Best Low Interest Credit Cards in Canada

If you carry balances on your credit card, a Low-Interest rate credit card would be your best choice. A low-interest rate credit card allows you to minimize the charges on your balances and pay back the money you owe quicker with the lowest interest among all credit cards. 

Here are our top picks for the Best Low-Interest Credit Cards in Canada

Specification: Scotiabank Value® Visa* Card

Annual Fees

$29

Interest Rate

12.99%

Balance Transfer

12.99%

Cash Advance

12.99%

Network
Card Type

Balance Transfer, Low Interest, No Annual Fee

0
  • 0% annual fee
  • 2% cashback on all your purchases
  • No limit on the total cashback you can earn on your purchases

Specification: Tangerine Cash Back Credit Card

Balance Transfer Promo

1.95%

Annual Fees

$0

Interest Rate

19.95%

Balance Transfer

19.95%

Cash Advance

19.95%

Network
Card Type

Balance Transfer, Cashback, Low Interest, No Annual Fee

0
  • Low annual interest rate of 8.99% on purchases as well as balance transfers and access cheques
  • Annual fee of $39; upto 9 additional authorized users with no additional fee
  • 7 types of insurance included
  • 24×7 protection against fraud
  • Significant savings for people who carry debt on Credit Cards

Specification: MBNA True Line Gold Mastercard®

Annual Fees

$39

Interest Rate

8.99%

Balance Transfer

8.99%

Cash Advance

24.99%

Network
Card Type

Balance Transfer, Low Interest, No Annual Fee

0

Low-Interest Rate Credit Cards Explained

Should you opt for the Low-Interest rate credit cards, you’ll find that you incur a lower rate of interest on the purchases you charge to your credit card. For instance, in Australia, you can expect to pay standard variable rates of 10% per year on Low-Interest rate credit cards. However, the interest rate on most other credit cards can range from 15% to 24% per year. You may also receive promotional offers on Low-Interest rate credit cards that allow you to make purchases at 0% interest rates for a fixed time frame.

Best Low-Interest Rate Credit Cards 

Credit cardInterest RateAnnual Fee
Scotiabank Value® Visa* CardScotiabank Value® Visa* Card12.99%$29
MBNA True Line Gold Mastercard®8.99%
$39
Tangerine Cash Back Credit Card18.99%
(2% Cashback)
$0
HSBC +Rewards™ Mastercard®11.90%$25
Refresh Financial Secured Visa17.99%
$12.95

Best Low-Interest Rate Card:

These cards allow you to make purchases at variable interest rates of less than 15% per year. While you can expect to pay a low annual fee, you may not receive many perks or added benefits.

Low-Interest Rate with Balance Transfer 

You’ll pay a Low-Interest rate on the purchases you make on these cards. You can also transfer an existing balance from another credit card you might have, and you’ll probably pay 0% interest for a particular time.

Low-Interest Rate with Cashback

Get Cashback of up to 2% on everyday purchase + pay no annual fees Tangerine Credit Card is our Top Pick for the Best Credit Cards currently offered in Canada

Low-Interest Rate with Rewards

HSBC +Reward Mastercard is one of the best credit cards with low interest and you can earn great rewards. However, because of the added features, there is a small annual fee. This fee could easily be offset by the reward dollars you would earn and the money you would save by paying low-interest rate on your monthly credit card balance. 

The +Rewards MasterCard from HSBC bank offers so many benefits and services when you apply for it.

  • You can earn 30.000 points and a full deduction of the annual fee for the first year if applied by March 29, 2021
  • The annual fee after the first year will be only $25

Specification: HSBC +Rewards™ Mastercard®

Annual Fees

$25

Balance Transfer

11.90%

Interest Rate

11.90%

Network
Cash Advance

11.90%

Card Type

Travel Rewards

Featured!
1

Secured Low-Interest Credit Card

Guaranteed approval and Low Interest Rate will help you build credit and save on the monthly interest, A small catch $12.95 annual fee which is one of the lowest in the market for a secured credit card. If you have a low credit this card is a no brainer.

Approval without credit check!

