Top Credit Cards for Bad Credit In Canada - Unsecured & Secured Credit Card Options
For people with impaired or no credit history, perhaps there’s no quicker or more effective way of re-establishing their credit than with a credit card. Luckily, even if you’re currently in bankruptcy, consumer proposal or emerging from insolvency, there are a growing number of credit cards for bad credit in Canada.
Canadians can now choose from a host of different types of credit cards to help them establish, re-establish or repair their credit histories and credit scores. Whether you’re looking for an unsecured, guaranteed approval, or secured credit card, there’s an option that’s best for you.
With the credit cards below, you can enjoy all the benefits of having a credit card, even if you have no credit history, or have had credit problems in the past. These credit cards for bad credit will help you rebuild or establish a strong credit rating, while giving you the convenience and security of a credit card – make purchases online or over the phone and book travel reservations easily and securely.
Top No Annual Fee Secured Credit Card For Bad Credit In Canada:
A no annual fee secured credit card requires a security deposit but does not charge an annual fee. Your credit limit is then set at the amount of the deposit. You can put down as little as $500, or as much as $25,000, depending on the card. If you decide to cancel your secured card, you can just pay off your outstanding balance, and you’ll get your security deposit back. Because the card is secured, almost everybody is approved. The only downside for some, is that it does require a bank account.
Why It’s a Winner: The Home Trust Secured Visa, is a great option for those not approved for an unsecured credit card, looking to re-build or establish credit through a secured credit card but don’t want to pay an annual fee.
While it does require a minimum deposit of $500, you are guaranteed to get approved. Once approved, you can start to use it like any other credit card, and Home Trust will report your payments to both Equifax and TransUnion, helping you re-establish your credit.
It does come with a 19.99% interest rate, (but you shouldn’t be carrying a balance on a secured credit card anyways). Also, if you have any large purchases you need to make on the card, you can deposit as much as $10,000, which should give you all the flexibility to have a large enough credit line for big ticket purchases.
Top Low Interest Secured Credit Card For Bad Credit In Canada:
IMPORTANT NOTICE! Peoples Trust has temporarily suspended issuing new credit cards. This is the message showing on their website:
“Peoples Card Services continually analyzes and refines its products to best meet the needs of our clients. While we work to reposition a number of existingand new products, we have decided to stop accepting new applications for the Peoples Trust Secured Card product effective July 31st, 2017.
The Peoples Trust Secured Card program remains unchanged for existing cardholders who will continue to enjoy the same program benefits and use their card anywhere MasterCard is accepted.”
Even though this is a secured credit card, some people still may carry a balance from time to time, and if you do, a low interest option is critical to keeping down your borrowing costs.
Why It’s a Winner: The People’s Trust secured credit card offers a low interest rate of 12.99% on balances, two percentage lower than the next best secured credit card.
What also makes this card unique among it’s peers, is that you can create a security deposit as low as $500 to as high as $25,000. That’s the highest deposit allowed in Canada, to our knowledge, giving you the baility to create a $25,000 line of credit and all the flexibility to spend on big ticket items to meet your individual needs.
This card is ideal if you have had credit problems and want to rebuild your credit rating, have no credit history and want to establish a good credit rating or are a discharged bankrupt.
Just be careful with the low interest rate. If you intend on carrying a balance, you’re probably better off not getting the card and using the money that you would have used for your deposit to pay for your service – interest free.
You will need a bank account to be able to apply for this secured credit card.
Top Unsecured Credit Card For Bad Credit In Canada:
The Affirm MasterCard® Credit Card
IMPORTANT NOTICE! Affirm Financial Services has temporarily suspended issuing new credit cards. This is the message showing on their website:
“As we continue to find progressive ways to support the credit needs of Canadians, Affirm Financial Services has temporarily suspended issuing new credit cards, loans and all credit limit increases.
We are working hard to ensure that we bring you the credit products you need as soon as we can. We sincerely apologize for any inconvenience this may cause you.
Existing Affirm Mastercard customers may continue to use the card in accordance with the terms of the cardholder agreement.”
An unsecured credit card for bad credit is a card designed for those with impaired credit. However, because it is unsecured, you won’t have to put any deposit or security against the card, and you’re not required to have a bank account. It’s a great alternative if you’ve been turned down for a credit card by the banks.
The advantages of an unsecured credit card are: 1. You get a true line of credit, without having to give a security deposit. 2. Your credit history gets reported to the credit bureaus. 3. It allows you to build or re-build your credit, even if you had difficulties in the past or present – even consumer proposal or bankruptcy.
Why It’s a Winner: The Affirm MasterCard is our top ranked credit card for bad credit, because it stands alone in Canada as the only unsecured credit card for bad credit with absolutely no security deposit required. It’s a great opportunity for those who have declared bankruptcy or have been or are in consumer proposal, offering unsecured credit lines as high as $3,000.
It comes with an interest rate of 29.99% for homeowners and 34.99% for non-homeowners, comparable to a store credit card, and much lower than a pay day loan. But remember, you shouldn’t be carrying a balance anyways. The idea here is for you to use good credit habits and pay down your credit card bill every month, not just the minimum payment, on time – use automatic payments if you can’t trust yourself. Pay down your balance every month and the interest rate is irrelevant.
It does come with an annual fee of $84 per year, charged at $7 per month. Reasonable for the risk the bank is taking, and when you consider many secured credit cards also come with an annual fee. Once you’ve re-established your credit, you can apply for a no fee credit card, and avoid the annual fee altogether.
Affirm reports to both credit bureaus, Equifax and TransUnion, with every payment. Not all lenders do this. As a result, the Affirm MasterCard will help you build a positive track record of payment performance, and improve your credit history and score as quickly as possible.
READ THIS TO GET APPROVED: To help you get approved for this card, if you’ve declared bankruptcy or been in consumer proposal you should have a FICO greater than 500. If not, your FICO should be greater than 600. Your annual income should be at least $10,000. You should not have a payday loan inquiry. Nor should you have a major derogatory like a delinquency, or judgement in the last 6 months.
Summary of Best Bad Credit, Credit Cards In Canada
|Credit Card||Type||Target Audience||Fee|
|Home Trust Secured Visa||Secured||No credit history, Rebuilding credit||$0|
|Peoples Trust Secured Credit Card||Secured||No credit history, Rebuilding credit||$69.6|
|Affirm MasterCard Credit Card|
|Unsecured||Rebuilding credit, Bankrupt, Consumer Proposal||$0|
Strategies To Get Credit Cards for Bad Credit
Get An Unsecured Credit Card If Possible
We really recommend that you first try to get approved for an unsecured card. The application process is simpler, you won’t have the risk of losing your security deposit and you won’t tie up your money in a security deposit either.
Don’t apply for every credit card under the sun – doing so will further lower your credit score. If you’re in bankruptcy, consumer proposal, just emerged or even on a debt repayment plan, an unsecured card specifically for bad credit might be the best alternative you have. If you’ve already been declined by the banks, it may be the only chance you have for an unsecured credit card.
Get A Secured Credit Card But Don’t Pay A Fee, And Don’t Keep It Forever
If you can’t qualify for an unsecured credit card for bad credit, and you want to get on the path of re-building your credit – and have access to the convenience of MasterCard and Visa, then a secured card might make sense. We would recommend getting one without an annual fee – why pay a fee when you don’t have to?
Secondly, once you re-established your credit to the point that you qualify for an unsecured card, get one, and then cancel your secured credit card.
And remember, make all of your payments on time. In fact, you should set-up all your credit cards for pre-authorized payments, so you’re never late – The Golden Rule of responsible credit card usage!