Best Credit Cards

The Best Credit Cards In Canada For December 2020

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Last updated on November 24, 2020

Presenting the best credit cards in Canada for December 2020. From the largest sign up offers to the best perks and highest rewards for spending in every category, compare our cards below to find the perfect match for you.

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Best overall travel credit card

American Express® Gold Rewards Card

American Express Gold Rewards Card

Apply Now

on American Express' website

Welcome Offer: 25,000 Points when you charge $1,500 in purchases to your Card in your first 3 months of Card membership

Earn Rate: 2x points for travel, groceries, gas stations, and drugstores. 1x point on everything else.

Annual Fees: $150

Min. Income Required: $0

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The Amex Gold Rewards Card is one of the most flexible cards when it comes to earning and redeeming points, especially when it comes to travel. If you spend in a lot of different categories and don’t have a strict preference for what kind of rewards you want to earn, this is the card for you. You can redeem your points for travel, merchandise, or you can pay for things. It comes with 25,000 membership rewards, and you’ll earn 2 points for gas, grocery, drugstore, and all travel purchases.

Best overall cash back cards

SimplyCash™ Preferred Card from American Express

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on American Express' website

Welcome Offer: 10% cashback in your first 4 months (up to $400).

Earn Rate: Flat rate of 2% back on purchases when your welcome period ends.

Annual Fee: $99

Min. Income Required: $0

If you want an all-around cash back card that gives you a high earn rate on all categories of purchases, the SimplyCash Preferred Card from American Express offers the best flat rate. You get 2% cash back on all purchases made. This is also one of the easier cards to be accepted for, as they have no minimum income requirements to apply.

Best overall rewards credit card

American Express Cobalt™ Card

american-express-cobalt-cardcard

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on American Express' website

Welcome Offer: Earn up to 30,000 Points in your first year. (2,500 Membership Rewards® points for each monthly billing period in which you spend $500 in purchases on your Card.)

Earn Rate: 5x rewards on dining, coffee shops, grocery stores. 2x rewards on travel, lodging, transit. 1x point for everything else.

Annual Fees: $10/month

Min. Income Required: $0

Read review

The Amex Cobalt card is the perfect rewards card for everyday spending. It has one of the highest earn rates on the market for food/drink, grocery, coffeshops, bars, and restaurant spending at 5x points per $1 spent. You’ll also get 2x points on travel, hotel, gas, public transit, and even ride sharing services. With 30,000 rewards points as a welcome bonus, and additional entertainment perks like special invites to Amex events, the Cobalt card makes it the best everyday spending rewards card.

Best premium rewards credit card

The Platinum Card® by American Express®

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on American Express' website

Welcome Offer: 25,000 Points (after spending $2,000 in purchases in the first three months) + $200 annual travel credits

Earn Rate: 2x points for travel, 3x for dining, and 1x for everything else.

Annual Fees: $699

Min. Income Required: $0

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For those looking for the best of the best in rewards credit cards, the Amex Platinum card is your best option. It has a steeper annual fee at $699/year, but it also comes with bonuses, earn rates, and perks unlike any other rewards card. You get 25,000 rewards points as a welcome bonus, $200 every year in travel credits, private lounge access across the globe, and many other travel perks like hotel loyal benefits, late checkout, free breakfasts, etc.

Best cash back offer with no fees

BMO CashBack® MasterCard®*

bmo cashback mastercard

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on BMO's website

Welcome Offer: 5% cash back in your first 3 months + 1.99% introductory interest rate on Balance Transfers for 9 months with a 1% transfer fee.

Earn Rate: Get 1% cash back on all purchases.

Annual Fee: $0

Min. Income Required: $0

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The BMO CashBack® MasterCard®* is one of the best no-fee credit cards on the market. Despite having no annual fees, new members still get an attractive welcome bonus of 5% cash back in the first 3 months. You’ll also get 1.99% rate on balance transfers for 9 months.

Best lifestyle card

BMO eclipse Visa Infinite*

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on BMO's website

Welcome Offer: Get up to 40,000 points and the $120 annual fee waived in the first year.

