Whether you’re looking to get rid of high interest credit card debt, finance a new purchase, or carry a small balance from time to time, low interest credit cards are the best option – better than a line of credit or personal loan – and always better than a rewards credit card.
We compared all the low interest credit cards in the Canadian market. Some credit cards might offer the same or lower interest rates for a shorter-term promotional period, others for an annual fee, others with risk based APR’s, and still others with a variable interest rate that can rise at any point in time.
None beat no annual fee 5.99% fixed rates for new purchases, none beat 0% for 12 month balance transfers, and none beat 0% for 12 month cash advances deposited into your checking account – for everyone who gets approved. None.
With no annual fee and Canada’s best interest rates conveniently available in your wallet when you need them, these credit cards are must haves. None of the cards on our list come with an annual fee, so there’s no cost to carrying them as sound back-up credit cards as well.
Top Low Interest Credit Cards in Canada
Best Low Interest Credit Card in Canada For Balance Transfers
MBNA Platinum Plus® MasterCard®
If you already have credit card, store card, or line of credit debt, the MBNA Platinum Plus MasterCard will help you cut, consolidate and reduce your debt with Canada’s best standing balance transfer offer of 0% for 12 months, with no annual fee.
You can consolidate all of your store cards or credit cards to the MBNA Platinum Plus at 0% for 12 months – one payment, no interest. There is no annual fee on the card, however each transfer comes with a 1% transfer fee, which is low compared to some at 3%.
Alternatively, MBNA will also allow you to transfer cash into your bank account at 0% for 12 months as well. You can then use that 0% money for ANY purpose – same as cash, only MBNA calls it a “transfer of funds to a bank account”. It’s essentially a 0% cash advance by another name.
Best Low Interest Credit Card in Canada For Cash Advances
RBC Cash Back MasterCard
The RBC Cash Back Mastercard comes with no annual fee and has a superb 1.9% interest rate for 10 months on cash advances and balance transfers! That’s Canada’s lowest rate for cash advances, with the longest term. With no annual fee, it’s a no brainer.
Most Canadian credit card cash advances start charging interest from the moment you withdraw funds at rates of 24% or more, plus charge an initial cash advance fee of $5 or more. With the RBC Cash Back MasterCard promotional rate you get cash advances at only 1.9% for the first 10 months of the card, a massive savings.
You can also decide to use the card for balance transfers, at 1.9% for 10 months, with a 0% balance transfer fee. Most other Canadian cards charge a balance transfer fee of 1%-3% up front!
The other nice thing about this card is that if you want to use it for new purchases, you’ll get 2% on groceries and 1% on everything else. That said, we’d recommend only using the card for new purchases AFTER you’ve paid down your cash advance loan.
Best Low Interest Fixed Rate Credit Card In Canada
American Express EssentialTM Credit Card
This new offer from American Express is the low interest card you want to make new purchases or take out a cash advance with. With no annual fee and an 8.99% fixed interest rate on new purchases & cash advances, this card stands out. It’s simple, clean and transparent, the 8.99% rate is what you see and what you get upon approval, regardless of your credit.
No other cards from the big banks offer such a low fixed rate, and it comes with no annual fee. Not RBC, TD, Scotia, CIBC or BMO. Most have low rate cards at 11.99% for purchases and cash advances, with a $29 fee. Many have cards with cash advance rates as high as 24.99%!
With no annual fee, you can keep the American Express Essential credit card in your wallet as a back-up to your rewards card, cost free. It’s great if you need to finance a new purchase, access cash or if you want to transfer a balance without having to worry about promotional periods.
The 8.99% interest rate, is the lowest fixed rate in the country. Because it’s not a variable rate, there’s no risk it will increase on you. Also, if you get approved for the card, you’ll get the advertised 8.99% rate – there’s no “as low as” trickery, where you apply for one rate, but end up with a higher one.
When you apply, you can also get a 1.99% balance transfer rate for the first 6 months, with a 0% balance transfer fee. Upon expiry of the 6 month promo rate your APR will go to and stay at 8.99% for your transferred balances.
