Find the best credit cards based on the rewards they offer in one place with Comparewise. The right credit card can save you money when you shop at your favourite stores to get cashback, rewards, or travel points.

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Many people overlook the fact that owning a credit card is essential. Even if you have the cash to purchase your wants and needs, you are going to need a credit card to build your credit score if you are planning to buy a car or house one day.

Plus, owning a credit card or credit cards has many benefits. Yes, you read that right—some people have two or more credit cards.

And usually, these people have enough money to pay for cash and only use their credit cards to build their credit score and get the benefits! One of the rewards you can get—such as flight miles, cashback, and more!

However, it is confusing when trying to choose a credit card—especially your first one. Some credit cards have annual fees, while some high large interest rates.

Fortunately, this article will serve as a guide for you when trying to choose the best credit cards. Now, the best credit cards in Canada will depend on many factors, such as credit limit, interest rates, and rewards.

This list of best credit cards in Canada will include different options that cater to your needs. For example, if you like to travel, you can get one with the best airline miles rewards, and if you love shopping—you can choose one with the best cashback and rewards!

Anyway, here is a list of the best credit cards in Canada:

Best Travel Credit Card

TD First Class Travel Visa Infinite Card

The TD First Class Travel Visa Infinite Card is one of the best credit cards for traveling for several reasons.

You can get 9 points for every dollar you spend when purchasing airline tickets on Expedia, which has an extensive list of flights and hotels. You will also get 3 points when you use it for anything else—making it a flexible choice.

You can earn the most points with this card the more often you travel. So, if you do a lot of traveling during the year, this card is the best option to maximize your rewards and benefits.

Once you have enough points to purchase flights and hotels, you can instantly use your rewards on Expedia for TD, allowing you to be more flexible with the airlines and destinations of your choice. With the TD Travel Visa Infinite Card, you can earn as much as 4.5% in rewards.

Plus, Expedia for TD will allow you to use your points anytime, unlike other cards that require a certain amount before redeeming your points. Other benefits of this card are travel insurance, priority pass membership discounts, and car rental discounts.

However, the only drawback with this credit card is the $120 annual fee and high-income requirement of $60,000.

Best Cash Back Credit Card

Scotiabank Momentum Visa Infinite

If you want to maximize your cashback from a credit card, the Scotiabank Momentum Visa Infinite is your best bet. It is an excellent credit card that gives you a total of 4% cashback on recurring bills and grocery purchases.

Everyone buys groceries, and you can get rewards for paying with this card. Let’s say you spend a monthly of $500 on groceries, and you can get up to $20 of extra cash every month on groceries alone. You can also get 2% on gas and daily transit and 1% cashback on every other purchase.

Just by using this card and paying it off at every billing cycle will make you more money just by purchasing your needs—making it the better choice for cashback rewards.

If that is not good enough, the first year is free. It is one of the best credit cards for prominent families who spend a lot on groceries and gas money. However, the annual fee is $120. But if you spend a lot on groceries, the rewards alone can pay the yearly fee itself!

Best Low-Interest Credit Card

MBNA True Line Gold Mastercard

If you need a credit card for emergencies and assist you with your finances, the MBNA True Line Gold Mastercard is an excellent choice. It has a low interest rate of 8.99%, which is significantly low compared to high rewards credit cards. It is also a wonderful card for building your credit score without being exposed to high interests and annual fees.

There is an annual fee of $39, but compared to other cards that have annual payments over $100, it is pretty low. Having a credit card is an excellent choice for emergencies, which is why this particular option is a good choice based on the low interest and low annual fee.

If you do the math and think about it, compared to cards with high interest, you can save more if you use this card for purchases, even with the annual fees. This credit card is also applicable for a cash advance. The only drawback is the 24.99% interest on cashback.

If you are looking for a low-risk credit card that you can use to pay for items upfront, this low-interest credit card is an excellent option for avoiding getting in too much debt for buying expensive things that you want and need.

Best No Annual Fee Credit Card

Tangerine Money Back Credit Card

Usually, no-annual-fee credit cards don’t have as many benefits, but the Tangerine Money-Back Credit Card is an exception. With a 0% annual fee, you can still get up to 2% cashback on groceries, gas, and dining. And on top of that, you can get 0.5% cashback on every other purchase. It is a pretty good deal for a credit card with no annual fees.

