Best low-interest credit cards in Canada for 2023
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Canada’s best low-interest credit cards 2023
If you carry a balance on your credit card, or if you expect to take on debt that will take some time to pay off, you might want to consider a low-interest credit card. While most regular credit cards charge around 20% in interest, the cards listed here offer rates that can be half that or less. Some cards even come with attractive balance transfer promotions that will allow you to pay down debt at a greatly reduced rate for a limited time. If you’re looking to see which one has the best rates, perks and promotions, read on for our list of the best low-interest credit cards in Canada.
MBNA True Line Gold Mastercard*
At a glance: The MBNA True Line Gold Mastercard has a regular purchase interest rate of 8.99%—that’s less than half of what’s on a typical credit card. Plus, the $39 annual fee is manageable.
- Annual fee: $39
- Interest rate: 8.99% on purchases, 24.99% on cash advances, 8.99% on balance transfers
- Welcome offer: No welcome offer.
- Additional benefits: Savings with Budget and Avis car rentals; protection against fraudulent charges; purchase protection and extended warranty.
- Annual income requirement: None listed
Pros
- Get up to nine authorized users for free.
- When you rent a car from Budget or Avis, you’ll save a minimum of 10% off the base rates.
Cons
- This credit card doesn’t offer much in the way of perks and benefits, and it does not have points or cash back rewards.
- The purchase interest rate for Quebec residents is 10.99%—which is higher than the rate offered to residents of other provinces and territories. However, this card is still the the lowest rate MBNA credit card available to Quebecers.
Flexi Visa
At a glance: The Flexi Visa from Desjardins credit union offers a low 10.90% interest rate. Plus it has perks like limited travel insurance, up to $1,000 in new mobile device insurance, and the ability to pay for larger purchases in monthly instalments.
- Annual fee: $0
- Interest rate: 10.90% on purchases, 10.90% on cash advances
- Welcome offer: None
- Additional benefits: Get a second credit limit on your card through Desjardins’ Accord D financing; three days of travel insurance; new mobile device insurance; up to a 15% discount at Hertz car rental and up to a 10% discount at Thrifty and Dollar car rental locations; purchase protection and extended warranty.
- Annual income requirement: None
Pros
- It comes with travel insurance coverage that includes emergency medical, trip cancellation and lost or damaged baggage.
- Use this card to buy a new mobile device, and you get up to $1,000 to cover loss, theft, damage or mechanical failure.
- Access to Accord D through Desjardins, which may get you a quick approval for up to $50,0000 in financing.
Cons
- While a pro, the limited travel insurance only covers up to the first three days of your trip. If you are away for for longer, you’ll need to buy extra insurance.
- The interest rate is not the lowest on this list.
HSBC +Rewards Mastercard*
At a glance: The HSBC +Rewards Mastercard offers a low 11.9% interest rate, plus the ability to earn HSBC points that you can redeem for travel, merchandise and gift cards—or you can apply them to your HSBC mortgage, credit card or savings account. If you’re looking for a low-interest credit card that also allows you to collect rewards points, this is a good option.
- Annual fee: $25 (waived for the first year)
- Interest rate: 11.9% on purchases, 11.9% on cash advances, 11.9% on balance transfers
- Welcome offer: Get up to $200 in total value for the first year! Must apply by February 28, 2023. Conditions apply.
- Additional benefits: Purchase protection
- Annual income requirement: None listed
Pros
- The welcome offer has a value of up to $200.
- Earn HSBC Rewards when you use this credit card. You’ll get 2 points per $1 spent on eligible dining or entertainment purchases and 1 point per $1 on everything else.
Cons
- Doesn’t include any travel insurance or other perks.
- The 11.9% interest rate is not the lowest around.
MBNA True Line Mastercard*
At a glance: This low-interest card from MBNA gets you many of the same perks as the MBNA True Line Gold Mastercard—also on this list—with slightly higher interest rates. The advantage of this card is that it comes with no annual fee and a lengthy no-interest balance transfer.
- Annual fee: $0
- Interest rate: 12.99% on purchases, 24.99% on cash advances, 12.99% on balance transfers
- Welcome offer: Get a 0% promotional annual interest rate for 12 months on balance transfers completed within 90 days of opening the account.
- Additional benefits: Savings with Avis and Budget rentals
- Annual income requirement: None listed
Pros
- The promotional balance transfer rate of 0% is in effect for a full year, which gives you a good amount of time to pay down outstanding debt.
- Add up to nine authorized users to the account for free (depending on which repayment plan you select for your purchase).
Cons
- Does not include insurance or other perks and benefits.
- There’s no annual fee, but you’ll pay slightly higher interest rates than with the comparable MBNA True Line Gold Mastercard.
American Express Essential Card*
At a glance: The only American Express card on this list, this no-annual-fee Essential credit card offers a low 12.99% interest rate. It also comes with Amex-related perks like Front-of-the-Line experiences, dining and entertainment, and special offers.
- Annual fee: $0
- Interest rate: 12.99% on purchases, 12.99% on cash advances, 0% on balance transfers
- Welcome offer: None
- Additional benefits: Access to Amex Front-of-the-Line presale and reserved tickets, as well as special cardholder offers, dining, retail and entertainment experiences; up to $100,000 in death and dismemberment travel insurance; access to Amex’s Plan It Installment Program.
- Annual income requirement: $15,000
Pros:
- American Express cards give cardholders access to presale tickets, exclusive events and curated dining and entertainment experiences.
- It also offers Plan It, which allows you to pay off larger purchases in installments for a fixed monthly fee, which is based which repayment plan you select for your purchase.