Best Low Interest Credit Card in Canada For Purchases
The MBNA TrueLine Credit Card
The MBNA TrueLine credit card, issued by TD, is likely the best low interest credit card in Canada. No credit cards offer the ability to get a lower fixed rate interest than 5.99%, with no annual fee. It’s transparent, simple and free. Your rate will be applied to all purchases, balance transfers and access checks!
You’ll get a rate between 5.99% & 14.99% depending on the strength of your credit – but you’ll see your rate before you actually apply – without any impact on your credit. Just fill out the quick form, MBNA will tell you your rate, and then you decide whether you want to continue with the application – it takes two minutes and does not count as a credit inquiry to get your rate.
We’ve reviewed low fixed interest rate offers from RBC, BMO, Scotia, CIBC, TD, VanCity, National Bank and none beat MBNA Trueline’s as low as 5.99% fixed annual interest rate with no annual fee, making it our number one ranked fixed low interest credit card in Canada right now. Great no fee, low interest card to keep in your wallet in case you ever have to access a low rate. It’s like having a 5.99% unsecured credit line at your disposal.
Summary of the Best Low Interest Credit Cards in Canada 2017
|Credit Card||Interest Rate||Annual Fee||Category|
|MBNA Platinum Plus MasterCard||0% for 12 months||$0||Balance & Deposit Transfers|
|RBC Cash Back MasterCard||1.9% for 10 months||$0||Cash Advances & Balance Transfers|
|American Express Essential Card||8.99%||$0||Fixed Interest Rate & Cash Advances|
|MBNA Trueline||5.99%-14.99%||$0||Interest on New Purchases|
If you do carry a balance, it makes no sense to chase rewards. You’ll be spending close to 20% a year in interest, to save maybe 2% in rewards. Even if you carry the balance for 2 statement periods, it will cost you over 3.5% in compounded interest. The math doesn’t work. You’re best option, if you know you occasionally don’t pay down your entire credit card bill, is to get yourself a no fee, low interest credit card. Just keep it in your wallet for those rainy days, unexpected expenses or need to haves – it costs you nothing, but will save you tons.
For whatever reason, most banks don’t offer fixed rates as low as 5.99% to 9.99% with no annual fee. RBC, BMO, CIBC and Scotia offer low interest rate credit cards with rates as low as 11.99%, but they come with $20-$29 annual fees. RBC and TD have low variable rate credit cards of prime plus 4.99% to 8.99% or 1.25% to 12.75%. You don’t know if you’re going to get a rate of 7.69% or 15.45% before you apply. The problem is, even if you’re unhappy with the rate you get, if you were approved, you still have to pay the annual fee!
With many of the new personal loans on the marketplace, while they advertise rates as low as 5.9%, they average more in the 12% range. Furthermore, they require you to send in proof of income and identity verification. Perhaps it’s better than going into the branch to apply for a line of credit, but it’s certainly not easier than applying for a credit card online.
That’s why we love the new American Express Essential credit card. There’s no annual fee, making it free to have whether you need it right away or not, and it has an 8.99% fixed rate. You know what you’re getting before you apply, and it will never change.
MBNA’s 0% for 12 month rate is also unparalleled in the Canadian marketplace. Whether you’re looking to transfer your high interest credit card debt or you’re looking to access cash at 0%, no other issuers currently offer the same published rate.
Just remember, don’t make any new purchases on your balance transfer card – use it for balance transfers exclusively. You’ll be paying 22% interest on new purchases, and when you try to pay the higher interest balance down, only a portion of your repayment will go towards your new purchase. The other portion will go towards your existing balance – you don’t choose. As a result, you’re new higher interest balance will stick until your lower interest balance is completely paid down.
So why use a credit line or personal loan to pay off credit card debt, when you can access 0% rates? It just doesn’t make sense. We continue to recommend balance transfers as the optimal strategy to pay off high interest credit cards, store cards or fixed payment loans you may have. No other products offer interest rates as low.
Brought to you by GreedyRates.ca – Compare The Best Credit Cards In Canada