Specification: Refresh Financial Secured Visa

Annual Fees

$12.95

Interest Rate

17.99%

Balance Transfer

N/A

Cash Advance

N/A

Network
Card Type

Secured, To Help Build Credit

0

Expected Savings on Low-Interest Rate Credit Cards

Every added percentage point in the interest rates can help you save money. Here’s how:

Say you have a debt of $2,000 on your credit card that you’ll pay off over 6 months. At interest rates of 20% per year, you’ll incur a charge of $118.3. However, if the interest rates were 12% per year as in Low-Interest rate credit cards, you’ll only incur a charge of $70.6. Accordingly, you’ll save $47.70.

Who should get a Low-Interest Credit Card?

Can’t pay your credit card balance every month? Fallen into credit card debt? If you answered yes to either of these, a low-interest card may be able to save you the money in interest charges. Because of how quickly credit card interest compounds and accumulates, it makes it harder to pay the card off quickly. In fact, if you pay just the minimum balance on a card, it could take you years to pay off a few thousand dollars of credit. Transferring a balance to a low-interest credit card may give you the interest savings you need to pay off those pesky bills. So if your credit card debt is creeping up on you or you are carrying a balance month-to-month, you might be able to benefit from a low-interest card. Another benefit of these cards is that they don’t usually have any kind of rewards or points programs attached to them. How this is a benefit? Many credit card experts will tell you that these rewards or points programs will actually encourage spending, and if you are already struggling with debt, this may not be good. So a low-interest card will help you focus on the numbers and get yourself debt-free in less time.

Low-Interest Credit Cards

Choosing the ideal credit card for you is a personal decision that is based on various factors and your spending habits.

  • If you’re a frequent traveller, you could opt for a card that gives you travel rewards so you can accumulate points.
  • As a student, you might want a card that carries no annual fees.
  • Users that do not have a good credit rating can choose secured credit cards that can help them build creditworthiness.
  • If you regularly carry high balances each month, you should look for a credit card with Low-Interest rates so you can pay off the balances and get out of debt.

Choosing the Best Low-Interest Rate Credit Card

When choosing the best Low-Interest rate credit card that is well suited for your needs, keep these important factors in mind.

  • Applicable interest rates: Credit card companies charge you an interest rate on your balances by calculating it daily. You’ll see the total charge on your monthly credit card statement. If the interest rates are low, you’ll pay a lesser amount in interest.
  • Interest-free days: Credit card providers may offer you interest-free intervals where they won’t levy a charge on your purchases. You can make purchases free of interest as long as the time period But, if you haven’t paid off the balance by the due date on your credit card statement, you’ll incur the entire applicable interest.
  • Cash Advances: The interest rate applicable on cash advances such as the ATM cash withdrawals, gambling, and foreign currency purchases you make is typically higher than when you buy other items using your credit card. Such transactions do not have interest-free intervals.
  • Revert Rate: Credit card companies may offer you the facility of 0% rate of interest on your purchases or balance transfer offer. However, this offer may only last as long as the promotional period. Once this period ends, you’ll pay interest according to the revert rate. This revert rate may be high or equivalent to cash advance rates. It is advisable to assess these rates when making your choice.
  • Applicable Fees and Charges: The annual fees on credit cards may range between $0 on basic cards to $250 or higher on platinum and gold cards. While the $0 interest rate cards may seem attractive, you might have to pay high base rates on your purchases.
  • Added Fees and Charges: You may have to pay fees for ATM transactions, international transactions, or overdrafts on your credit limit. Check for the various charges you may have to pay when making your choice especially if you travel frequently.

