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When it comes to credit cards, there are plenty of options to choose from. Ultimately the card you choose should suit your needs, whether it’s to get cash back rewards for every expenditure you make, coverage with travel insurance, or access to VIP airport lounges, to name a few.

That said, you might also be looking for a card that gives you all the conveniences that come with a credit card, but without the high annual fees or interest rates. 

Good news: you have several cards that can help you save. Let’s take a closer look at some of the lower fee, lower rate credit cards out there.

What Is A Low-Rate Credit Card?

If you pay off your credit card balance in full every month, then the interest rate that comes with your card might not matter much to you. But if you have a tendency to carry a balance month to month, you’ll be charged interest on the outstanding balance. The higher the interest rate charged, the more you’ll have to pay on the amount you owe. 

For this reason, it’s important to know the interest rate on your credit card, both for purchases and cash advances. Most credit card interest rates range from 19% to 22%. Low-rate credit cards, on the other hand, offer lower interest rates compared to the average credit card, often less than 14%, which can help you save money when carrying a credit card balance

When Is It Better To Have A Low-Rate Credit Card?

If you don’t pay the full amount when it’s time to pay your credit card bill, then a low-rate credit card may be best. As mentioned, credit card interest rates tend to be quite high. Even a moderate balance carried over month to month can translate into significant interest payments.

How Much Can You Save With  A Low-Rate Credit Card?

Monthly payment$100$100
Total interest paid$1,192$647
Months until paid off4237

*Keep in mind that this example is based on a senior where a consumer does not continue to make purchases with their credit card.

What Is A Low-Fee Credit Card? 

Many credit cards offer perks, such as cashback rewards for every dollar spent, travel insurance, and other benefits. In exchange for these frills, credit card companies may charge a higher annual fee. It’s important to weigh the savings you’d get to make sure these annual fees are worth it. 

If you can rack up $1,000 per year in points with your credit card expenditures, for instance, then a $199 annual fee would be worth it. Otherwise, it may be worth it to seek out low-fee cards that won’t take such a bite out of your wallet. Luckily, there are plenty of cards available with low fees and sometimes no annual fee at all. 

When Is It Better To Have A Low-Fee Credit Card?

If you pay your credit card in full every month and rarely carry a balance, then the interest rate might not affect you very much. Instead, you may be better off looking for a card with a low annual fee. Ideally, you’ll want to find a credit card that not only charges a low annual fee but also comes with certain perks that you might find useful. 

For example, if you tend to spend a lot of money at a specific grocery store chain, a credit card that offers a high cash back rate for every dollar spent when you shop at that particular store can take your money far. In this case, a high annual fee might be worth it in exchange for these perks. 

Best Low-Rate Credit Cards In Canada

Most major banks offer a variety of credit card options to clients, and some are more expensive than others. The following cards come with the lowest rates.

Annual FeeRate
TD Emerald Flex Rate Visa Card$25– Purchase: TD Prime + 5.50% to 13.75%
– Cash advance: TD Prime + 5.50% to 13.75%
CIBC Select Visa Card$29– Purchase: 13.99%
– Cash advance: 13.99%
BMO Preferred Rate Mastercard$20– Purchase: 12.99%
– Cash advance: 15.99
RBC Visa Classic Low Rate Card$20– Purchase: 12.99%
– Cash advance: 12.99%
Scotiabank Value Visa Card$29– Purchase: 12.99% 
– Cash advance: 12.99% 
MBNA True Line Gold Mastercard$39– Purchase: 8.99%
– Cash advance: 24.99%
MBNA True Line Mastercard$0– Purchase: 12.99%
– Cash advance: 24.99%
National Bank Syncro MasterCard$35– Purchase: 10.70%
– Cash advance: 14.70%
HSBC +Rewards Mastercard$25– Purchase: 11.90%
– Cash advance: 11.90%

Best Low-Fee Credit Cards In Canada 

If paying a monthly fee to use your credit card doesn’t sound appealing to you or doesn’t fit into your budget, check out the low-fee credit cards below.

Tangerine Money-Back Credit Card$0– Purchase: 19.95%
– Cash advance: 19.95%
Simplii Financial Cash Back Visa Card$0– Purchase: 19.99%
– Cash advance: 22.99%
Brim Mastercard$0– Purchase: 19.99%
– Cash advance: 21.50%
TD Cash Back Visa Card$0– Purchase: 20.99%
– Cash advance: 20.99%
MBNA True Line Mastercard$0– Purchase: 12.99%
– Cash advance: 24.99%
PC Financial World Elite Mastercard$0– Purchase: 20.97%
– Cash advance: 22.97%
Neo Credit$0– Purchase: 19.99% – 26.99%
(QC: 19.99% – 24.99%)
– Cash advance: 22.99% – 28.99%
(QC: 22.99% – 25.99%)
BMO CashBack MasterCard$0– Purchase: 19.99%
– Cash advance: 22.99%
BMO AIR MILES MasterCard$0– Purchase: 19.99%
– Cash advance: 22.99%
Triangle Mastercard$0– Purchase: 19.99%
– Cash advance: 22.99%

Frequently Asked Questions

What is the average credit card rate in Canada?

  The average credit card interest rate in Canada is around 19% to 22%, though rates can be as high as 29.99%.

How is credit card interest charged?

Credit card interest only applies to outstanding balances that are carried over month to month if the full credit card bill is not paid by the due date. Interest is accrued on a daily basis. 

Do no-fee credit cards have a rewards/points system?

There are a few no-fee credit cards that offer a points system, including the Tangerine Money-Back Credit Card, Brim Mastercard, and TD Cash Back Visa Card.

Do low-interest credit cards offer a rewards/points system? 

Yes, most credit cards with an annual fee — including low-fee cards — offer some type of rewards system, such as the BMO CashBack Mastercard and TD Cash Back Visa Card.

Final Thoughts

If you’re looking to save money on your credit card, then look for one that offers a low-interest rate or low or no annual fees. If you’re the type to carry a balance from month to month, then a low-rate card makes more sense. But if you’re looking for perks like cash back rewards or travel insurance, then choose a card that offers these frills without a significant annual fee. 

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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