Earn Rate: Earn 5x the BMO Rewards points on groceries, dining, gas and transit. Get 1 BMO Reward for every $1 spent on everything else.

Perks: Get a $50 annual lifestyle credit to spend however you want. Mobile Device Insurance that covers you for up to $1,000. Pay with Points by browsing your recent transactions & redeem your points for as little as $1.

Annual Fee: $120

Min. Income Required $60,000 personal or $100,000 household

One of the most unique cards on the market today, the BMO eclipse Visa Infinite* offers up to 40,000 points as a welcome offer, and the first annual fee is waived. Earn 5x the BMO Rewards points on groceries, dining, gas and transit. Get 1 BMO Reward for every $1 spent on everything else. The most unique part of this card is the perks: Get a $50 annual lifestyle credit to spend however you want (renews each year you’re a cardmember). You’ll also get Mobile Device Insurance that covers you for up to $1,000 in case you drop or break your phone.

Best for Air Miles

BMO AIR MILES®† World Elite®* MasterCard®*

BMO® AIR MILES®† World Elite® Mastercard®

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on BMO's website

Welcome Offer: 2,000 AIR MILES Bonus Miles + First Year Fee Waived (offer valid until Oct 31, 2020).

Earn Rate: 1 Mile for every $10 in credit card purchases. Earn twice on purchases at AIR MILES partners.

Annual Fee: $120

Min. Income Required $80,000 personal or $150,000 household

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If you collect Air Miles, the BMO AIR MILES®† World Elite®* MasterCard®* will give you the best welcome bonus miles (2000 AIR MILES), along with the highest earn rate on the market (1 Mile for ever $10 in purchases). With VIP airport lounge access, car rental discounts, and $2 million in travel insurance coverage, it’s the perfect card to enjoy luxury travel perks and collect miles at the same time. The card comes with special offers from digital subscription services, and you’ll also get access to over 1 million Wi-Fi hotspots around the world – all at no added cost, and no added fees or roaming charges

Best Aeroplan credit card

American Express® Aeroplan® Reserve Card

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on American Express' website

Welcome Offer: Earn up to 35,000 Aeroplan points and a $100 Statement Credit (after spending $3,000 in purchases within the first three months of Cardmembership) + earn 5,000 Aeroplan points for each monthly billing period in which you spend $1,000 in purchases on your Card for the first six months of Cardmembership.

Earn Rate: Earn 3x the points on eligible purchases made directly with Air Canada and Air Canada Vacations. Earn 2x the points on eligible Dining and Food Delivery purchases in Canada. Earn 1x the points on everything else.

Annual Fee: $599

The American Express® Aeroplan® Reserve Card is a premium credit card with a steeper annual fee of $599, however the rewards and earn rates are incredible. You’ll earn up to 65,000 Aeroplan points and a $100 statement credit. Get the first 35,000 Aeroplan points and your statement credit when you spend $3000 in the first three months of membership. You’ll then earn 5000 Aeroplan points for each monthly billing period in which you spend $1,000 in purchases on your Card for the first six months of Cardmembership.

Best credit card for no foreign transaction fees

Scotiabank Passport Visa Infinite

scotiabank passport visa infinite

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on Scotia Bank’s website

Welcome Offer: 30,000 Scotia Rewards points + Complimentary Priority Pass membership, plus 6 free visits per year.

Earn Rate: 2 Scotia Rewards points for $1 spent on eligible grocery, dining, entertainment, and daily transit. 1 point for all other purchases. No FX Fees.

Annual Fee: $139

Min. Income Required: Personal $60,000 or Household $100,000.

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The Scotiabank Passport Visa Infinite offers a wide variety of perks and bonuses for cardmembers, including no foreign transaction fees. It comes with 30,000 Scotia Rewards points as a welcome bonus, which is equal to around $300 in travel bookings. It also comes with 6 free airport lounge visits and Priority Pass membership, which is equal to $379 in value. With an earn rate of 2 points for grocery, dining, entertainment, and transit, your points can stack up fast on everyday purchases.