Pros & Cons of Low-Interest Rate Credit Cards

Positives:

  • You’ll incur low rates of interest on your purchases so managing credit card debts will be easier.
  • You can look for Low-Interest rate credit cards with affordable annual fees.
  • Some low rate cards allow you added benefits like no charge on foreign transactions and balance transfers.
  • If you regularly have high balances on your credit card, Low-Interest rate credit cards can help you repay your debt and save on added charges and fees.
  • Such cards may carry beneficial features such as complimentary offers, annual fees, and introductory Choose the card that matches your requirements.
  • Ideal for users who cannot clear their balances in full each month, these cards lower the applicable interest rates.
  • You incur low fees each year.
  • You pay lower interest on credit card purchasing, balance transfers, and cash advances

Negatives:

  • Some Low-Interest rate credit cards may not offer you benefits and reward points.
  • You may have to evaluate the fees and charges on all credit cards before opting for the one that best matches your requirements.
  • You may need to show that you have a good credit history to qualify for these cards.
  • You may not receive many benefits and rewards including travel points and insurance.
  • You could end up incurring high consumer debts because of the low applicable interest.
  • Transferring large balances to Low-Interest credit cards can cost you a fee of 1% of the balance you’re transferring.

Why Should You Opt for the Low-Interest Rate Credit Card

Low-Interest rate credit cards are best suited for users who regularly charge purchases on their credit cards but don’t pay off the balance in full at the end of each month. When using these cards, you can pay back the cost of your purchases without incurring high-interest rates like on other cards. Choose a balance transfer card to pay off a substantial existing balance on your credit card. But, if you always pay your balances in full, then you might want to opt for a card that gives you interest-free days and added benefits like reward points.

Opting for the Low-Interest rate credit card can have several benefits:

  • Users that have a mortgage can consolidate their debt and opt for refinancing to a lower rate of the mortgage.
  • You can use it to pay off a large balance on your credit card.
  • You can use the card for everyday expenses or as an emergency source of funds since you’ll pay Low-Interest rates on them.
  • This card is beneficial for users who regularly carry high balances on their credit cards.
  • Although not advisable, you can use the card for cash advances.
  • You can transfer all the balances from your various credit cards into one Low-Interest rate credit card. In this way, you can make monthly payments on a single card and pay Low-Interest rates.

Low-Interest Credit Cards vs. No Annual Fee Credit Cards

There are a few factors to keep in mind when choosing a low-interest card: interest rates, the length of low-interest rate, special conditions for the low-interest rate, annual fees. Just like a regular credit card, low-interest cards will have competitive rates. Compare the different rates offered by the other benefits you will receive.

With some cards, the low interest is only for a promotion, meaning it will be temporary. So figure out how long the promotional low interest will last and decide if that fits with your financial goals. Next, you will want to make sure there aren’t any sneaky “special conditions” that must be met to qualify for a low-interest balance. One example would be needing to meet a minimum dollar amount spent on a monthly basis. You would want to avoid this kind of card unless the other perks of the card will benefit you.

Next, you will want to make sure there aren’t any sneaky “special conditions” that must be met to qualify for a low-interest balance. One example would be needing to meet a minimum dollar amount spent on a monthly basis. You would want to avoid this kind of card unless the other perks of the card will benefit you.

And lastly, you will want to check for annual fees. Most low-interest cards won’t have these fees because of the type of customer they are catering to. But when it comes to your credit you want to make sure you are doing your due diligence. Sometimes getting a credit card with no annual fees would end up saving you more in the long run.

Compare Low-Interest Credit Cards in Canada

Most credit cards will have average interest rates of 19.99% and up! However, a low-interest card is exactly what it sounds like: a credit card with a much lower interest rate. These cards typically have rates between 5% and 15%. A low-interest card will usually offer lower rates on other services such as balance transfers and cash advances.

If these are transactions you need to make, you will know that a regular card will usually have an extra high rate for them. If that wasn’t enough savings, you’ll be happy knowing these cards typically do not have an annual fee, saving you another $100 or more a year.

If these are transactions you need to make, you will know that a regular card will usually have an extra high rate for them. If that wasn’t enough savings, you’ll be happy knowing these cards typically do not have an annual fee, saving you another $100 or more a year.

Whether you are paying for a vacation or having an online shopping spree, the assurance of having a reasonable interest rate on your credit card will help you enjoy these things more. In addition to the peace of mind when carrying a balance, using a low-interest card for everyday purchases or when those emergency situations arise is a great way to build credit while knowing you will be paying reasonable interest rates.

In addition to the peace of mind when carrying a balance, using a low-interest card for everyday purchases or when those emergency situations arise is a great way to build credit while knowing you will be paying reasonable interest rates.

