Canada’s best no fee credit cards 2020
These cards provide perks without an annual fee.
These cards provide perks without an annual fee.
If you’re looking for a card that delivers top rewards without an annual fee, look no further. In exchange for slightly lower earn rates, these no-annual-fee cards still get you perks on what you spend. So whether it’s cash back that you want, no foreign transaction fees or generous travel points, these no fee credit cards offer gold-plated options.
With its competitive cash back and flexible spending categories, the Tangerine Money-Back Mastercard serves up a sweet deal. Cardholders automatically get 2% back on purchases in two spending categories, with a third category made available when they set up an automatic rewards deposit into a Tangerine Saving Account, which also doesn’t have any fees. All other spending earns 0.5%.
This means 2% cash back is available on purchases in up to three of the following categories: groceries, restaurants, gas, drug stores, recurring bill payments, entertainment, public transit and parking, furniture, home improvement, or hotel and motel stays.
And while this card offers only minimal perks like purchase assurance and extended warranty, it does allow you unlimited cash back, unlike many other cards that cap your rebates.
If you meet the $60,000 annual income requirement you’ll automatically be considered for the Tangerine World Mastercard, which comes with additional perks such as mobile device and rental car insurance.
This card allows account holders to collect MBNA Points, redeemable for a variety of rewards including travel, cash back, hotels and merchandise. Trip-happy cardholders will enjoy the ability to redeem 100 Points for $1 worth of travel—an impressive redemption rate of 1% that will help you get to your dream vacation faster. If you choose to redeem your Points for cash back, the rate is 200 Points per $1. For groceries, gas and restaurant purchases, the rate is 2 Points per $1 on your initial $5,000 in purchases, and everything else comes in at 1 Point per $1. And—great news for those saving against a large travel purchase—the Points never expire as long as your account with MBNA is open.
Additionally, this card offers seven types of insurance, including unexpected return home, rental car collision, and accidental death and dismemberment, balance protection and extended warranty. While you’d likely need additional travel emergency insurance to fill in the gaps, this card gets you started—a rarity on a no fee card.
With its regular 1.75% cash back, 2% back on Rogers products and no annual fee, this card should make most Canadian card users sit up and take notice—but for travellers and online shoppers, it’s a bona fide cause for celebration. That’s because purchases in a foreign currency earn a whopping 4% cash back, which covers the foreign transaction fee credit cards typically charge—between 2.5% and 3%—with a bit extra on top. Cash rewards can then be redeemed towards any eligible purchases made on your card, for the ultimate in flexibility. Cross-border shoppers, regular travellers and those who buy online will be very interested in the Rogers World Elite Mastercard.
There is one drawback, which is that applicants must show an annual income of $80,000; that’s going to exclude many Canadians. For those who can meet this requirement, though, it’s a great option.
There’s more than one way to improve cross-currency shopping, and ditching the foreign exchange fees altogether is a popular—but rare—option. The no fee HomeTrust Preferred Visa is one of the few cards available to Canadians that have no foreign transaction fees, and along with a respectable 1% cash back on all purchases without limit, it’s a card worth considering. Like many no fee cards, the HomeTrust Preferred doesn’t offer much in the way of insurance beyond purchase security, but it does provide one big bonus perk: membership in Roadside Assistance, which includes up to four service calls annually across North America. Also, when you use this card to pay for an automobile rental, collision and loss coverage are included. The HomeTrust Preferred Visa has a very accessible minimum annual income requirement of $15,000.
If you’re carrying a balance, you’ll want to get that debt onto a lower-interest card as quickly as possible—but the rate is only part of the equation. When card holders need to move money between cards, three numbers come into play: the regular interest rate; the balance transfer rate; and the balance transfer fee. Ideally, all three numbers are as low as possible. With a regular interest rate of 12.99%, a promotional balance transfer rate of 0% for 10 months, and a balance flat transfer fee of 3%, the MBNA True Line comes out on top. Add the fact that this card commands no annual fee, and this is a powerful card for someone trying to pay off their debt.
NOTE: APR and balance transfer offer are different for residents of Quebec.
