Credit Cards

Best Credit Cards for Bad Credit in Canada

credit cards for bad credit

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Do you have a low credit score but still need a credit card to help you manage your finances? The good news is that you still have plenty of options depending on what you need. These are the best credit cards for bad credit.

In case you didn’t know, every Canadian has a credit score assigned to them that falls between 300 and 900. The higher your number, the better your credit score. Having a good credit score is important not only to get a credit card but also if you’ll want to get a loan in the future. Generally speaking, if your credit score is 660 or above, you won’t have any issues getting approved for more credit. However, once your credit score falls below 650, then that’s where you may start getting denied. Keep in mind that your credit score can affect anything from financing a vehicle to renting an apartment, so it’s in your best interest to build a credit history and increase your credit score by using one of the best credit cards for bad credit in Canada.

Summary of Canada’s Best Credit Cards for Bad Credit

Credit CardBest ForTypeCard FeaturesAnnual Fee
Plastk Secured Credit CardEarning RewardsSecured• Improve credit score
• Earn 1 point for every $1 you charge to the card.
• 17.99% APR
$120 ($48/annual fee + $6/maintenance fee per month)
RBC Visa Classic Low Rate OptionLow InterestUnsecured• Fuel savings at Petro Canada
• Extended warranty insurance
• 12.99% APR
$20
Capital One Low Rate Guaranteed Mastercard®Guaranteed ApprovalUnsecured• Guaranteed approval
• Purchase APR: 14.90%
$79
Capital One Guaranteed Secured Mastercard®Best Overall Secured Credit CardSecured• Guaranteed approval
• Purchase APR: 19.8%
• Balance Transfer APR: 19.8%
$59
Home Trust Secured VisaHigh Credit LimitSecured• High approval rate
• Up to $10,000 credit limit • Purchase APR: 19.99%
$0
KOHONon-Credit OptionPre-Paid• Chequing account with the benefits of a credit card
• Earn 1% cash back on groceries, bills & services. Earn up to 5% extra cash back when shop with partnered merchants.
$0

Best Credit Card For Building Credit Score While Earning Rewards

Winner: Plastk Secured Credit Card

Plastk logo

New customers who sign up for a Plastk Secured Credit Card can earn 5,000 Plastk Bonus Reward Points (≈$20) after 3 months of being a customer.* Terms & Conditions Apply. Plus, receive a 0% interest rate on purchases for the first 3 months.

    The Plastk Secured Credit Card is the first secured card in the country that gives cardholders the opportunity to earn premium rewards on everyday spending while also building up their credit history and score. Earn 1 point for every $1 you charge to the card. Then, redeem points (2,500 Plastk Reward Points equal $10) for rewards like statement credits, merchandise, charity donations, gift cards, travel rewards and exclusive events. You can also earn extra points via the card’s referral program and the attractive welcome offer for new cardholders: New customers who sign up for a Plastk Secured Credit Card can earn 5,000 Plastk Bonus Reward Points (≈$20) after 3 months of being a customer.* Terms & Conditions Apply. Plus, receive a 0% interest rate on purchases for the first 3 months. The minimum security deposit for the card is $300, with a maximum deposit of $10,000. The amount you deposit becomes your credit limit.

    Other great features include a lower-than-average standard APR of 17.99%, a grace period of 25 days with no interest on purchases, and a free monthly credit report from Equifax so you can stay on top of your financial health. There is no credit check required to apply and even those with no credit history or a bad credit score are likely to get approved. The online application process is fast and straightforward and you can be approved in as little as 24 hours.