You also have the power to customize your cashback options upon signing up. If you’re approved, you’ll earn 15% back (up to $150) when you spend up to $1,000 in everyday purchases within your first 2 months.

Plus, the minimum income requirement is only $12,000, allowing anyone working a part-time or minimum wage job to enjoy cashback rewards! The only drawback is its low rewards, but considering that there is no annual fee—that is probably the best deal you can get.

Suppose you reach a $60,000 annual income. In that case, you can apply for the Tangerine World Mastercard and get additional rewards and other perks, such as mobile devices and car rental insurance—this is one of the best credit cards in Canada with no annual fee.

Best Balance Transfer Credit Card

BMO Cashback Mastercard

Owning more than one credit card can easily make you fall behind on payments, but don’t worry. Many people fall on this path, and the easiest way to get back on top is by consolidating your debt to one low-interest account. The best card for this situation is the BMO Cashback Mastercard.

It is a low-interest credit card that will help you stay on top of your finances by consolidating your debt. You can also get up to 6 to 9 months of low interest, giving you more time to pay your outstanding balance at incredibly low interest rates down to 1.99%.

Imagine your old 22.99% interest rate from your old credit card debt. From that to 1.99% is a significant drop, which can help a lot if you want to pay it off within 6 to 9 months. Aside from the low interest rates, you also have the chance to earn 5% cashback for the first three months of spending, and 3% for all purchases after the three-month period.

Unlike other cashback cards, you can get 3% of what you spend on anything, whether it’s gas, groceries, dining, airfare, and more. The only drawback is the 19.99% interest rate after the first 9 months. Only use this card if you are certain that you can pay off your debt in a short period—but you get to enjoy cashback and a $0 annual fee after that.

Best Aeroplan Credit Card

American Express Aeroplan Card

New cardholders are offered up to 40,000 Aeroplan points just for signing up with this credit card. After spending $1,500, you can also get an additional 10,000 points, which will give you a total of 50,000 points instantly. If you decide to charge at least $500 in purchase to the card, you can also get an additional 2,500 points. The deals and rewards on this card are just overflowing!

If that is not enough, you can book any economy fare, a round-trip ticket on Air Canada to any destination in North America and receive a Bonus Buddy Pass, allowing you to bring a friend for free. If you fly with Air Canada, you can get 2 points per dollar spent and 1.5 points per $1 on restaurants and food delivery services.

In addition, you will get 1 point per $1 on any other purchase. It is an excellent credit card for traveling, and the fee is only $120, which is very little, considering the amount you can save on traveling.

Best Air Miles Credit Card

BMO Air Miles Credit Card

The BMO Air Miles Credit Card is one of the best credit cards for air miles rewards in Canada. As a sign-up bonus, you can 800 AIR MILES Bonus Miles (that’s enough for $80 towards purchases with AIR MILES Cash) and a 1.99% introductory interest rate on Balance Transfers for 9 months with a 1% transfer fee.

Aside from the bonus miles, you can get other travel perks, such as lounge service access, and concierge service.

Even more exciting than the big rewards, there is no annual fee for this card. You can use it for free, which is a pretty good deal, considering the number of rewards you get just by signing up. The only downside of this card is its high interest rate of 22.99%, which is pretty high if you do not pay your bill on time.

Best Grocery Credit Card

American Express Cobalt Card

Groceries are essential, and even without a credit card, you are spending money on weekly or monthly groceries because they are basic needs. If that is the case, you can use the American Express Cobalt Card to earn rewards for your basic needs.

You can earn 5 points for every $1 you spend. Each point is valued at $1.75, which gives you an 8.75% return for any purchases on your card. It is a pretty good deal, considering you are going to spend money on groceries anyway, with or without a credit card.

The wise choice is to take advantage of your spending and enjoy the rewards while you are at it. Imagine getting 1,000 points you can use for traveling for only spending $10 on groceries! It doesn’t get any better than that. The monthly fee is $12.99.

Best Student Credit Card

CIBC Dividend Visa Card for Students

Students without any credit history can also open up their first credit card for emergency purchases and for building a credit line. This particular credit card is the best option for students because it doesn’t have an annual fee.

