What is Canada's Best Low Interest Credit Card? Our Picks for 2024
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Discover the methodologyCredit cards have become a part of our everyday life. They are an essential tool for building credit and a convenient way for paying for essential goods and services. For some, credit cards can become a troublesome source of debt.
How can you utilize your credit card while limiting debt?
If you can't always pay your credit card off on time consider a low-interest-rate credit card. They make money cheaper to borrow than other types of cards. Here we'll show you the many great choices for credit cards with low-interest rates in Canada and help you pick the right one for you.
What is Canada's best low-interest credit card?
More on our selection of the best credit cards with low interest in Canada:
What’s the best BMO low-interest credit card?
For the BMO credit card with a low-interest rate, we like the BMO Preferred Rate Mastercard. This card has a low annual fee of $20 and an opening offer of a 0.99% introductory interest rate on balance transfers for 9 months with a 2% transfer fee. Sign up with this offer to waive the $20 annual fee. This card has interest rates of 12.99% on purchases, 15.99% on cash advances and 12.99% on balance transfers. It also has a $15,000 annual requirement. We like that this card is accepted at Costco. It is a great choice if you wish to start paying off existing credit card debt with a balance transfer.
What’s the best CIBC low-interest credit card?
Our CIBC low-interest rate credit card choice is the CIBC Select Visa Card. This card has an annual fee of $29 and is a similar offer to BMO’s card. it is a top contender for the best balance transfer card with an introductory offer of 0% interest for up to 10 months on balance transfers for a 1% transfer fee. It also gives 10 cents off per litre on gas at select gas stations when linked with a Journie Rewards card. This card enjoys low interest rates of 13.9% on purchases, 13.9% on cash advances and13.9% on balance transfers. This is a nice option for individuals looking to make a balance transfer.
What’s the best Desjardins low-interest credit card?
For Desjardins, we have another low-interest travel credit card in the Desjardins Flexi Visa Card. It has no annual fee and offers travel insurance covering travel medical insurance, trip cancellation insurance, trip interruption insurance, delayed baggage insurance and lost or stolen baggage insurance. With interest rates of 10.9% on purchases and 10.9% on cash advances, this card has the lowest overall interest rates, after offers, of any card on our list. Unfortunately, this card does not offer balance transfers.
What’s the best MBNA low-interest credit card?
The MBNA True Line Mastercard credit card is a solid choice. This card has no annual fee and a 0% promotional annual interest rate for the first 12 months on balance transfers making it great for transferring existing debt from a higher-interest credit card. This card has interest rates of 12.99% on purchases and 12.99% on balance transfers, but watch out for the 24.99% rate on cash advances. Unfortunately, this card is not available to Quebec residents.
What’s the best National Bank of Canada low-interest credit card?
NBC offers the NBC Syncro Mastercard, a card with the lowest purchase rate of any card on our list. With an 8.9% interest rate on purchases and a 12.9% interest rate on cash advances and balance transfers, this card is perfect for saving money on interest. The 8.9% interest on purchases is the lowest on this list. It has a $35 annual fee and also offers purchase protection and an extended warranty on qualifying purchases. This card is a solid choice for people using a credit card to pay for large purchases that will need to be paid off over time.
What’s the best Scotiabank low-interest credit card?
For our choice of Scotiabank low-interest rate credit card, we have the Scotiabank Value Visa Card. This card has an annual fee of $29 and a 0.00% introductory interest rate on cash advances for the first 6 months. There is no annual fee for the first year. This intro offer makes it the best cash advance card on the list, perfect for someone needing to borrow cash immediately and pay it off over time. This card has low overall interest rates of 12.99% on purchases, 12.99% on cash advances and 12.99% on balance transfers. It also has a $12,000 annual requirement.
What’s the best Capital One low-interest credit card?
We also like the Capital One Low Rate Guaranteed Mastercard. This card has a $79 annual fee and is one of the best low-interest travel credit cards. While it gives no miles or points it provides travel insurance including travel accidental insurance, delayed baggage insurance and auto rental insurance. It also gives a one-year extended warranty on purchases and 90-day purchase protection. With interest rates of 14.9% on purchases, 21.9% on cash advances and 14.9% on balance transfers it is one of the higher interest rates on our list, but the trade-off may be worthwhile for travellers.
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What is a low-interest-rate credit card?
A low-interest-rate credit card is a credit card that focuses on providing a lower APR so that your credit card debt grows slower. This helps you to pay off your credit card purchases rather than just paying off the interest month after month.
Many of these cards come with an introductory off that is even lower than the standard low-interest rate. Some of the best low-credit cards with low-interest rates offer balance transfers so that you can move credit card debt from a high-interest credit card to a low-interest credit card.
Keep in mind
Let's take a look at an example. Todd in Vancouver has a credit card with a 20.99% interest rate on purchases. He charges $5,000 to it and can reimburse $250 per month. With his current card, it will take him 25 months to pay it back. He'll pay $1087 in interest!
