The Best Credit Cards for Canadians with Average Credit Scores
Not everyone has a perfect financial record: and that’s perfectly fine. Even with less than perfect credit, you have a plethora of options available thanks to a flexible and fair banking system. Credit cards for fair credit, or those with average creditworthiness, represent a step up in hierarchy. Credit-wise, Canadians who have reached the middle of the pack can access benefits like cash back and lower interest rates, even with some discrepancies or negative marks on their credit report.
|Credit Card||Card Type||Card Features||Required Credit Score||Min Income||Apply Online|
|The New SimplyCash Card from American Express||Cash Back||5% cash back bonus for first 6 months||poor_fair||$0||Get This Offer|
|BMO Preferred Rate Mastercard||Low Interest||A low interest rate of 11.9% on purchases and cash advances||fair_good||$15000||Get This Offer|
|The MBNA Rewards Mastercard||Cash Back||1% cash back on all purchases with no limits||poor_fair||$15000||Get This Offer|
What Is Fair or Average Credit?
Given a scale between 300 and 900, an ‘average’ credit score might range between 500 to 700. An often-cited ‘magic number’ for credit scores in Canada is 650. Some banks use this as a threshold for whether or not applicants are eligible to be approved for products like unsecured credit cards, while others consider applicants with credit scores on the lower end of the average range.
Individuals who have undergone bankruptcy or a consumer proposal will work hard, using secured credit cards and diligent saving, to reach this level. Someone who typically has good credit might temporarily dip into this level if they are delinquent on bills, make a series of late payments, or run their balance up to the limit of their available credit.
With the wide range of factors affecting credit scores, keeping it in great shape is a challenge. To find your credit score, navigate to TransUnion, Experian, or Equifax and sign up for their free reports. If you have reviewed your score, but find it does not meet the minimum to be considered “fair”, check out the articles here and here to learn how to improve it.
What Can I Do with Fair Credit?
With fair credit, you gain access to a wider range of financial tools that grant more freedom to spend and save. It can take hard work to reach this threshold, and if this is you – congratulations! Credit is an indicator of your personal financial diligence and a fair score gives you the option to take on more responsibility. Whereas those with poor credit may experience more limited access to financing, fair credit can be used to take out a bank loan, open a line of credit, or benefit from cards with more favorable terms.
Recommended Cards for People with Fair Credit
#1 The SimplyCash Card from American Express
The Amex SimplyCash card boasts features unheard of for lower-tier credit cards, such as cash back and a lucrative introductory bonus. It also helps those with existing balances transfer the debt to gain shelter from high rates.
- 5% cash back bonus for first 6 months
- 1.25% cash back on all purchases after the promo period ends
- No annual fee
- Balance transfer rate of 1.99% for first 6 months
#2 The BMO Preferred Rate Mastercard
Even if your credit score is not quite perfect you can still get an excellent rate on purchases and balance transfers with the BMO Preferred Rate Mastercard. You do need a credit score of at least 650 to apply, but the low interest rate is extremely competitive for a card that is available to those with ‘only’ average credit. The card’s key features are:
- $20 annual fee
- 11.9% interest rate on purchases and cash advances
- 3.99% introductory interest rate on balance transfers for first 9 months
- 11.9% interest rate on balance transfers after 9 months
- Extended warranty and purchase protection on eligible purchases
#3 The MBNA Rewards Mastercard
This card allows users to be extremely flexible in how they earn and spend their cash back. Its key features include:
- 1% cash back on all purchases with no limits
- $50 welcome bonus after initial purchase
- Transfer cash back instantly
- Redeem for gifts or travel
- Car rental insurance and purchase protection
#4 The MBNA Rewards World Elite Mastercard
The Rewards World Elite Mastercard, courtesy of MBNA, offers a solid set of perks for those with the high end of a fair/average credit score. Canadians with a credit score over 670 should have no issue being approved and can appreciate the ability to earn MBNA Rewards points at a rate of 2 for every $1 spent. After their first eligible purchase, MBNA sends new cardholders a bonus of 10,000 points, which never expire and can be redeemed for cash back, travel, merchandise, gift cards, and more. For an annual fee of just $89, it represents one of the best offers available for those individuals that don’t have stellar credit (yet).