    The Details:

    • Annual Fee: $120 ($48/annual fee + $6/maintenance fee per month)
    • Minimum Income Eligibility: None
    • Credit Score Required: N/A
    • Welcome Offer: New customers who sign up for a Plastk Secured Credit Card can earn 5,000 Plastk Bonus Reward Points (≈$20) after 3 months of being a customer.* Terms & Conditions Apply. Plus, receive a 0% interest rate on purchases for the first 3 months.
    • Additional Perks: Premium rewards program, monthly free credit score, referral program
    • Other Card Info: Purchase APR: 17.99% | Cash Advance APR: 21.99%

    Best Low-Interest Unsecured Credit Card

    Winner: RBC Visa Classic Low Rate Option Card

    RBC Visa Classic Low Rate Credit Card

    If you know you’re going to be carrying a balance, you should apply for the RBC Visa Classic Low Rate Option since it has an interest rate of 12.99%. This rate is lower than all the other unsecured and secured credit cards on our list but note that 12.99% is still a fair amount of interest to be paying. More importantly, if you’re carrying a balance, you could run into cash flow issues if an emergency arises – which is why it’s recommended to always pay off your bill in full every month.

    With RBC, you may not qualify for the card if you have a low credit score, but they claim to look at your overall financial picture (e.g. your savings, income-to-debt ratio and more) when deciding on whether to approve you for the card or not. If you are approved, you get benefits like purchase protection, zero fraud liability, and 3¢ off each litre of gas plus 20% extra Petro Points at Petro-Canada gas stations.

    The Details:

    • Annual Fee: $20
    • Minimum Income Eligibility: $15,000
    • Credit Score Required: Fair-Good
    • Welcome Offer: None
    • Additional Perks: Purchase protection, zero fraud liability, gas discount and extra Petro Points at Petro-Canada gas stations
    • Other Card Info: Purchase APR: 12.99% | Cash Advance APR: 12.99%

    Best Guaranteed Unsecured Credit Card for Bad Credit

    Winner: The Capital One Low Rate Guaranteed Mastercard®

    Capital-One-Guaranteed-Mastercard-243

    Capital One has always strived to help Canadians improve their credit score, which is why the Capital One Low Rate Guaranteed Mastercard® is such a popular option. In fact, it’s our top choice for the best credit card for guaranteed unsecured card approval. As the name implies, you’re guaranteed to be approved as long as:

    • You can provide $75-$300 in security funds
    • Be at least the age of majority in your province or territory of residence
    • Not applied for another Capital One product more than once in the last 30 days
    • Not had an existing account, pending application or Capital One account that was in good standing in the last year

    Once approved, Capital One will let you know how much you need to deposit in security funds and they’ll assign you a credit limit. As you make your payments on time, Capital One will report that to a credit bureau. If your account is in good standing, your credit score will slowly increase.

    The Details:

    • Annual Fee: $79
    • Minimum Income Eligibility: None
    • Credit Score Required: Bad to Poor
    • Welcome Offer: None
    • Additional Perks: None
    • Other Card Info: Purchase APR: 14.90% | Cash Advance APR: 21.9% | Balance Transfer APR: 14.90%

    Best High Credit Limit Secured Credit Card for Bad Credit

    Winner: Home Trust Secured Visa

    If you don’t qualify for an unsecured card or the Capital One Low Rate Guaranteed Mastercard®, then the Home Trust Secured Visa may be your last choice. This isn’t a bad thing, as this card typically has a high approval rating.

    Since this is a secured card, you do need to deposit some funds to be able to use it. The good news is that your credit limit can range up to $10,000 depending on your deposit so this could be a good option for you if you plan on making a large purchase in the near future.

    The Details:

    • Annual Fee: $0
    • Minimum Income Eligibility: None
    • Credit Score Required: Poor
    • Welcome Offer: None
    • Additional Perks: None
    • Other Card Info: Purchase APR: 19.99%| Cash Advance APR: 19.99%

    This credit card product is not available in Quebec.


    Best Overall: Guaranteed Approval Secured Credit Card for Bad Credit

    Winner: Capital One Guaranteed Secured Mastercard®

    Capital-One-Guaranteed-Mastercard-243

    The Capital One Guaranteed Secured Mastercard® is the best overall secured credit card because of its brand. As mentioned, Capital One has always made it a point to help Canadians with rebuilding credit and this card is designed for people with lower credit scores.

    Assuming you meet the conditions, you’re guaranteed to be approved. As you increase your security funds with this card, your credit limit will increase too. This is a great way to help you become more comfortable with how you use your credit card.