Betty in Halifax owes the same $5,000 on her credit card but enjoys an $8.9% interest rate. She also can afford to pay back $250 per month, but she'll pay off the debt fast and owe less interest. How much less? $696 less and she'll be done 3 months earlier.
| Type of card | Low-interest | Average interest |
|---|---|---|
| Interest Rate | 8.9% | 20.99% |
| Monthly Payment | $250 | $250 |
| Months to Pay Off | 22 | 25 |
| Total Interest Paid | $391 | $1,087 |
What’s the lowest credit card interest rate?
The lowest rate for purchases on our list is 8.9% for the NBC Syncro Mastercard, but balance transfers and cash advances come in at 12.9%. Alternatively, the Desjardins Flexi Visa Card with only a 10.9% APR on purchases and on cash advances.
With intro offers that number can be even lower. MBNA True Line Mastercard credit card offers a 0% interest rate for the first 12 months on balance transfers and Scotiabank Value Visa Card offers no interest on cash advances for the first 6 months.
In general, a low-interest rate credit card is between 12% and 14%. Make sure to look at the card details and opening offers before picking your card because there’s more to picking the right card than just the interest rate. Rewards or better fees can be more valuable than saving 1 or 2% interest.
Good to know
Remember, if you pay your balance off on time, the interest rate doesn’t really matter. If you can you should pay off your card in full every month whenever you’re able.
Why should I pick a low-interest credit card?
You should pick a low-interest credit card if you are struggling to quickly pay off your credit cards, find yourself only paying off interest or know that you will be accruing debt with upcoming large purchases. High-interest credit cards can put you in a position where you are paying off interest rather than the debt this creates a cycle where your debt never actually goes away.
You can save money by switching to a low-interest credit card. This allows you to pay the same amount as before but instead of just covering interest it will also help pay off debt. Similarly, if you know you are about to make several large purchases that you can’t immediately pay off, getting a low-interest credit card will save you money while you pay off the large purchases.
Here is another example, Jessica owes $5,000 on a high-interest rewards credit card currently charging 20% interest per year. She’s paying $400 a month towards the balance but can’t afford to pay more. If she had used the Desjardins Flexi Visa Card to make those purchases her interest rate would only be 10.9%. Let’s see how that change affects how long until she’s paid off the card:
| Type of Card | Rewards Card | Desjardins Flexi Visa Card |
|---|---|---|
| Interest Rate | 20% | 10.9% |
| Months to Pay Off Debt | 15 | 14 |
| Total Interest Paid | $653.35 | $331.42 |
By using a low-interest credit card Jessica would nearly half her interest payments from $653.35 to $331.42. While the benefits from rewards cards can be tempting and may be the right choice for people able to pay off their credit cards consistently, interest payments add up fast. They can cost you in the long run.
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What are the advantages of low-interest credit cards?
We’ve gone over why you should pick a low-interest credit card but let's look at the advantages of low-interest credit cards:
- The biggest advantage is saving money on interest payments. By lowering your interest you immediately save money over time as you pay off your debt. This can be the difference between taking months instead of years to pay off the same amount of debt.
- Low-interest credit cards often have low or no annual fees too. Some cards, notably from American Express, may have annual fees in the hundreds of dollars.
- These credit cards can also be used to pay off debt from other cards with a balance transfer. If you have a credit card with a 25% interest rate you can save lots of money by transferring that debt to a low-interest card with a 12% interest rate.
- Low-interest rates and balance transfers are an opportunity to get caught up on existing debt.
What are the disadvantages of low-interest credit cards?
While low-interest credit cards are a great tool for helping manage your debt, they come with downsides. For example:
- Low-interest credit cards lack some of the rewards of more expensive credit cards. Low-interest credits provide you with low annual costs and low interest but give less back in rewards such as cash back, flight miles, rewards points and other perks.
- While lower interest rates can save you money balance transfers have fees. Make sure that you aren’t paying more in balance transfers than if you paid off your credit card debt immediately on your current card.
Low-interest credit cards have these disadvantages because they are already providing you with the opportunity to pay off your current debt. When you do pay off that debt and stabilize your finances that’s when it's a good time to look into those rewards credit cards that offer points, miles and other benefits.
How can you save on credit card interest?
Saving money by lowering your credit interest should be the ultimate goal of getting a low-interest credit card. If you were already paying off your high-interest amount then just continuing to pay that same amount will start to cover your interest plus a portion of your debt.
Let’s look at an example:
For example
Dylan is a construction worker based in Vancouver. He owes $10,000 and has an APR of 25%. If he pays only the minimum and doesn’t use his card to make new purchases, his interest payments come to $208 monthly. Over a year, that’s $2,500! He could save big by lowering his interest rate to 12.99% with the MBNA True Line Mastercard credit card. That’s not even the best part. This card has an intro offer of 12 months with no interest on balance transfers.
If Dylan pays the same amount on the credit card in that first year he will lower his debt to $7,500 instead of paying just the interest. After that, his interest will be half of what it previously was. Low-interest credit cards can help you pay off your debt faster and potentially save you thousands in interest
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