after the first nine months)
- Additional perks: Buyer’s Assurance; Purchase Protection
- Annual fee: $29 with first year waived*
Click here to apply for the BMO Preferred Rate Mastercard®*
*Terms and conditions apply
Best low interest balance transfer card
CIBC Select Visa* Card
Quick Facts
Recommended credit score: Fair/Good
Min. income required: $15,000†
Age: You must be the age of majority in your home province
Residency: Canadian
Similar to the MBNA True Line, the CIBC Select Visa* Card has ongoing low rates of: 13.99%† Purchase Annual Interest Rate, 13.99%† Balance Transfer Annual Interest Rate, and 13.99%† Cash Advance Annual Interest Rate, with an annual fee of $29, which is rebated in your first year†. That rate goes even lower when you get 0% interest for up to 10 months with a 1% transfer fee†. This means you can pay off your balances and purchase urgent items without having to worry about paying loads of interest on both.
The card’s promotional balance transfer offer, along with its annual fee rebate and common carrier insurance makes this a strong competitor in the low interest and balance transfer credit card market.
Key features:
- Welcome bonus: 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†
- Regular interest rate: 13.99%† Purchase Annual Interest Rate, 13.99%† Cash Advance Annual Interest Rate, and 13.99%† Balance Transfer Annual Interest Rate
- Additional perks: Common Carrier Accident Insurance
- Annual fee: $29 (rebated the first year)†
Click here to apply or learn more by reading our complete CIBC Select Visa* Card review.
† Conditions apply
Quebec Residents: Learn More about this CIBC product here
Résidents du Québec: Pour en savoir plus sur ce produit CIBC, suivez ce lien
Best low interest Visa
Scotiabank Value® Visa* Card
Quick Facts
Recommended credit score: Good
Age: You must be the age of majority in your home province or territory
Residency: Canadian citizen or permanent resident
Other requirements: No bankruptcies in the past seven years
Though most of Canada’s low interest credit cards are Mastercards, there are nonetheless a few good options for those who prefer Visa. For an annual fee of $29, the Scotiabank Value® Visa* Card offers a competitive interest rate of 12.99% on purchases, balance transfers (12.99%), and cash advances (12.99%). These universally low rates are rare, and can potentially save you a lot of money across a variety of transaction types.
The low fixed rates are also supplemented with low promotions: to boost savings for new applicants, Scotia allows cardholders to transfer a balance after being approved. Get a 0% introductory interest rate on Cash Advances, including Balance Transfers, for the first 6 months (12.99% after that; annual fee $29).¹ Plus no annual fee in the first year.¹ Offer ends October 31, 2023.
Finally, cardholders who rent vehicles at any participating AVIS location in Canada and the U.S. will receive up to 25% off on the price of their rental when they pay with their card.
Click here to apply or learn more by reading our complete Scotiabank Value® Visa* Card review.
¹ Conditions Apply. Visit here for the Scotiabank Value® Visa* Card to learn more.
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.
BMO is not responsible for maintaining the content on this site. Please click on the Apply now link for the most up to date information.
Latest Articles
Most actively traded companies on the Toronto Stock Exchange
Markets start December in the green after 'remarkable' November comes to a close
Banks focus on staff cuts, provisions for bad loans in Q4 ahead of uncertain 2024
BMO sees higher cost savings ahead thanks to Bank of the West, cuts to real estate
Cracks in job market grow as BoC succeeds at slowing economy to a near halt