Best credit card for groceries and food

American Express Cobalt™ Card

american-express-cobalt-cardcard

Apply Now

on American Express' website

Welcome Offer: Earn up to 30,000 Points in your first year. (2,500 Membership Rewards® points for each monthly billing period in which you spend $500 in purchases on your Card.)

Earn Rate: 5x rewards on dining, coffee shops, grocery stores. 2x rewards on travel, lodging, transit. 1x point for everything else.

Annual Fees: $10/month

Min. Income Required: $0

Read review

The Cobalt card is the winner again in this category as well. They offer 5x rewards points on grocery stores, food, and dining out (this includes going to bars, and for food delivery apps like Uber Eats, Door Dash, etc.). Redeeming your points is extremely flexible and you can use your points for travel purchases, paying bills, or redeeming for merchandise. You’ll also get 30,000 rewards points as a welcome bonus, which is enough for $300 in statement credits to use toward travel purchases, and also enough for $225 worth of Amex Prepaid Cards.

Best low-interest credit card

BMO Preferred Rate MasterCard®*

bmo preferred rate mastercard

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on BMO's website

Welcome Offer: 3.99% introductory interest rate on Balance Transfers for 9 months with a 1% transfer fee.

Interest Rate: Purchases: 12.99%, Balance transfers and access cheques: 12.99%, Cash advances: 12.99%

Annual Fee: $20

Min. Income Required Personal $15,000

New cardholders of the BMO Preferred Rate MasterCard®* will enjoy a 3.99% interest rate on balance trasnfers for 9 months, and only a 1% transfer fee. Your first year’s annual fee will also be waived.

Best balance transfer credit card for Air Miles

BMO AIR MILES®† MasterCard®*

bmo air miles mastercard

Apply Now

on BMO's website

Welcome Offer: Get 950 AIR MILES Bonus Miles!* That’s enough for $100 towards purchases with AIR MILES Cash.

Earn Rate: Get 5x the Miles at Shell until December 31, 2020. Get 3x the Miles for every $25 spent at participating AIR MILES Partners. Get 1 Mile for every $25 spent everywhere else.

Annual Fee: $0

Min. Income Required: $0

Read review

The BMO AIR MILES®† MasterCard®* comes with no annual fee, a balance transfer rate of 1.99% for 9 full months, and you also get 800 Air Miles when you sign up. If you’re an Air Miles member looking for a balance transfer card with no fees, this is the card for you.

Best student credit card

Tangerine Money-Back Credit Card

tangerine credit card

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on Tangerine's website

Welcome Offer: choose up to 3 categories and receive a 4% cash back on those for the first 3 months.

Earn Rate: 2% cash back on your selected categories, and 0.5% on everything else.

Annual Fee: $0

Min. Income Required: Personal $15,000

The Tangerine Money-Back Credit Card is one of the most popular cash back cards because you’re able to get a high cash back rate of 2% on selected categories, and it has no annual fees. The way the card works is unique in that you’re able to choose up to 3 categories (for instance, gas, groceries, bills) on what you want to receive 2% cash back on. For everything else, you’ll get 0.5%.

Best credit card for movie lovers

Scotiabank Scene Visa Card

scotia scene visa

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on Scotiabank’s website

Welcome Offer: 2,500 bonus SCENE points with your first $500 in everyday purchases in first 3 months.

Earn Rate: Earn 1 SCENE point for every $1 spent on everyday purchases. 5 SCENE points for every $1 spent at Cineplex theatres or at cineplex website. Redeem for a FREE movie with just 1,250 points.

Annual Fee: $0

Min. Income Required: $0

For movie lovers, the Scotiabank Scene Visa Card is the ideal credit card. There’s no annual fee, and you’ll get 2,500 SCENE points as a welcome bonus. You’ll earn 1 SCENE point for every dollar you spend with the card, and 5 SCENE points if you spent at Cineplex. A free movie can be redeemed for just 1,250 points.