Plus, you can also get rewards of up to 2% on groceries and 1% on gas and public transportation. Those are excellent rewards for a first-time credit cardholder. Aside from the rewards, students can also get purchase protection on most purchases, and new cardholders can get a $30 cashback after their first purchase within the first four months.

It is so easy to get approved for this card, even without any prior credit history—making it an excellent choice for students to learn how to be responsible and build their own line of credit.

How do credit cards work?

Credit cards are pretty simple. You can use them to pay for purchases within your credit limit, and at the end of the month, you can pay off the entire credit, or you can pay a minimum amount.

However, paying a minimum will result in an interest rate. It will usually show you the minimum amount you need to pay each month, depending on your debt.

Usually, for first-time credit card holders, the lender will issue a $500 to $1000 credit limit, depending on your income.

The more you use the credit card and pay for the balance, your credit limit will increase each year. You can also update your annual income if you need an increase.

However, the credit limit increase varies from credit card to credit card. Some companies will allow you to request a boost if you have an excellent payment history and have proven yourself an ideal customer through the years.

Some credit cards offer different rewards the more you use them. Some options offer rewards points for specific stores, while some options offer cashback up to 3%. For example, if you spend $2000, you can get a cashback of $60.

Sounds pretty good, right? As long as you can pay off your credit card in time without acquiring interests and late fees, you can do well with a credit card—and avoid falling into uncontrollable debt.

Can credit cards improve your credit score?

Credit cards are the best way to improve your credit score—specifically paying off a credit card. There are many factors that allow you to improve your credit score by owning a credit card, such as:

On-time payments

Your history of on-time payments can help show credit card companies how you manage your credit by never missing or never paying late payments. It shows how responsible you are, which can lead to a better credit score and higher credit limit.

If you pay your credit as late as 30 days, it will automatically get reported to the credit bureaus, which can lead into a lower credit score, and you end up paying late fees.

An excellent way to avoid paying late fees is to set up an autopayment method, which will automatically pay a minimum or maximum amount, depending on your settings.

If you plan to use your credit card frequently each month—paying on time and setting automatic payments is the best way to avoid forgetting to pay. It will also ultimately lead to a higher credit score.

Oldest credit line

Another factor that affects your credit score is your oldest credit line. The average credit line is 3 to 7 years, a good credit line is around 8 to 24 years, and anything above that is excellent.

Maintaining your credit line and paying on time can affect your credit score—for good or for worse. Your oldest credit line shows lenders how much experience you have in handling credit, which adds to your credibility, especially if you are looking to get a home or auto loan.

It is a good idea to pick the best credit cards as your oldest credit line, so you can maintain good standing and keep it open for the purpose of building credibility with the lenders for future loans and credit limit increases.

It might take a while to build. Your credit score is based on history, but it is a sure way to do so—especially if you can maintain a good standing with your oldest credit line.

Amount of credit used

The total amount you spend with your credit can also affect your credit score. The ideal amount you should use is around 10% or lower, and the average is around 30% to 60%.

Anything beyond that is below average—showing lenders that you rely too much on your credit cards. It also makes achieving equity and paying off your balance a little more challenging for you—which is not very good in the eyes of credit card companies.

Make sure you only use around 30% of your total credit limit if you can. This method can help increase your credit score. However, you can also use a big chunk of your available credit as long as you pay it off monthly.

For example, you can use $1000 as long as you pay it off by the end of the month. Doing this method can significantly increase your credit score and credit limit, which is a technique that most credit card holders use to increase their credit score.

If you are about to buy something expensive with the cash you have on hand, you can pay it with a credit card first—then pay it off with the cash you have.

This technique will not only increase your credit with no interest, but you may also enjoy the rewards, depending on the credit card you are using.

Recent inquiries

Did you know that the more inquires you make for different credit cards can also affect your credit score? Although it is customary to ask about a credit card, people with too many inquiries in a short amount of time are a sign that the person might be financially overextended.

If you want new credit lines, make sure you only inquire for at least one or two new credit cards each year. And before doing so, make sure you have a good standing with your previous credit cards.

If you don’t need a new credit card anytime soon, it is better not to apply for one. Shopping for credit cards is not a very good idea if you are only using your credit cards for the rewards and building your credit line.

However, having many credit cards is good, but the key is not to apply for multiple credit cards all at once.