Canadian students have their own needs, including a way to cover the financial burden of tuition and school expenses, the need to establish a healthy credit history and an unending quest for cash on hand. With no annual fee, a welcome bonus of 5% cash back for three months (up to $100) and a low $15,000 annual income requirement, the BMO CashBack card is designed with students in mind.
The 5% cash back welcome offer is top-notch (and applicants who plan ahead might do well by timing their first three months with the beginning of a semester—those books add up!), but 1% back on everything else is nothing to sneeze at. As a student card, there’s no specific income requirements and you can get approved even if you’ve never had a credit card before. It also comes with standard insurance coverage like extended warranty and purchase protection. Overall, this is an attractive entry-level card.
These days, many cash back cards offer attractive welcome bonuses, but once the promotion is over, the core card fails to impress. Not so with the SimplyCash Card from American Express. This card gives new users 2.5% back for a full three months (up to $150 in rebates), and afterwards reverts to a regular rate of 1.25%. While some cards complicate things by breaking down their rewards into spend categories, the SimplyCash lets you earn equally across categories—and, there is no limit to the cash you can earn back at the regular rate. Earn more by referring a friend—you can receive $100 in thanks each time, up to 15 friends.
The SimplyCash American Express includes shopping and travel protections, including $100,000 in travel accident protection, buyer’s assurance and purchase protection. And cardholders are automatically enrolled in American Express Invites, giving them access to premium entertainment options.
For those who shop regularly at Loblaws banner stores and Shoppers Drug Mart (or Pharmaprix in Quebec), the PC World Elite Mastercard offers a great way to take advantage of one of the most popular and useful loyalty programs in the country: PC Optimum. Here’s how it works: When you use your PC World Elite Mastercard, you earn a minimum of 10 Points per dollar spent, with multipliers for purchases at Shoppers (45 Points per dollar), and Esso, PC Travel or any Loblaws-owned stores like No-Frills, Fortinos or Real Canadian Superstore (30 Points per dollar). Points are redeemed anywhere PC products are sold, in 10,000-Point increments, which works out to $10. PC Optimum is a valuable, easy-to-use program—and the PC World Elite can help you make the most of it.
The main advantage of a no fee credit card is exactly what the name suggests: There’s no fee. This means that unless you’re carrying outstanding debt, using the card costs you nothing. The appeal of a free card is obvious, but there are some things to consider, not the least of which is that no fee credit cards typically offer far fewer benefits and perks than cards that carry an annual fee. More on that below, but first let’s look at some of the top reasons why a no fee option might be best for you:
One major drawback to no fee cards is that, with few exceptions, they lack the perks and benefits—particularly insurance—that’s offered by many cards with an annual fee. Typically, no fee cards do include very basic protections such as zero liability, purchase protection and extended warranty, but you’ll likely miss out on travel medical emergency insurance and rental car collision coverage and on perks such as airport lounge access. Ultimately, you’ll have to weigh these benefits against the fees and decide whether a no fee card works best for you.
|Card||Net reward (excluding 1st year sign-up bonus)|
|Tangerine Money-Back Card||$286|
|MBNA Rewards Platinum Plus||$348|
|Rogers World Elite Mastercard||$420|
|Home Trust Preferred||$240|
|BMO CashBack Mastercard||$240|
|PC Financial World Elite||$427|
For the best cash back credit cards 2020 ranking, MoneySense tapped into Ratehub.ca’s‡ credit card tool and calculated the numbers for both fee and no fee cash back rewards cards based on $2,000 in monthly spending. We used the following scenario: $500 on groceries, $200 on gas, $200 on restaurants, $125 on bill payments, $175 on travel, $225 on entertainment, $75 on pharmacy purchases and $500 on everything else.
The end game was a magic number—that is, the annual net reward in dollar terms to identify the top cash back cards for each type of spender. Our methodology also took into consideration other factors, including limited-time accelerated earn rates, the range of spending bonus categories, annual fee waivers, purchase protections and travel insurance perks.
‡MoneySense.ca and Ratehub.ca are both owned by parent company Ratehub Inc. We may be partnered with some financial institutions, but this does not influence the “Canada’s Best Credit Card” rankings. You can read more about this in our Editorial Code of Conduct.
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