Best business credit card

American Express® Business Gold Rewards Card

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on American Express' website

Welcome Offer: 30,000 points when you charge $5,000 in purchases to your Card in your first three months of Cardmembership.

Earn Rate: 1 point for every $1 spent on your card.

Annual Fee: $250 (may be tax deductible)

Min. Income Required: $0

The American Express Business Gold Rewards Card is the best business credit card in Canada with a points earning rate, large welcome offer, and flexible points redemption options. You’ll get 30,000 points as a welcome bonus, and earn 1 point for every $1 in spending. You’ll also get 55 interest-free days to pay to maximize your cash flow.

Best business card for hotel rewards

Marriott Bonvoy™ Business American Express® Card

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on American Express' website

Welcome Offer: 50,000 Marriott Bonvoy points, enough for 3 free nights at a Category 2 hotel. Plus receive an Annual Free Night Award automatically each year after your anniversary

Earn Rate: Earn 3 points for every $1 in Card purchases on eligible gas, dining and travel. Earn 5 points for every $1 in Card purchases at participating Marriott Bonvoy properties. Earn 2 points for every $1 on all other purchases charged to the Card.

Annual Fee: $150

Min. Income Required: $0

If you’re a business owner who frequently stays at hotels, the Marriott Bonvoy Amex Card should be high on your list of potential cards. You get 50,000 points as a welcome bonus, and a free night’s stay at Marriot Bonvoy properties for every year that you’re a cardholder. You can redeem your points for free hotel stays at over 6,700 hotels and resorts in 130 countries at 29 different hotel brands.

Best business credit card for gas, office supplies, bill payments

BMO Rewards® Business Mastercard®*

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on BMO's website

Welcome Offer: Get 50,000 points after you spend $5,000 in the first 3 months

Earn Rate: 3 BMO Rewards Points for every $1 you spend on gas, office supplies and cell phone/internet bill payments. 1.5 points on everything else.

Annual Fee: $120

Requirements: Be an owner of a for-profit business that operates in Canada. No bankruptcy in the last 7 years. Be the age of majority in your Province or Territory.

For your business’ gas, office supplies, and cell phone and internet bill payments, you should use the BMO Rewards® Business Mastercard®*. You’ll get 3 BMO Rewards Points for these categories. New cardholders will get 50,000 points as a welcome bonus.

Best secured card with guaranteed approval

Refresh Secured Card

refresh financial secured card

Apply Now

on Refresh's website

Credit Limit: $200 - $10,000

Annual Fee: $12.95 + $3/month maintenance fee

Interest Rate: 17.99%

Min. Income Required: $0

For people looking to fix their credit with a secured card, the Refresh Secured Card is one of the most versatile options on the market. It comes with a lower interest rate than most cards, and a very high maximum credit limit option of $10,000. They report to all major credit bureaus in Canada, and comes with guaranteed approval with no credit checks required.

*This card is owned and issued by DirectCash Bank pursuant to license by Visa International. The Visa Brand is a registered trademark of Visa International.


View More Top Cards In Your Preferred Category


How To Choose The Best Credit Card For You

Maybe you just got your first credit card or are currently on the search to get your first one. whichever the case, getting educated about the in-and-outs of credit cards, how they work, and all the industry jargon that comes with it, is one of the most financially prudent decisions you can make for your future.

The right credit card can help you pay for major purchases while building your credit history — a constituent that reflects your ability to manage your finances, and shows insurers whether or not they can trust you with a loan for your car, house, tuition, etc.

How Does a Credit Card Work?

Let’s start with the basics. A credit card gives you a line of credit. Think of it as a short-term loan from your credit card issuer that you can use to make purchases. At the end of the month, the issuer sends you a bill for the amount you borrowed. This is different than a debit card in which you use the funds saved in your checking account to make the purchase.

Your line of credit, or credit limit, can be a few hundred to tens of thousands of dollars, depending on which credit card you get and how good your credit history is. With a credit card, you get your use your bank’s money, that you otherwise don’t have, to make purchases with the promise that you will pay them back.