New credit lines

Just like your recent credit card inquiries, opening new accounts can also impact your credit score. Opening too many accounts in a short period will have lenders wondering if you are overextended financially.

We get it, and it is fun getting approved for a new credit card, especially if it comes with many rewards. But make sure you only open 1 to 2 accounts each year to maintain an excellent credit score.

Only open a new credit card account when you need it, and if you do, you need to make sure you can manage your spending and paying responsibly—especially if you are doing it to build your credit score.

Ensure that you will need it, use it, and pay on time if you plan on using your new credit cards frequently. But don’t forget to pay off your old credit cards as well.

Available credit       

The amount of available credit you have between all your credit cards can also affect your credit score.

Using a big chunk of your credit card and paying the minimum amount each month is not a good look for you in the eyes of credit card companies. It indicates that you are in a financial stretch—affecting your overall credit score.

Using less than 30% of your available credit is an ideal goal. However, using your credit card and paying it off is still better than not using it at all.

So, make sure that you use your credit card up to 30% and pay it off as quickly as you can to rapidly improve your credit score.

Payments

Only paying the minimum amount off your debt may not affect your credit score. However, it means that your credit score will stay stagnant without any sign of improvement.

The only good thing that can come out of paying minimum payments is if you are paying on time monthly. But it does not make a big impact on building your credit for the good.

What is a good credit score?

According to credit card bureaus and credit card companies, the best score is around 670 to 739. This score is the average score for most credit cardholders who want credibility to apply for home or auto loans.

However, it is better if you can get your score to 740 and up to have an excellent standing and a better chance to get approved for a bigger loan amount.

Credit scores are calculated based on credit reports, so make sure you maintain and use your credit cards responsibly.

Credit scores typically range from 300 to 800, but different lenders have their own criteria when it comes to calculating your credit score.

Let’s say you want to rent an apartment; you will need a credit score of 670 and higher. The same goes for applying for a home loan if you want to buy your dream home.

A higher credit score will allow you to purchase more expensive homes or cars without paying too much upfront.

If you want to increase your credit score, some lenders will show you detailed guidelines that can affect your credit score and what you can do to improve it.

What kind of credit cards are there to choose from?

The main kinds of credit cards to choose from are rewards and low interest credit cards.

Different credit cards have different benefits. Choosing the right one will depend on how you use the card and your lifestyle, so which type is best for you?

Let’s discuss the different types of credit cards and reward systems. One is not better than the other, but one of your options will be the better choice for you based on your lifestyle. Here are the different types of credit cards you can choose from:

(Remember that you can have multiple credit cards, so it is ideal that you choose different types to enjoy more benefits.)

Rewards credit card

A rewards credit card is a credit card that will give you back rewards the more you use it.

There are different types of rewards credit cards that will either give you cashback, travel rewards, store credit for a specific store, hotel rewards, and more. Here are the different types of rewards credit cards you can choose, depending on your lifestyle.

Cashback credit card

Cashback is a fantastic form of reward you can get for using your credit cards. For every purchase you make, you can get 1% to 3% cashback, depending on where you use the credit. You can either get more cash when you use it in a specific store or for gas.

For example, you spend $2000 at a specific store—you can get $60 cashback that you can spend anywhere else.

However, these types of credit cards only give the most rewards when you use it at a specific store. If that is the case, if you see yourself spending money at one of your favourite stores, you can take advantage of the rewards.

Many cashback credit cards make a great choice if you get the most rewards on gas or other options that you spend money on regularly.

Some cashback credit cards have different rules when it comes to redeeming your points. For some, you can get the cashback only once a year or when you reach a specific amount.

However, some cash back credit cards will have annual fees even if you don’t use it. Make sure you are going to utilize the credit card regularly to avoid paying fees for nothing.

Travel credit card

Travel credit cards are the best options for people who love to travel. Some travel credit cards can be flexible with the travel benefits and rewards in one card.

However, pure travel credit cards are better if you plan on traveling a lot. It may not be as flexible as other cards in terms as rewards, but you can choose a card that gives out travel miles to one of your favourite airlines.

Travel credit cards do not have cash redemption options, so if you want to enjoy cashback and travel miles at the same time, you can get a flexible credit card or get two credit cards if you think you are responsible enough.

