Have you tried to apply for a credit card but got turned down? Odds are it’s because your credit history isn’t up to par. But how are you supposed to build good credit if you’re not given the financial tools to do so?
Luckily, there are certain types of credit cards available for Canadians with no credit or low credit scores. By using them responsibly, you can steadily build up good credit to the point where more financial products will be available to you, including traditional unsecured credit cards.
In the meantime, you’ve got to build your credit, and secured credit cards are the perfect financial product to help you do that. Rather than being allotted a specific credit limit for you to spend within, you are responsible for fronting a security deposit, which would essentially become your credit limit. Basically, you’d only be spending money that you already have.
It’s important to make sure your secured credit card provider is reporting your payments to the credit bureaus. This way, by using it for necessary expenses, like recurring monthly bills and making timely payments each billing cycle, you’re credit score will be positively affected.
Eventually, you can build your credit enough so that when the time comes to take out a car loan, personal loan, unsecured credit card, or mortgage, you’ll have the financial strength to get approved.
The question is, what are some of the best credit building credit cards available to Canadians? In this article, we’ll give you a run-down to help make your decision on which product to use.
Our list of the best credit building credit cards was collected by using specific criteria to assess each card, including the following:
The following table outlines the best credit building credit cards for Canadian consumers:
| Neo CardTM (Secured) | Capital One Guaranteed Secured MasterCard | Home Trust Secured No-Fee Visa | No-Fee Scotiabank Value Visa | TD Cash Secured Credit Card | |
| Annual fee | $0 | $59 | $0 | $0 | $29 |
| Annual interest rate | 19.99% – 26.99% | 19.8% | 19.99% | 16.99% | 22.99% |
| Minimum credit limit | $50 | $300 | $500 | $500 | $500 |
| Maximum credit limit | $10,000 | Not specified (increases can be made every 6 months) | $10,000 | Not specified | $5,000 |
| Income requirement | $0 | $0 | $0 | $12,000 | Not specified |
| Eligibility | Guaranteed approval with minimum deposit | Guaranteed approval | Credit check required | Credit check required | Application required |
The Neo Card (Secured) is a secured Mastercard that offers users the benefits of both a secured and unsecured credit card. The Neo Card guarantees approval, so long as you’re able to provide the minimum security deposit of $50. There are no credit checks or income requirements for this card, making it ideal for those with poor credit. This is especially true as the Neo Card is also designed to help users build their credit. Moreover, it has no annual or monthly fees and users can earn enormous bonuses – like 15%1 cashback for first purchases – at some Neo Partners, an average of 5%1 cashback with select partners.
Neo is offering new customers a $25 welcome bonus, sign up by clicking the button below and receive your $25.
Neo CardTM holders can customize their cards by adding perks. Neo perks are stackable and reward you for spending by boosting cashback offers for different categories. Neo perks are flexible and come with no commitment. You can easily add a perk to your card via the Neo app and cancel it at any time.
Valued at over $170 a year, Everyday Essentials perks can be added to your Neo Card for a low fee of $8.99 a month. With it, users can earn 1.5x more cash back when they shop at participating grocery stores and gas stations.
Neo Travel perks cost $4.99 a month and have a value of over $360 a year. Users who travel regularly will benefit from the added perks.
Premium Access perks is a great option for all Neo Card holders, as the price tag is so affordable at $0.99 a month with a value of over $100 a year.
If you’re just starting to establish credit or have a low score that you’re trying to improve, then the Capital One Guaranteed Secured MasterCard may be a great card to consider. Approval is guaranteed, and interest rates are comparable to traditional unsecured credit cards, so you’re not paying any more than you need to. If you continue to make timely payments every month, you may be able to increase your credit limit and eventually upgrade to the unsecured card version.
Not only does the Home Trust No-Fee Secured Visa make it easier to get approved for a credit card with low or no credit, but it also comes with no annual fees, making it an affordable option for Canadians looking to build their credit score. While a credit check is required, the vast majority of applicants of the Home Trust No-Fee Secured Visa are approved. Once you get your hands on it, you can use it like any other conventional unsecured credit card and build your credit with every timely payment you make.
The No-Fee Scotiabank Value Visa can help Canadians save money with no annual fee and a very competitive interest rate of 16.99% while building credit. Plus, you’ll be able to take advantage of certain unique perks while building your credit, such as discounts on car rentals and card protection. And if you apply today, you can benefit from a super-low introductory interest rate of 3.99% for the first 6 months.
Build or improve your credit score while earning cashback on purchases with the TD Cash Secured Credit Card. You can use it just like any regular credit card to buy goods while earning rewards. And with every on-time payment that you make, you can effectively build good credit over time and eventually upgrade yourself to a conventional unsecured TD credit card of your choice.
If you’re just starting to build credit, it can be tough to develop a credit score that will open the doors to various credit and loan products. After all, credit is built by making sound financial decisions using financial products. But if you don’t have a financial product available to you to use, such as a credit card, then it can be tough to establish your credit and keep your credit score up.
Secured credit cards are much easier to get approved for compared to conventional credit cards. While the traditional cards involve having credit extended to you, credit building credit cards involve the use of your own money that you put up front in the form of a security deposit and credit limit. Since you’re essentially spending your own money, there’s little risk to the creditor, so accessing a credit building card like this is easy.
If you are financially responsible and have the funds needed to make a security deposit and are disciplined enough to spend within that limit, then it may be time for you to apply for a credit building credit card to help you establish credit. Eventually, you should be able to bring your credit score up to a level that will afford you many other credit products at attractive terms.
When it comes to choosing any type of financial product, there are always going to be both pros and cons that you need to weigh. Consider the following information when deciding if a credit building credit card is right for you.
Considering how many credit building credit cards are available, it can be difficult to choose just one. But based on certain criteria, you can make that decision a bit easier. When shopping for a credit building credit card, keep the following factors in mind:
If you’re looking for a way to establish credit and build it, a credit building credit card may be the perfect solution. By using it responsibly, you can build the credit needed to make more financial tools available to you in the future.
Card issued by ATB Financial pursuant to license by Mastercard International Inc.
1Average based on current offers at select partners. Cashback varies per plan, offer and partner.
Rating of 5/5 based on 1 vote.
Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Earn up to 12,000 bonus Scene+™ points in your first year (that’s up to $120 towards travel).
New Offer! Get up to $2,000 cashback + a $50 bonus on signing up. Conditions apply.
Earn an average 5%¹ cash back at thousands of partners and at least 0.5%² cashback guaranteed.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.