If you successfully pay off the amount you owe the bank on time every month, then there’s nothing to worry about. But if you are unable to pay the balance in full, or if you can only make the minimum amount due – lowest amount payable to avoid a late payment fee – then you will be charged the interest rate on the amount you borrowed. Each month that you carry a balance, you will be charged interest. Making payment consistently on time can significantly boost your credit score and shield you from ending up with massive credit debt.

Anatomy of a Credit Card: Glossary

There are a few important credit card related terms you will hear time and time again. It’s important to familiarize yourself with the following:

Annual Fee: Refers to a yearly fee charged to you by your credit card issuer for using their credit card and all the benefits it carries.

Credit Score: Refers to a three digit number that represents the risk the lender is taking by letting you borrow money. It shows how likely you are to repay the debt. Lenders use this number to decide whether or not they’ll approve you for a loan. The higher your credit score, the lower the risk you are to the lender. On a scale of 300-850, 300-629 is considered poor, 630-689 is considered to be fair, 690-719 is considered good, and 720-850 is determined to be an excellent credit score.

Credit Report: A report by credit bureau that shows your credit activity and how you manage your finances.

Credit History: Your ability to repay debt on time.

Signup Bonus: An incentive provided to you by your credit card issuer for signing up and performing a task such as spending a certain amount within a specific time-frame.

Purchase Interest Rate: Refers to the interest rate applied to the purchases you made in the event you fail to pay the full balance by the due date.

Cash Advance: A service provided by your bank that allows you to withdraw cash through an ATM or the bank against your credit limit. The interest rate charged on these are higher and the issuer will also charge you a cash advance fee per transaction.

Balance Transfer: Process of moving debt or balance from one credit card to another.

APR: Annual Rate Percentage refers to the annual interest rate that a lender charges you for borrowing money.

Variable Rate Interest: An interest rate that is subjected to change periodically.

Types of Credit Cards in Canada

There are different types of credit cards to meet the diverse needs of Canadian consumers.

Cash-back

Cash-back cards are a type of rewards credit card that refunds you a percentage of the amount you spent shopping. These can be redeemed as a check, statement credit to reduce the amount you owe the bank, or as a deposit into your savings account. The cash back percentage can range from 1%- 6%.

There are 3 types of cash-back credit cards: Flat-rate cards that pay the same cashback percentage across all categories, tiered cards that pay a higher bonus on certain categories, and rotating-bonus category in which the categories that earn more cashback than others changes periodically.

General travel credit cards

A travel credit card rewards you with points or miles (like Air Miles or Aeroplan Miles) for every dollar spent through your credit card. General travel credit card rewards can be redeemed on flights, hotels, or any travel related expenses. They also often have no foreign transaction fee which can bring large savings for Canadians who frequently travel internationally.

Airline credit cards

These credit cards are tied to specific airlines, and the reward points you earn in this type of card can be redeemed for airfare, upgrades on that airline. The perks associated with airline credit cards, such as free checked bags, priority boarding, use usually linked to the same brand.

Hotel credit cards

If you want free nights and room upgrades, and tend to stick with one hotel chain when travelling, then hotel credit cards are perfect for you. These credit cards carry the name of a hotel and offers points and perks redeemable at that hotel.

Balance transfer credit cards

Balance transfer credit cards are for people carrying multiple balances on several credit cards with a high-interest rate. This card helps you consolidate all that debt, and since it comes with as low as 0% interest rate for a few months to a year, you can make a significant reduction to your debt without wasting money away paying interest.

Low-interest credit cards

If you carry a balance month-to-month, you are charged an interest which increases the amount you owe the bank. A low-interest credit card comes with a smaller interest rate which can help you save money and tackle debt faster.

Student credit cards

Student credit cards are specifically designed for students, since as a demographic, they often have little-to-no credit history and are unable to meet a high-income requirement.

Business credit cards

Business credit cards are perfect for mid to small business owners who have multiple employees making purchases for their business. Businesses can typically find it difficult to get approved for a regular credit card. These credit cards come with a huge line of credit, generous welcome bonuses and extensive benefits package.