Flexible rewards

Flexible rewards, multipurpose, or all-around credit cards make excellent credit cards for the casual consumer. You can redeem points for travel, get cashback, and other rewards points with this type of credit card.

However, unlike specific rewards credit cards—you cannot get the most of a specific type of reward with these types of cards. But that does not mean that they are not useful for building your credit score. Plus, you can still enjoy flexible rewards, which is good.

You can redeem your points to purchase merchandise, gift cards, and some options usually have cashback as well. However, unlike pure cashback credit cards, there are specific rules to when you can redeem your cash rewards.

Hotel credit card

Hotel credit cards are highly similar to travel credit cards, meaning you use them to get and redeem rewards towards travel-related purchases.

You can get rewards if you use this credit card to book hotels, flights, cruises, vacation packages, and more. However, the rewards are not as straightforward as cashback credit cards.

Instead, you will earn travel points that can get you significant discounts on your next travel plans the more you use the card.

You can receive rewards, such as official travel perks, sign-up bonuses, airport lounge access, and comprehensive travel insurance—which are all very useful if you are a person who loves to travel alone or with your family.

Store credit card

Store credit cards can reward you with points every time you use the credit card. The points can be redeemed for special discounts off items from your favourite retailer, which is pretty great if you have a favorite store in mind.

The idea behind store credit cards is to reward the loyalty of their patrons who often shop at their store with discounts and more valuable benefits. Some excellent examples include the Canadian Tire Mastercard and the PC Financial Mastercard.

Low-interest credit cards

Low-interest credit cards are different from rewards credit cards. Standard interest rates for rewards credit cards are significantly high at 19.99% to 22.99%, which is pretty way up there.

You can avoid those interest rates and enjoy the benefits if you can pay on time, but if you just need a credit card to assist you with your finances, you can also choose a low-interest credit card.

These credit cards only charge 8.99% to 12.99%, which is significantly lower than rewards credit cards.

With lower interest rates, people who use low-interest credit cards have more breathing room without the interests adding up.

However, they do not have the same perks as rewards credit cards, but with low interest rates, there is a better chance of you paying your debt and building your credit score with this type of card.

Balance transfer credit cards

Balance transfer credit cards will allow you to consolidate your loan from other credit cards. It can be a smart move to use a balance transfer credit card to pay off high-interest credit cards and consolidate all of your debt on one account.

This method will reduce your monthly interests, and it is less confusing than paying different credit card accounts monthly.

These credit cards sometimes offer a promo interest of 0% if you can pay off your debt in a specific time frame. However, even if you cannot pay that quickly, you wouldn’t have to worry about 22.99% interest.

If you are on the brink of accumulating too much debt, using a balance transfer credit card will allow you more time to pay off your debt with lower interest rates.

Secured credit cards

Secured credit cards are people who cannot get a credit card due to the lack of a good credit score or people who are having trouble getting approval for standard credit cards in the past.

If it is the case, it would be a problem building your credit score in the future, especially if you want to make a bigger purchase, such as a car or house, through financing.

Secured cards may offer a solution to your problem. It is very easy to get approved for one, which is your start to build or rebuild your credit—especially if you filed bankruptcy before.

Secured credit cards, however, do not have the same benefits as rewards cards, and some options do not have rewards at all—just the chance of rebuilding your credit.

Student credit cards

If you are a student and want to start building your credit score early, choosing a student credit card is the best option for you. These credit cards are excellent for people who have no credit history, but are looking to establish a credit score.

Entry-level cards such as these options are easy to get with only a few requirements. They usually don’t have annual fees, but they only provide minimum perks. However, they are excellent starter pack credit cards for people who want to build their credit score.

Which of these options is the best for me?

The bottom line is choosing the best credit cards that fit for your lifestyle. If you want a credit card to build your credit while enjoying the perks, then choose a rewards credit card. However, make sure you will use it based on your ability to pay it off—especially with rewards cards.

If you need a card to build a credit score, you can choose a student credit card. They are excellent options for starters. Fortunately, there are many choices. The best credit cards in Canada are often very flexible based on what you want and what you can handle.

It is essential to choose the best credit card for you, especially if you don’t want to end up in debt. Many people just apply for the first credit card company that offers them, which is good—but it is always better to get the right information about the best credit cards in Canada first.

How do credit card companies make money?

