Best low interest credit cards in Canada

MBNA True Line Gold Mastercard - 🏆winner, best low interest rate credit card in the Money.ca Credit Card Awards

The MBNA True Line Gold Mastercard charges an extremely low annual interest rate of 10.99% 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.

As the lowest interest credit card from a major issuer, 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.

Additional perks: Buyer’s Assurance; Purchase Protection insurance; Additional nine authorized users with no additional fee; Discounts on Avis and Budget car rentals  

Debt refinancing example

Let’s say you buy a $5,000 couch and plan to pay it off in 12 months. You’ll pay total interest of $302 plus the annual fee for a total debt cost of $341. But if you put that same couch on a credit card with no annual fee at 19.99% you’ll pay $557.80 in interest, or 61% 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%.

MBNA True Line Gold pros and cons

Pros

• Low interest rate on purchases and balance transfers

• Proactive fraud protection

Cons

• $39 annual fee

• Penalty interest rate if minimum payments are missed

Disclosures:

• †, ✪, Terms and Conditions apply.

  This offer is not available for residents of Quebec. For residents of Quebec, please click here.

  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.

MBNA True Line Mastercard - 🏆winner, best balance transfer credit card in the Money.ca Credit Card Awards

The MBNA True Line^® Mastercard^® is Money.ca's pick for the best no fee low interest rate credit card in Canada to keep in your wallet in case of emergencies. Because it charges a low annual interest rate of 12.99% 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.  

The True Line Card comes with a lengthy introductory APR on transfers, making it an ideal option of you have an existing credit card balance to transfer:

• Get a 0% promotional annual interest rate (“AIR”)† for 12 months on balance transfers✪ completed within 90 days of account opening, with a 3% transfer fee.

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.

Additional perks: Apple Pay compatible; Additional 9 authorized users with no additional fee; Payment Plan feature.  

MBNA True Line pros and cons

Pros

• Solid welcome offer: 12 months of 0% APR† on balance transfers✪ made within the first 90 days (3% transfer fee applies)

• No annual fee or minimum income requirement

• Low standard interest rate of 12.99% for all new purchases charged to the card

• Some extra perks like fraud protection and a discount on car rentals

Cons

• 3% balance transfer fee is comparatively high

• Very high cash advance interest rate of 24.99%

• No insurance benefits

• Can’t transfer a balance owed to either MBNA or TD

Disclosures:

• †, ✪, Terms and Conditions apply.

  This offer is not available for residents of Quebec. For residents of Quebec, please click here.

  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.

Similar to the MBNA True Line, the CIBC Select Visa* Card has ongoing low rates. 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‡. This means you can pay off your balances and purchase urgent items without having to worry about paying loads of interest on both.

If you choose to carry a balance and you make your minimum payments on time, a balance transfer could save you money on interest.

Take advantage of the introductory interest rate on balance transfers. Plus, you’ll only have to pay a up to 5% - The exact fee will will be disclosed at the time the offer is made to you when you transfer your balance from another card to the CIBC Select Visa Card.

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.

Additional perks: Common Carrier Accident Insurance  

CIBC Select pros and cons

Pros

• 0% Balance Transfer rate for a generous 10 months with a low (1%) Balance Transfer fee†

• 13.99%† Purchase Annual Interest Rate

• A first year annual fee rebate†

• No annual fee for additional cards (up to 3)

Cons

• There are other low interest cards available with no annual fee whatsoever

• Few distinguishing benefits beyond its interest rates

Disclosures:

• The information for the CIBC Select Visa* Card has been collected independently by Money.ca. The card details on this page have not been reviewed or provided by the card issuer.
• †Terms and Conditions Apply. This offer is not available for residents of Quebec.

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.  

If you are strapped for cash and would otherwise seek out a payday loan for your expenses – it’s much cheaper to get a cash advance from this card.

Key features:

• 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 (waived on the first anniversary when you opt for the introductory balance transfer offer*)  

BMO Preferred Rate pros and cons

Pros

• Low-interest rate: Offers a competitive purchase interest rate

• Introductory balance transfer offer for the first nine months

• First-year annual fee waiver

• BMO PaySmart™ Installment plans: Turn new credit card purchases into small, interest-free monthly payments with a small fee.

• Additional cardholder: You can add an additional cardholder for free

• Free extended warranty and purchase protection*

• Zero Dollar Liability: protects you from unauthorized use of your credit card*

Cons

• No rewards: Your focus is paying down debt, not collecting miles.

• Foreign transaction fee: Charges a 2.5% fee on foreign transactions.