Secured credit cards

Secured cards are well-suited for those with bad credit or no credit looking to rebuild their credit score, or are starting from scratch. They require you to place a security deposit which also establishes your credit limit for that card. For example, if you put $500 as security deposit, you will have a line of credit for $500. They credit cards have very low eligibility requirements.

How to Pick the Perfect Credit Card

With so many options available, it can be difficult to zero-in on the right card for your wallet.

Since the majority of people stick with the same card their whole life, before saying yes to any one card, consider the following points.

Know your goals
It’s important to start your quest to finding your perfect credit card match by identifying your goals. Why do you want a credit card? Is it for general spending, collecting rewards, building credit, or for purposes like debt consolidation or repairing damaged credit. Since there are several types of credit cards available, recognizing your goals will help you narrow your options significantly.

Check your credit report
Except for Canadians who have never borrowed money before, everyone has a credit score. It’s extremely crucial to regularly check your credit score because it’s an important factor that decides which credit card you will qualify for. You can request a free copy of your credit report through two national credit bureaus in Canada-Equifax Canada and Trans Union Canada. It’s important to check your credit score with both bureaus. Do you know that as a Canadian, you are entitled to receive one free credit report per year? You can receive your report either online, in person or by mail.

Do you carry a balance?
Consider whether or not you will be able to afford paying the balance during the months you use your credit card. If you don’t think you will be able to pay the full balance in a timely manner, it would be for the best to go with the credit card that comes with a low interest-rate. This way, during the months where you are only able to make the minimum payment due, you’re not slapped with a high-interest penalty.

Is tackling debt your top priority?
Most credit cards have different interest rates. But if you are struggling to pay off multiple balances, the more time you wait, the higher the amount you will owe the credit card companies because of excessive interest. Consolidating all your debt to one credit card with very low balance transfer and purchase interest rate will help you conquer your debt quickly. For this purpose, you are better off getting a balance transfer card.

Have a poor credit history?
If you have a credit score less than 630, it’s best to apply for secured cards that require you to put down a refundable security deposit. But know that there are some unsecured credit cards that will accept people with bad credit, but they typically have a higher annual or interest fee. This can add to your existing debt or make it so that you are unable to make your payments on time which can negatively impact your credit score.

Analyze your spending habits
Examine your shopping habits and identify the major categories that dominate your expenses. Once you know where you are spending the most money, you can pick a card that brings the most rewards for that specific category. For example, if you spend the most on groceries then go with a card that gives you the maximum points or cashback in supermarkets. It is extremely important that you pick a card that suits your lifestyle, and provides bonus rewards for the category that sees the most expense from you.

Analyze the rewards
Some credit cards reward you with cash, while other credit cards reward you with points or miles that you can use while purchasing products in certain categories. Make sure that the credit card you pick offers you rewards that you will actually use. If you have a big road trip coming up, then a card that rewards you the most on gas or travel purchases would bring you more value than a credit card offering the most cash back for home-improvement.

Look at the eligibility requirements
Premium to elite credit cards that offer the most attractive rewards, perks and benefits come with a steep annual fee They also have very income and credit score requirements to be eligible. When researching credit cards, apply for one that has a good overall value and also is easy to apply. Credit card issuers are known to decline applicants with high income an excellent credit, so keep your options open.

Comparing Credit Cards

On the surface level, all credit cards function the same way– you buy things with the bank’s money and then you pay them back by due date. But there are subtleties that exist that makes each of these cards unique, and these same differences can either make the credit card a heaven to use, or a pain to deal with. There are a few fundamental pillars you need to evaluate to determine the quality of the credit card you want to sign up for.

Fees
Credit cards come with multiple fees – some may be worth it, while others are best to be avoided.