Credit card companies make money by charging interest for any late repayments.

Let’s say you are a good payer and hardly ever pay interest. You are probably wondering how credit card companies make money. First of all, not all people are as responsible, which results in credit card companies acquiring a lot of interest.

Even with rewards credit cards, having a 19.99% to 22.99% interest rate, there are many people paying this amount. And that is how credit card companies make money despite giving out rewards points.

Credit card companies also make money from annual fees and other miscellaneous fees from a cash advance and balance transfers. The best credit cards benefit from their users as well, and they won’t just lend people money without receiving anything in return.

Which is better: cashback or rewards points?

Before applying for a credit card, it is better if you decide which type of reward will work best for you.

There isn’t a really better choice in general, because first of all, both types of credit cards give out perks that are useful. The question is, which credit card type is better for you?

Cashback credit cards are better if you want a simple type of reward without any lucrative restrictions.

However, if you travel a lot or a patron of a specific store—you can benefit more from the rewards and perks you will receive from rewards points. It will all come down to your spending habits.

Let’s say you spend a lot of money on gas weekly, and you can choose a card that will earn you more cashback when you spend money at gas stations.

However, some of the best rewards cards require higher income, so choose a card that will suit your requirements.

A good rule of thumb to follow is if you don’t earn cashback twice as much as the annual fee, you should probably stick to the no annual fee option for now.

How to choose the best credit card for you

It is very easy to apply for a credit card. However, the tricky part is choosing the best credit card for you. Here are a couple of pointers that will help you decide which credit card is the best choice for you:

Purpose

First of all, you need to consider the purpose of acquiring the best credit cards. If your main objective is to build a credit score, then you will probably do well with a low-interest credit card, to begin with.

If your purpose is to enjoy the benefits and rewards, you can choose the best rewards program that fits your wants and needs.

Limit

Some people choose the credit card with the highest limit. However, it is not necessary to aim for a high credit limit at first. Just choose something that fits your lifestyle in terms of rewards and interest rates.

Annual fee

Some cards have annual fees, and these are usually the ones with the highest rewards. Don’t be fooled by no annual fees for the first year because they will usually charge you the annual fee the next year, and you might be surprised.

Make sure you clear out the terms of the annual fee before applying so that you won’t get surprised when your next billing statement arrives.

Rewards

Another factor to consider when choosing the best credit cards is the rewards. There are many types of rewards and you can choose the best one that is most applicable to your spending habits.

You can choose to get cash back for every purchase or reward points for flights and more. Some options even offer sign-in bonus rewards that offer useable rewards just for signing up.

Miles

Rewards may come in the form of travel miles on a specific airline. These options usually have higher income requirements, but they also usually offer the most travel miles that will allow you to travel or book hotels just by signing up and getting approved.

Cashback

If you are looking for rewards in the form of cash that you can spend, you can choose a cashback credit card. Just make sure you are aware of the annual fees that come with these options.

There are some options with low interest and no annual fees, but the rewards are not that much.

Late fees

Some credit cards have higher interest rates and late fees than others. Make sure you choose an option with interest rates that you are comfortable with.

It is better to discuss these things upfront to make sure you are not getting into anything you are not ready for.

Do I need a credit card?

Most people will need to build their credit score if they want banks to trust them with expensive loans for buying a house, renting an apartment, or buying a new car.

Even if you have the cash to pay for your purchases upfront, it is ideal to have a credit card to build your credit score. Plus, you get to enjoy the rewards with no interest if you pay on time.

Who should have a credit card?

Any person who is capable of paying a credit card should have a credit card.

It will help them in the future if they build their credit score. However, not everyone is responsible, so make sure you do not spend too much credit than you can pay to avoid getting stuck in debt and filing for bankruptcy.

Pros and Cons of having a credit card

Check out the pros and cons of having a credit card below:

Pros of having a credit card

• You get to build your credit score
• You get to enjoy rewards
• You get to buy expensive items and pay for them later

Cons of having a credit card

• High interest rates
• Annual fees
• Possibility of getting into debt

Conclusion

Credit cards are essential. However, a credit card holder should be very responsible in managing their spending and limit themselves, so that they can build good credit.

Choosing one of the best credit cards in Canada is essential, especially if you want the best deals, best rewards, and best benefits. Into building good credit.