- Earn 2 points for every $1 spent
- 10,000-point introductory bonus
- Redeem points on cash back, travel, merchandise and more
- $89 annual fee
#5 The BMO Air Miles Mastercard
Just because your credit score isn’t the highest, doesn’t mean you can’t enjoy the vast travel benefits of the Air Miles program. The BMO Air Miles Mastercard offers new cardholders 500 bonus Air Miles. In the meantime, they’ll enjoy the ability to collect 1 Air Mile for every $20 spent. At any of the Air Miles sponsored locations across Canada, the rate doubles. With so many ways to accelerate earnings and no annual fee, it’s ideal for many cardholders—not just those with fair credit. A balance transfer deal charging just 1.99% interest for 9 months is the cherry on top.
- 500-Mile bonus gift
- Collect 1 Air Mile for every $20 spent
- $0 annual fee
- 1.99% interest for 9 months on balance transfers
#6 The Best Western Rewards Mastercard
Hotels represent some of the largest expenses incurred on any vacation or business trip, so it helps to carry a card that reduces the bite they take out of your wallet. The Best Western Rewards card is one of these cards, earning 1 point for every $1 spent in eligible purchases, 5 points for every $1 spent on Best Western properties worldwide, and a generous 20,000 points just for making an initial purchase with the card. That’s already enough for a free night’s stay. If that weren’t enough, this card automatically bestows Gold Elite Status, and can help new members shelter their transferred balances from interest (at 1.99% for 10 months). Add in some vital travel insurance perks and a $0 annual fee and the card is made even sweeter.
- Earn 5 points for every $1 spent at Best Western
- Receive 1 point for every $1 spent elsewhere
- Get 20,000 bonus points for an initial purchase
- Obtain Gold Elite Status immediately
- Solid travel insurance benefits
#7 The Scotiabank Value Visa
The aptly named Scotiabank Value Visa card isn’t just for those in the upper echelons of creditworthiness. Scotia’s card grants a competitive 11.99% purchase interest rate to those with fair credit and charges a low $29 annual fee as well. With the option to transfer your balance and pay just 0.99% on it for 6 months, there are few cards that offer such a comprehensive toolkit for stemming the nonstop flow of interest. Additionally, cardholders will be eligible to receive a discount of up to 20.00% when renting vehicles at Avis branches in Canada.
- 0.99% rate for 6 months on balance transfers
- Competitive 11.99% interest rate on purchases
- Low $29 annual fee
- Receive up to 20.00% off at Avis
#8 The American Express Essential Credit Card
Like the Scotiabank Value Visa above, Amex’s take on the low-rate credit card reduces the purchase interest rate to just 8.99%. It also provides new cardholders with the ability to transfer their balances and pay 1.99% on them for 6 months. Accordingly, the card is great for those who might carry a balance month to month, and it doesn’t even charge an annual fee. The card also comes with the standard Amex perks, including new purchase protection and extended warranties, as well as $100,000 worth of travel accident coverage.
- Purchase interest rate of just 8.99%
- Balance transfers incur 1.99% interest for 6 months
- $0 annual fee
- Purchase protection and extended warranties
- Travel accident insurance
#9 The MBNA Smart CashCredit Card
While those with no or poor credit often take advantage of secured cards, the MBNA Smart Cash card is available to cardholders who’ve proven their creditworthiness. It provides a system for earning rewards from gas and groceries, and also offers a range of insurance features, all for no annual fee.
- 5% on gas and groceries for the first 6 months
- 2% thereafter
- 1% on all other purchases
- No annual fee
- Car rental, travel interruption, and purchase protection insurance
A Fair Credit Score Is an Important Step Toward Financial Security
Credit cards for fair credit scores offer far better terms than cards available to less creditworthy individuals. Those who are just starting out their credit journey in Canada, like immigrants and young adults, might be wise to make reaching this credit score range one of their personal financial goals.
Keep an eye out for our upcoming article on the best cards for “good” credit, which brings a slew of lucrative deals for those with a score between 600 and 800.