The most common fees are:

  • Annual fee – Credit cards that come with an annual fee usually has bigger sign-up bonuses and larger benefits. There are also cards that come with no-annual fee. These have lower rewards and higher interest rates. An annual fee isn’t always bad if the perks are relevant to you, rewards are nice and if you will be using the card a lot. That said, if the card you want has a huge annual fee, see to it that it has enough value to justify the high fees.
  • Foreign transaction fee – This is a fee that’s charged when you make a purchase abroad. It’s usually between 3-4%. If you are someone who frequently travels outside Canada then opt for a card that skips this fee.
  • Cash advance and balance transfer fee – These are fees are what a credit card issuer charges their customers for every eligible cash advance or balance transfer request.
  • Late payment fee – A penalty that’s added to a customer’s balance when they fail to make the minimum payment by the due date.

While the fees above are commonly found in all credit cards, other than the annual fee, almost all of them can and should be avoided.

Introductory rate
Many credit cards offer a low interest rate on purchases, balance transfers and cash advances for the first few months to a year. These rates can go as low as 0%, and presents the prime window of time to reduce your debt as much as you can, without losing money paying high interest rate.

Ongoing Interest
0% interest is great as an introductory perk, but it’s even better if the ongoing APR once the promotional period ends still stays relatively low. This should be an important factor to keep in mind if paying off your balance will take some time.

Welcome Bonus
A generous sign-up bonus quickly gives you a flood of rewards right after you sign-up and meet a few requirements. If getting rewards is your primary motive for getting a credit card then welcome bonus can be a very valuable asset. Travel credit cards generally offers the most lucrative bonus. But remember that, these do have a spending requirement you must meet inorder to claim your bonus. Typically, the bigger the reward, the higher the spending requirement.

Rewards
There are two elements you should note when looking at rewards– earn rate- the cashback percentage, points or miles you get for every $1 spent; and redemption value- the value received for each point or mile you redeem. Also note whether or not the redemption options contains enough flexibility to bring the most value for your lifestyle.

Perks
Premium credit cards tend to come with more perks than basic cards, but they also have steep annual fees which can go above $400. There are some standard perks that all good credit cards have. These include purchase protection, extended warranty insurance, rental car coverage, free VIP lounge access, and more. Make sure that the credit card you decide on is loaded with perks that you will actually use and need.

How to apply for a credit card

Applying for a credit card is easy, provided you have decided on which one you want. Keep in mind that the credit card issuer doesn’t know you, but will look at your credit history, employment and other financial assets and accounts to assess your risk to them.

Here are the steps you need to take to apply for your chosen credit card:

1. Check your credit report – Your credit score is important in determining which credit card you will qualify for. It takes into account your overall debt, the ratio of your credit card balance to your credit limit (known as credit utilization), your current loan balance in relation to what you originally owed.

2. Check the eligibility requirements – Eligibility requirements generally vary between credit cards. The mid to top tier cards require good to excellent credit scores and a high personal or household income requirement. If you have bad or no credit, you won’t qualify for a rewards card right away. You may want to start with a secured credit card, or one with a low interest rate, so that you can focus on (re)building your credit, and upgrade to a better card later down the road.

3. Fill out an application – You can either fill out an application online, or in some cases, like when it comes to applying for secured cards from major Canadian banks, you will have to visit one of their branches in person. While applying, you will be required to provide basic information like your name, address, employment status, annual income and more. Do not apply for multiple cards close together or at the same time because when your credit issuer goes to perform a hard check on your background, they’ll know.

4. Once approved, wait – If your credit card application gets approved, wait for your card to come in the mail. You should receive it within 10 business days.

5. Activate your card – You can activate your credit card by calling a number present on the sticker on your new card, or online through the credit card issuer’s website.

How Many Credit Cards Should You Have?

It depends on your needs. While one credit card will be sufficient for some, others will be able to earn the maximum rewards by carrying multiple credit cards. That said, carrying multiple cards comes with a lot of added responsibility. For example, you will have to ensure that your monthly balances are paid across all your accounts.

Carrying multiple cards do have its benefits. Like, where one credit card might offer you the best rewards on groceries, another credit card may help you get closer to your next trip by giving you amazing miles you can redeem for huge savings on your next flight. Through combining, you can easily earn huge incentives across multiple spending categories.