    The Details:

    • Annual Fee: $59
    • Minimum Income Eligibility: None
    • Credit Score Required: Bad to Poor
    • Welcome Offer: None
    • Additional Perks: None
    • Other Card Info: Purchase APR: 19.8% | Cash Advance APR: 21.9% | Balance Transfer APR: 19.8%

    Guaranteed Approval Credit Cards for Bad Credit in Canada

    As you may have figured out by now, “guaranteed” can be a bit of a loose term. Credit card providers typically still have some criteria that you must meet. Although those conditions are easy to meet, one small thing could mean your application is denied.

    You could try applying with other credit card providers, as every one of them looks at your creditworthiness with their own eyes. But don’t stress, you should be approved for at least one secured credit card.

    KOHO

    Koho logo

    Sign up and get a $20 instant cash bonus (once you load your account and make your no minimum first purchase within 30 days) right to your KOHO account with our link or YOUNGANDTHRIFTY referral code.

      If you’re not approved, you could still get a credit card such as KOHO, a free pre-paid, reloadable card and an integrated app that gives real-time insights into your daily spending and offers the optional Credit Building by KOHO tool. Basically, you can only use what you’ve deposited on your card with KOHO. Since KOHO acts more like a debit card, your credit score won’t increase, but you will at least have access to the Mastercard® network so you can make online purchases and use it wherever Mastercard® is accepted. Also, you can earn cash back using your KOHO card!

      Why Carry a Credit Card If You Have Bad Credit?

      Many people wonder if you should carry a credit card if you have poor credit. It’s a legit question since abusing your previous credit cards may have been the reason why you ended up with debt and a bad credit score to begin with. It’s best to abandon all credit cards and go cash, right?

      Well, you could do that, but the problem is, you won’t improve your credit score by using cash. The major credit bureaus, Equifax and Transunion, can only determine your credit score based on how you use your credit. If you have a bad credit score now and stop using credit cards, then your credit score would never change.

      The good news is that there are credit cards designed to help you with rebuilding credit. It won’t come with any points or many benefits, but your credit score will increase if you use these cards responsibly.

      Applying for a Credit Card with a Bad Credit

      When choosing the best credit cards for bad credit in Canada, it really comes down to two types of cards: secured and unsecured cards.

      • With a secured credit card for bad credit in Canada, you need to make a security deposit to your account. Since you have poor credit, the credit card issuer will require these funds to show that you’re serious about improving your credit. Generally speaking, the amount you deposit typically corresponds with the credit limit you’re given. You can’t use those funds to pay down your balance, but they will be returned to you if you close your account.
      • Unsecured credit cards for bad credit in Canada are similar to regular credit cards in the sense that no collateral is required for you to use the card. Once approved, the credit card company will assign you a credit limit that they believe is appropriate for your credit score. You may have limited credit, to begin with, but you may qualify for an increased amount later.

      If you’re ready to apply for a credit card and you know you have poor credit, start with one of the unsecured cards we have listed. These cards are designed for people who have lower credit scores so don’t bother trying to apply for a credit card that gives you a big welcome bonus. Remember, your goal here is to improve your credit score.

      Now let’s say you’re not approved for any unsecured cards. It’s time to turn your attention to a secured credit card. These types of credit cards have a much higher approval record, but there are still a few things you should look out for. The most important thing is arguably the annual fee since you want to keep your costs down, but don’t ignore the interest rate, especially if you know you’re going to carry a balance.

      You may not have a ton of options when it comes to the best credit cards for bad credit in Canada, but at least you’ll likely be approved for a card. Once you’ve increased your credit score, consider applying for one of the best credit cards in Canada that offers more benefits.

      The Best Credit Cards by Category:

      Barry Choi

      Barry Choi

      Barry Choi is a personal finance and travel expert at MoneyWeHave.com. He has been quoted by media in Canada and the United States, including The Financial Post, The Toronto Star, Business Insider, The Globe and Mail, and has appeared on HuffPost Live.



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