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The thing about credit is that you need it to access it. While there are specially designed credit cards for those who are starting to build credit, obtaining a credit card with bad credit is often very difficult. Thankfully, some creditors understand the struggle these individuals face and have created options for those looking for a credit card with bad credit.

What Is Bad Credit? 

Before we dive into the different options, it’s important to understand who falls into this category and how it happens. 

In Canada, credit scores range from 300 to 900. Depending on where your score falls within this range it will be difficult or easy to obtain a new credit card. Generally, credit scores below 560 are considered bad or poor. 

What Causes Bad Credit? 

There are two main situations you might have bad credit: 

  • You’re just starting and want to build credit. The lack of credit activity on your file can lead to a low credit score.
  • You’ve made some bad financial choices which have caused your credit to fall.

Regular Credit Cards For Bad Credit

Regular credit cards are unsecured, which means there is no collateral backing the credit. This makes these types of credit cards riskier for creditors, and as such, the interest rates are typically high. 

The requirements to qualify for a credit card vary based on the credit card you’re applying for. Credit cards with higher limits and added perks like travel insurance, extended warranty and more, typically require a high credit score and income level. That said, some unsecured credit cards are much easier to get approved for than others. 

Best Unsecured Credit Cards For Bad Credit

Just because you have bad credit doesn’t mean that you should settle for the first credit card company that approves you. Indeed, you’ll probably have fewer options than someone who has good credit, but there are still options from which you can choose.

If you have bad credit, you may still be able to qualify for the following credit cards. 

Bad Credit Credit CardsAnnual FeeInterest RateEligibility Requirements
Tangerine Money-Back Mastercard$019.95%-Minimum $12,000 annual income
-Have not declared bankruptcy in the last 7 years
PC Financial Mastercard$020.97% -Subject to credit approval and other eligibility criteria
BMO Preferred Rate Mastercard$2012.99% -Minimum $15,000 annual income
-Have not declared bankruptcy in the last 7 years
Scotiabank Value Visa$29 12.99%-Minimum $12,000 annual income
-Have not declared bankruptcy in the last 7 years

Tangerine Money-Back Mastercard 

The Tangerine Money-Back Mastercard is among the more popular no-fee cashback credit cards. You’ll earn up to 2% cash back on all purchases, which is relatively high given the $0 annual fee. And for the first 2 months, you can enjoy up to 10% in extra cash-back rewards as a welcome bonus. 

The card currently offers a 1.95% promotional balance transfer rate within the first 6 months, and it also comes with purchase protection and an extended warranty at no extra charge.

  • 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
  • Eligibility requirements: Be a permanent resident and the age of majority in your province. Have a minimum $12,000 annual income and no previous bankruptcies in the last 7 years.

Special Offer

Apply for a Tangerine Money-Back Credit Card by April 30, 2024. If you’re approved, you’ll earn an extra 10% back on up to $1,000 in everyday purchases made within your first 2 months.*

PC Financial Mastercard

Another popular no-fee credit card among Canadians is the PC Financial Mastercard. You’ll earn at least 10 points per dollar at participating merchants that can be redeemed once you’ve accumulated 10,000 points. The card is easy to get approved for and can be used to build or improve your credit. 

  • Annual fee: $0
  • Earn rate: 10 points per $1 spent at PC grocery stores; 25 points per $1 spent at Shoppers Drug Mart; 30 points per $1 spent at Esso Mobile; 20 points per $1 spent at PC travel; 10 points per $1 spent everywhere else
  • Interest rate: 20.97% purchase rate
  • Perks: Purchase protection and extended warranty
  • Eligibility requirements: Minimum 560 credit score

BMO Preferred Rate Mastercard

One of the lowest credit card rates you’ll find is with the BMO Preferred Rate Mastercard, a low-fee credit card that comes with a highly competitive purchase rate of 12.99%. While it doesn’t offer any points system, it makes up for it with its low-interest rates. And for the first 9 months, you can take advantage of an ultra-low balance transfer rate of 3.99%. 

The card also comes with free purchase protection and extended warranty coverage, as well as coverage against fraudulent use of your card. 

  • Annual fee: $20 (waived the first year)
  • Welcome bonus: 3.99% introductory rate on balance transfers for 9 months; annual fee waived for the first year
  • Interest rate: 12.99% purchase rate
  • Perks: Free purchase protection & extended warranty; zero dollar liability coverage against unauthorized card use
  • Eligibility requirements: Have a minimum annual income level of $15,000 and no previous bankruptcies in the last 7 years. 

Scotiabank Value Visa

The Scotiabank Value Visa card is a great low-fee credit card to consider if you’re looking for an affordable way to access cash from your card and want a low-interest rate on all purchases (12.99%). Right now, Scotiabank is waiving the annual fee of $29 for the first year and offering a 0% promotional rate on cash advances for the first 6 months.

You can also take advantage of a 25% discount on car rentals at AVIS and Budget locations across Canada and the US. Plus, the minimum requirements for this card are really low, making it easy to qualify for.

  • Annual fee: $29 (waived the first year)
  • Welcome bonus: 0.00% introductory rate on cash advances for the first 6 months; annual fee waived the first year
  • Interest rate: 12.99% purchase
  • Perks: 25% off car rentals at participating AVIS & Budget rental locations; optional insurance coverage for death, critical illness, hospitalization, disability, job loss, or strike
  • Eligibility requirements: Have a minimum $12,000 annual income and no previous bankruptcies in the last 7 years.

Secured Credit Cards For Bad Credit

Secured credit cards work just like regular credit cards, except they require an upfront deposit with the credit card issuer, known as the security deposit. This deposit acts as your credit limit and will be used as collateral in the event you default on your payments. Secured credit cards are a great choice for bad credit borrowers as these cards can help you build credit and you’re guaranteed approval so long as you can provide the minimum security deposit.