There is also the principle of credit utilization to consider. This denotes how much of your available credit limit you are using on your card (per-card), or across all your cards (overall). This factor can affect your credit score. You should not use more than 30% of your limit. The more you charge your credit card, the higher the credit risk. So, maxing out your card can lower your credit score.

Carrying multiple cards can help with this because it will spread your balances across multiple cards, hence, keeping your credit utilization less than 30%.

All that said, if you have trouble making payments or aren’t financially stable, then you should not get multiple credit cards.

What’s the Difference Between Visa and MasterCard?

If you have a credit card or are about to get one, it’s very likely that it will either be a Visa or Mastercard. These two brands are among the most popular credit card companies in the world today, and are accepted by merchants across the globe.

Visa and Mastercard do not issue credit cards to the customers directly. Instead, they partner with banks, credit unions and other financial institutions to issue cards carrying their names. The credit card issuer (your bank) is responsible for loading up the card with terms and conditions, rewards, insurance, interest rates, fees and other features to benefit the customers. When you make your payment every month, it’s the bank who receives the payment not Visa or MasterCard.

Visa offers a few classes of credit cards – Visa Classic, Visa Gold, Visa Platinum, Visa Infinite and Visa Infinite Privilege.

All of them come with the following benefits:

  • Global acceptance around the world
  • Zero Liability program that protects you against unauthorized transactions
  • Lost/stolen card reporting that makes it easy for customers to report a stolen or lost card through just a phone call
  • Guaranteed hotel reservation service that enables you to use your Visa card to book your hotel room and holds the room regardless of how late you arrive
  • Emergency card replacement service and emergency cash advances available 24×7

Mastercard is just as universally accepted as Visa, and comes with three types of cards – Standard Mastercard, World Mastercard and World Elite Mastercard.

The benefits found in most of the Mastercard, depending on the level, include:

  • Shopping Protection – Extended Warranty, Price Protection, Purchase Protection
  • Personal Assistance – Master Global Service, free concierge services
  • Personal Protection – Zero Liability
  • Travel Assistance – Airport Lounge Access, Mastercard Global Service
  • Travel Protection – Car Rental Collision/Damage Waiver Insurance, Travel Accident and Emergency Medical Insurance, Trip Cancellation Insurance, Baggage Delay Insurance, Lost or Damaged Luggage Insurance, Hotel/Motel
  • Burglary Insurance

World and World Elite Mastercard members will also get access to a plethora of exclusive offers, upgrades and experiences from upscale retailers and luxury hotels and resorts.

Credit Card Best Practices

Before we end this comprehensive guide on credit cards, we want to leave you with some credit card best practices to help you use your card responsibly.

Keep your debt to the minimum – Try your best to pay your full balance every month. Even if you can’t, at least pay your minimum balance. That way you won’t have to pay a late payment fee along with interest.

Only buy what you can afford – Credit card can sometimes give you the illusion of having extra money. But remember that it’s not your money. It’s the banks, and you will have to pay it back by the due date. So budget well, and don’t use your credit cards to buy things that you don’t need or cannot afford to repay.

Stay within your limit – Repeatedly maxing out your credit card, or spending beyond your credit line will incur over limit fees and damage your credit score. Try to keep your balance below 30% of your limit at all times. This will show the lenders that you are a responsible credit card holder.

Make your payments on time – Not paying on time can trigger penalties and also have a detrimental impact on your credit score, especially if it’s a repeated behavior. If you find it hard to keep track of your due date, set up a monthly automatic payment.

Avoid taking cash advances – Cash advances cost you a fee per transaction, and they also have a much larger interest rate than your purchase APR. If you do take a cash advance against your limit, please pay it off in full because otherwise you will have to pay a substantial interest penalty.

Know your billing cycle – At the end of every month, there are two dates that you need to be aware of– the closing date and the payment due date. There are usually 21 to 25 days between those two dates, known as grace period. You won’t be charged any interest if you pay your balance in full within the grace period. If you fail to make the payment even after the closing date, you will be charged a late fee, and an interest.

Track your monthly statement – Go through your statements every month and check for fraud and overspending.

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