Cons:
- The included travel insurance is limited to up to $100,000 of accidental death and dismemberment coverage.
- Doesn’t include as many extras of other credit cards, such as these best travel insurance credit cards.
BMO Preferred Rate Mastercard*
At a glance: With a very reasonable $20 annual fee and a 12.99% interest rate, the BMO Preferred Rate Mastercard will appeal to those who want to stick with a big bank—particularly current BMO customers. The welcome offer sweetens the pot with a 0.99% promotional interest rate on balance transfers for nine months and a first-year fee waiver.
- Annual fee: $20 (waived for the first year)
- Interest rate: 12.99% on purchases, 15.99% on cash advances, 12.99% on balance transfers
- Welcome offer: Receive a 0.99% introductory interest rate on balance transfers for nine months with a 2% transfer fee, and get an annual-fee rebate for the first year (a $20 value).
- Additional benefits: Extended warranty and purchase protection
- Annual income requirement: $15,000 (personal or household)
Pros:
- The promotional offer gives you a 0.99% balance-transfer interest rate for nine months and waves the annual fee for your first year.
- Get a BMO Performance chequing account, you’ll never have to pay the annual fee.
- Add another cardholder for free.
Cons:
- This credit card does not offer insurance, rewards or other extras.
- The balance transfer promotion runs for nine months, which is not the longest offer among cards on this list.
National Bank Syncro Mastercard*
At a glance: Unlike most credit cards, the National Bank Synchro Mastercard comes with a variable interest rate. You’ll pay an interest rate of 4% plus the bank’s prime rate (a minimum of 8.90%) on purchases, and 8% plus the prime rate (or a minimum of 12.90%) on cash advances and balance transfers. The Synchro credit card has the benefit of a lower interest rate than other cards, but it does carry the risk that your interest rate could rise in the future.
- Annual fee: $35
- Welcome offer: Extend the manufacturer's warranty period up to twice on most credit card purchases
- Interest rate: 4% + prime (or a minimum of 10.7%) on purchases, 8% + prime (or a minimum of 14.7%) on cash advances, 8% + prime (or a minimum of 14.7%) on balance transfers
- Additional benefits: Access to Mastercard Priceless Cities program; purchase protection and extended warranty
Pros:
- The minimum interest rates of 8.90% for purchases and 12.9% for balance transfers and cash advances are very competitive.
Cons:
- While the appeal of variable rate cards comes from the potential to snag the best rates on the credit card market, the minimum rates offered by this card undercut the lowest rates of other cards on this list by only 0.09%.
Frequently asked questions
If you look at the terms and conditions for your credit card, you’ll see your APR—the “annual percentage rate”—charged by the issuer. Although the cards on this list offer low rates, most credit cards charge an APR of around 19.99%. As the name suggests, your APR is communicated in annual terms, but it’s actually calculated daily and charged monthly. While the calculations are fiddly, the concept itself isn’t too complicated: You can figure out your daily rate by dividing your APR by 365 (the number of days in a year) and use that to determine how much interest you’re being charged on any outstanding debt.
For example, say you have $1,000 in debt on a credit card with a 19.99% APR. Your daily rate will be around 0.0548% (19.99%/365), so in one day that $1,000 will accumulate just over $0.54 in interest charges. Your interest compounds daily, which means that the next day, assuming you don’t make any additional purchases, you’d be charged interest on a total of $1,000.54, and so on.
That’s why it’s best to pay down your debt as quickly as possible. If you don’t pay off your balance in full by the date noted on your statement, you’ll owe interest, starting on the day that you made your purchase.
The above example is, of course, simplified. If you continue to make purchases on your card over the course of the month, the bank will usually take the average balance to calculate the daily interest. If you pay off your credit card in full every month, you won’t owe any interest at all on your purchases.
For variable rate cards, like the National Bank Syncro card, the same idea applies, except that your interest rate changes alongside the prime rate.
In all cases, also note that the interest you are charged on purchases might differ from the interest charged on cash advances or balance transfers.
It’s tempting to choose credit cards that offer rewards or cash back, but these cards are really only worth using if you have the ability to pay off your credit card in full every month. Otherwise, you’ll rack up interest charges that far outpace the value of your rewards. Take the same example above: $1,000 in debt on a credit card with a 19.99% APR gets you around 0.0548% (19.99%/365), or just over $0.54, in interest charges every day.
If you go with a low-interest credit card, you’ll save big on the debt you’re trying to pay off. Some cards go as low as 8.99%. For example, a $1,000 debt will cost you around $0.24 per day (8.99%/365). The low APR will more than make up for not earning rewards. With less of your payments going to interest, you can actually pay down debt. After that, the money is yours to spend on that dreamed-of vacation or another goal.
Most credit cards offer a fixed interest rate, meaning that there is a single, unchanging percentage charged against your purchases. With a variable rate create card, on the other hand, the rate you are charged on unpaid balances can change based on a few factors.
Typically, the rate is tied to an index (usually the prime rate), which fluctuates, with an additional fixed percentage on top. For example, a card might charge the bank’s prime rate plus 5%. Also, your credit score plays a role in determining how low of a rate you can get.
This might sound complicated, but there’s a simple reason to consider a variable rate card: If you have an excellent credit score, you could land some of the lowest rates available in the credit card market. However, if you don’t have a great credit score, you want to keep things simple or need a card that also comes with a great balance transfer promotion, you may want to consider one with a fixed rate.
Our methodology
MoneySense’s picks of the best low-interest credit cards in Canada are based on our analysis of each card’s interest rates, benefits and perks, promotional offers and annual fees.