Best Secured Credit Cards

Annual FeePurchase Interest RateMin – Max Deposit
Neo Secured Card$019.99%-24.99%$50 – $5,000
Home Trust Secured No Fee Visa$019.99%$500 to $10,000

Neo Secured Card

The Neo Secured Card is a popular choice among Canadians. The card comes with unlimited cashback rewards at dozens of participating stores, and an earn rate of up to 5% cashback. You can even download a virtual card so you don’t have to carry plastic when you shop. 

  • Annual fee: $0
  • Earn rate: Up to 5% cash back at participating merchants; 
  • Welcome bonus: Up to 15% cash back on your first purchase at participating merchants
  • Interest rate: 19.99%-24.99% purchase rate & 21.99-26.99% cash advance rate
  • Perks: Spending tracker; virtual card; rewards plans at various merchants; Mastercard’s Zero Liability protection; payment security
  • Eligibility requirements: Must be able to provide the $50 minimum deposit. 

Home Trust Secured No Fee Visa

Newcomers to Canada or young adults just starting to work on building credit will find the Home Trust Secured No Fee Visa useful. The card comes with a standard purchase interest rate of 19.99%, and there’s no annual fee. Credit limits range from $500 to $10,000. 

  • Annual fee: $0
  • Interest rate: 19.99% 
  • Perks: Zero Liability policy
  • Eligibility requirements:  Must be able to provide the $500 minimum deposit. 

Prepaid Credit Cards

Prepaid cards come with a credit limit based on the deposit you make on your account. They work like regular credit cards, but rather than purchasing items on credit, you’re spending money you’ve already loaded onto the card.

While you can build credit using secured credit cards, you can’t build credit with prepaid cards because the credit card issuer does not report these transactions to credit bureaus. However, some prepaid cards come with the option to add a credit building feature (for an extra fee) that helps you to build credit with each timely payment you make. 

Best Prepaid Credit Cards

The following prepaid credit cards are worth looking into if you want something that is easy to get approved for and makes everyday purchases easy and convenient.

Annual FeeFeatures
KOHO Prepaid Mastercard$0 – $84– Earn 1% – 2% cash back on groceries, transportation, and eating out (depending on account type).
– Get up to 50% extra cashback with select merchants.
– Earn saving interest on your entire KOHO account balance.
– Free Financial Coaching.
STACK Prepaid Mastercard$0– Exclusive rewards.
– $0 foreign exchange fees.

KOHO Prepaid Mastercard

KOHO offers three types of accounts that all come with a prepaid credit card. The KOHO Prepaid Mastercard is a fantastic card that teaches you how to budget and keep your expenditures in check with its budgeting app and free financial coaching.

Depending on which account you choose, you can earn cash back on most purchases you make as well as extra cash back when you shop with KOHO partners. Furthermore, account holders can earn savings interest on their entire KOHO account balance.

With KOHO, you can also build your credit through their Credit Building Program or their Flexible Credit Building program.

  • Their Credit Building Program has a monthly subscription fee and you can stay opted in for as many months as you need. Each payment made is reported to the credit bureaus which can help you build credit.
  • Their Flexible Credit Building is a line of credit that you can use to help build credit. It has a small monthly fee and you can deposit between $30 -$500 in your line of credit, which you can use to make purchases. Each payment is reported to the credit bureaus which can help build your credit

Sign up using the code LOANSCANADA to get $20 free.

Annual Fee:

  • KOHO Essential: $4/monthly or $48/annually
    • 0$/ monthly if you set up a direct deposit or contribute $500 per month
  • KOHO Extra: $9/monthly or $84/annually
  • KOHO Everything: $19/monthly

Earn Rate:

  • KOHO Essential:
    • 1% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking
    • Up to 50% extra cash back with select merchants
  • KOHO Extra:
    • 1.5% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking
    • 0.25% cash back on all other categories
    • Up to 50% extra cash back with select KOHO partners
  • KOHO Everything:
    • 2% cash back on groceries, transportation (gas, parking, rideshare apps, etc.), and eating and drinking
    • 0.50% cash back on all other categories
    • Up to 50% extra cash back with select KOHO partners

Bad Credit Credit Cards FAQs

What are secured credit cards?

Secured credit cards are a great option for those with poor credit as they have very low requirements and can help you improve your credit. A secured credit card works just like a regular credit card except it requires a security deposit as collateral so your lender doesn’t bear all the risk, which also acts as your credit limit. Moreover, it often doesn’t have the same perks as credit cards such as travel insurance. 

How do I choose a secured credit card? 

Not all credit card companies offer secured cards and not all secured credit cards are created equal, so just like you would with a traditional card, shop around and do your research. Finally, make sure the company you choose reports to the credit bureaus, this is extremely important if you’re trying to rebuild your credit score.

Can I get a credit card with a 600 credit score?

If your credit scores fall in the low 600s then you’ll definitely have more options than someone with credit scores in the 500s. You’ll probably qualify for a traditional credit card and won’t need a secured one, but you’ll also still be high risk. You’ll have to look around and find a company that’s willing to approve people with slightly lower credit scores. 

Can I get a credit card with a credit score of 650? 

Once your credit scores break into the high 600s you should have significantly less trouble being approved for a traditional credit card. However, to qualify for the more high-tiered credit cards may require even higher credit scores.

Bottom Line

Credit cards are one of the easiest credit products to qualify for, but when you have bad credit it can be difficult. Thankfully, there are options for you to choose from, just remember to use it responsibly once you get one. Be sure to pay the full amount on time and make sure the balance doesn’t get out of hand. With time and continued responsible credit usage, you should see your credit improve.

Lisa Rennie avatar on Loans Canada
Lisa Rennie

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.

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