Best credit card for bad credit
Capital One Gold Mastercard with low interest
The Capital One Low Rate Gold Mastercard is a solid choice for those with a low credit score. For a fee of $79 per year, cardholders get an eyebrow-raising competitive rate of 14.9% and access to benefits including price protection, travel benefits and insurance. And if you don’t qualify for the unsecured Capital One Low Rate Gold, Capital One will still approve you for its alternative secured product, the Capital One Guaranteed Secured Mastercard. This makes for a good fail-safe and helps people access a credit card with a $75 security deposit and a $59 annual fee.
Annual Fee: $79 Interest: 14.9% on purchases and balance transfer; 19.8% on Cash Advances Personal Income Required: $0 Other Benefits: Price Protection (difference up to $100 per item, up to a maximum of $500 per calendar year); common carrier travel accident insurance; luggage and rental car insurance
Renewed secure visa*
The Refresh Secured Visa is in line with the other cards on this list in terms of interest rate (19.99%), but it deserves its place here for two different reasons. First, you are guaranteed to be approved without a credit check, meaning you can avoid a drop in your credit score. Second, the Financial Intelligence Training – a free online educational program – gives people with bad credit access to tools to improve their financial picture. (Who wouldn’t benefit from learning more about finance?) As an added bonus, you can earn $100 every time you refer someone to sign up for the card — which doesn’t get you out of debt on its own, but it does. is a nice incentive.
Annual Fee: $12.95 plus a $3 monthly fee, for a total of $48.99 per year Interest Rate: 17.99% on purchases Min. Deposit: $200
More information about the Refresh Secured Visa*
Best credit card for students with bad credit
BMO Air Miles Mastercard for Students
The BMO Air Miles Mastercard for Students helps young people get a credit card and earn Air Miles that can be redeemed for cash, merchandise or travel. The application process is not onerous, so if you are a Canadian citizen who has come of age and you are enrolled in an accredited post-secondary school, you will most likely qualify (you must have some sort of income, whether it be loans, scholarships, or even child benefit). And once you’re approved, you’ll have access to one of the country’s most popular rewards programs. You earn 1 Air Mile for every $25 you spend and can triple this by shopping with participating partners. Show your Air Miles card and double those points again. There are plenty of ways to make money, including the new member welcome bonus of up to 800 Air Miles, which is worth $80 in cash. The BMO Air Miles Mastercard also comes with financial insights to help you keep your budget under control.
• Annual Fee: $0
•Interest: 19.99% for purchases
Best prepaid credit card for bad credit
Koho Premium Prepaid Visa*
The KOHO Premium Prepaid Visa is designed to keep you on track with all your finances as it offers free financial coaching and useful budgeting tools. It also makes it easier to separate your pocket money as you just load your card with the amount you want to spend and you’re done. It still offers rewards comparable to regular credit cards, such as 2% cash back on three spending categories of your choice, meaning you can earn 2% back on your groceries, transportation or dining out. While this card won’t help you build your credit score, it does give you the benefits and convenience of using a credit card without the risk of overspending. And if you do want to recover your score, you can use their credit building feature.
• Annual Fee: $9 per month ($84 per year)
•Interest rate: None
•Min. Deposit: none
More information about the Koho Premium Prepaid Visa*
Best credit card for newcomers to Canada
Scotia Momentum No Fee Visa
One of the challenges that many newcomers to Canada face is that they have no credit standing in this country. Much like having a bad credit score, having none can really hinder a person’s ability to apply for a loan, mortgage, or establish a relationship with their bank. The Scotia Momentum No-Fee Visa helps people build their credit with a free card that earns cash back on everyday purchases. Get 1% back on eligible gas, grocery and pharmacy purchases, and on recurring payments. Everything you spend elsewhere earns 0.5%. The welcome bonus gives new members a cashback advantage with 5% cashback on all purchases during the first 3 months (up to $2,000 in total purchases). And if you have debt on a higher-interest card, consider transferring it to the Scotia Momentum No-Fee Visa. The introductory interest rate of 2.99% for the first 6 months may just be the stepping stone you need.
• Annual Fee: $0
•Interest: 19.99% for purchases
•Min. Deposit: none
Getting Approved for a Bad Credit Card
Having a credit card and using it responsibly are pretty powerful ways to recover your credit history and credit score. But you will have to be strategic with the card you choose to apply for. Expect to qualify for cards with fewer benefits than the popular credit cards available, as well as less favorable terms or even cards that require a deposit. Once you start establishing your credit, you can upgrade to a card with better rewards and conditions.
There are several ways to get a credit card if you have bad credit.
Secure Cards mitigating the risk of people with poor credit standing by providing collateral, usually in the form of a cash deposit that can be used to cover unpaid debts. There are many options (including the best bad debt credit cards), so you should be able to easily find one that works for you.
Unsecured Cards require no collateral, so they may have a slightly higher threshold for qualification. Those with a reasonable rating may be able to get one. Aside from the fact that no deposit is required, these cards sometimes have some benefits such as points or cash back.
prepaid cards are what they sound like: credit cards that you load with money before you spend money, instead of paying off your debt monthly. These cards are very useful for those who struggle to stick to a budget, and because they need to be preloaded, you won’t be able to spend too much.
No frills cards are essentially stripped-down cards specially tailored for those with bad credit. Many major banks offer these as part of their credit card range. These may not offer perks and benefits, but they can help you improve your financial picture.
Smaller Financial Institutions often have special offers or unique products to attract new customers. If a big five bank won’t lend you money, try a lesser-known but trusted (and insured!) lender.
fintech, short for “financial technology,” is a broad term for any type of technology used in place of traditional financial services — and it’s actually a fast-growing industry in Canada. Fintechs offer a wide variety of products and services, including secured credit cards, loans, credit building tools and budgeting tools. And many are designed specifically for those with poor credit histories and scores.
Search for credit cards, personal loans. Once you’ve researched which cards you qualify for…wait a minute. Every application you submit affects your credit score, so you’ll want to think carefully about when and how to apply. Compare your options, pay close attention to fees, interest rates, repayment terms and available benefits. Once you’ve made your priority list, it’s time to submit your first application. And be completely honest with your application. Wait for the answer before going through your list. Most creditors have very fast turnaround times, so it’s not worth submitting multiple entries just to compromise your credit score.
What is a Bad Credit Score in Canada?
Your credit score is expressed as a number, usually between 300 and 900, that indicates how creditworthy you are. Meaning: How much risk you could pose to lenders or creditors of failing to repay money. Your score is affected by all sorts of variables, including the amount of debt you bear, whether you repay in full and on time, and even how long your credit history is. The higher your credit score, the better.
This post Canada’s best credit cards for people with bad credit 2022
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