• Balance transfer fee: While normal, it’s a bit painful to have to fork over a 2% fee on balance transfers.

Disclosures:

• *Terms and conditions apply

• 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

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 rates. 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, Scotiabank allows cardholders to transfer a balance after being approved.

Enjoy 0.99% introductory interest rate on balance transfers for the first 9 months (2% fee per cash advance, 13.99% after that), plus no annual fee for the first year ($29 value)

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.

Scotiabank Value pros and cons

Pros

• Lengthy introductory APR on balance transfers

• A great low rate everyday

• Available to applicants with average credit

Cons

• No rewards program

• Insurance coverage is an optional extra

• Carries an annual fee

Disclosures:

• Conditions Apply. Visit here for the Scotiabank Value® Visa* Card to learn more. *See Card Provider's website and Card Application for complete card details, terms and current offers. Reasonable efforts are made to maintain accuracy of information.

While it's not a cash back low interest credit card, RBC does reward you with offers from great brands. For instance, when you link your card to Petro Canada, you can instantly on gas costs at Petro-Canada.

Link your card to Rexall and earn 50 Be Well points for every $1 spent on eligible purchases at Rexall (25,000 Be Well points = $10, so for every $500, you get $10 cash back at Rexall)

At an annual fee of and an APR of 12.99%, it earns its spot as a top low APR card.

RBC Low Rate pros and cons

Pros

• Low interest rate

• No minimum income requirement

• Basic purchase protection and extended warranty

• Linked benefits with Petro-Points program

• Holistic evaluation for varied credit histories

Cons

• $20 annual fee

• Other cards offer similar rates with no annual fee

• Optional benefits may be found cheaper elsewhere

• Not among the best low-interest cards due to competition

• Balance transfer promotions lacking compared to competitors

Disclosures:

• Refer to RBC page for up to date offer terms and conditions.
  
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At 12.99% interest rate and an annual fee of $25, it's a good option for a low interest rate card in Canada.

They also throw in travel accident insurance, buyer's assurance, purchase protection plan, and access to exclusive or presale tickets.

Amex Essential Card pros and cons

Pros

• Low APR for purchases and cash advances

• Low annual fee and free additional cards

• Buyer’s purchase protections for extended warranty

• Easy eligibility for Canadian residents

• World-class service from American Express

• Access to exclusive events with American Express® Experiences

Cons

• Potential high fees for late-payments and foreign transactions

• Interest rates may increase if payments are missed

• Limited installment program fees may apply

Disclosures:

• Contact American Express for the most up-to-date referral bonus figures.

  American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information, click the Apply Now link. If you apply and get approved for an American Express Card, (I/we) may receive compensation from American Express, which can be in the form of monetary payment.

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.

Read more: How does credit card interest work?

Let's consider the CIBC Select Visa* Card, which is known for its low interest rate. Now, let's compare this to a typical credit card with a 19.99% interest rate and no annual fee.

Scenario:

Imagine you have a $5,000 balance on your credit card that you plan to pay off over 12 months.

Savings:

• Interest saved: $550 - $380 = $170
• Minus annual fee: $170 - $29 = $141

In this scenario, you would save about $141 in the first year by using the low APR card, even after accounting for the annual fee. Again, let's compare this to a typical credit card with a 19.99% interest rate and no annual fee.

The MBNA True Line Gold is our pick for the best low APR credit card in Canada thanks to its impressive everyday APR. 

Scenario:

Imagine you have a $5,000 balance on your credit card that you plan to pay off over 12 months.

Savings:

• Interest saved: $550 - $300 = $250
• Minus annual fee: $250 - $39 = $211

In this scenario, you'd save about $211 in the first year by using the MBNA True Line Gold Mastercard, even after accounting for the annual fee. That's like finding an extra $200 in your pocket!

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.

Two popular choices for managing interest are low interest and 0% introductory APR cards. Each type offers distinct advantages and potential drawbacks, catering to different financial needs and situations.

Low interest credit cards provide a consistent, reduced interest rate, typically ranging from 10.99% to 15.99%. These cards are beneficial for individuals who frequently carry balances from month to month, offering predictable interest charges and potential long-term savings. While they may not offer the initial zero-interest period of their counterparts, low interest cards provide stability and can be a reliable option for ongoing debt management.

On the other hand, 0% introductory APR cards offer a period of no interest, usually lasting 6 to 12 months. These cards can be particularly advantageous for those planning large purchases or looking to transfer high-interest balances. However, it's crucial to note that after the introductory period, interest rates often increase significantly. This type of card requires careful planning to ensure the balance is paid off before the higher rates take effect.

Read more: The best balance transfer credit cards

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