Cash advances, while not generally advised, sometimes cannot be avoided. The lower fee that you will pay for cash advances with a low-interest credit card will make that decision a little bit easier and safer. A great time to use your low-interest card is when you have multiple cards. You can transfer the higher interest balances onto your low-interest card. Not only will it bring your monthly payments down to one, but you will be paying a fraction of the interest on that payment.

A great time to use your low-interest card is when you have multiple cards. You can transfer the higher interest balances onto your low-interest card. Not only will it bring your monthly payments down to one, but you will be paying a fraction of the interest on that payment.

Whether you are looking for a rewards credit card or a low-interest credit card, we help you compare and find the best credit card providers in Canada.

Saving Money on (Low) Interest

By paying a lower rate of interest, this can save you hundreds of dollars in the long run. This makes it easier to remove debts much faster since most of the money is used towards paying off principal balances, rather than satiating charges of interest. Credit card rewards are devalued by interest, so there is no use in chasing this if you can barely manage to pay off your entire monthly bills.

You Can Easily Qualify for a Low Interest Credit Card

If there is some kind of whack on existing debt of credit card, you could transfer this to balance your credit card; this offers rates of interest as low as 0% for transfers in the first 6 to 12 months. But these cards are more complex to qualify for since they may ask for a really high credit score for that 0% rate.

If the score you have is not good enough (check this once a year, at least), you will most likely get approval for a low interest credit card that also includes competitive interest rates for balance transfers. These cards also keep lower minimal income requirements.

Compared to other cards, the balance regarding transfer interest rates will not spike after some time. This isn’t as low as with other cards. However, this type of card is a good option if you are certain you cannot pay off debts in the first 6 or 12 months. The annual fee for this card is $20, but this can be offset by the saved amount on interest charges.

Most of the balance transfer credit cards can also charge usual costs of 19.99% rate of interest for purchases. Because of this, the credit cards of low interest have a bigger and longer lifespan – once the existing balance is paid off, you will want to keep using that card due to its low-interest rate offer.

Improving your Credit Scores

Paying off your credit card bills (ideally, all your bills for that matter) timely is the best and simplest way to keep up a good credit score or improve a bad credit score – the payment history accounts for 35% of how the credit score is calculated. In case you do not pay off your balance fully or on time, you ought to make at least the minimal payment that is stated on your monthly bill. A credit card with low or lower interest rates equals lower minimal payments per month.

If you struggle constantly with regular and timely payments, you can have a look at another motivation method: low interest credit cards jack up interest rates (or double them, or more) in case you miss out several payments. If within a year you miss two payments on American Express Essential Credit Card, the interest rate increases from 8.99% to even 23.99%. For BMO Preferred Rate MasterCard, missing two payments in a year changes the rate of interest from 11.9% to 16.9%.

 

In today’s day and age Rewards credit cards are a hot topic. However, your failure or success with them depends on one critical aspect: your capacity to pay off the balance each month. If you fail to do so, you will be charged interest that can dilute any rewards benefits in the blink of an eye.

 

Rewards vs Low-Interest Credit Cards

These rewards credit cards are an ideal option for those who have a habit of cleaning their credit card slates each month but are not recommended for those who tend to carry their balance in the next month. Luckily, there is another type of credit that is more suitable for people like these, and that is a low-interest credit card. When talking about the best low-interest credit card, we look for an interest rate that is way lower than your average rate offered by credit cards, along with other benefits for a minimal fee.

Personal Loans vs Low Interest Credit Cards

Personal loans are risky and they should be the last option when you are trying to repay your high-interest credit card debt. Of course, banks advertise low-interest rates for personal loans but things are not as simple as they look. If you visit a bank branch to apply for a personal loan, you are required to show your proof of income. 

Furthermore getting approved for a personal loan is also a long process. Low-interest credit cards mentioned here are way better than personal loans because you know the interest rate what you will be paying and you can plan your monthly payments accordingly. 

The bottom line is that low-interest credit cards can help you get out of debt quite easily only if you use them right. To know more about the cards or check out other credit card options you have, don’t forget to use our low-interest credit card comparison tool.

Bottom Line

Interest represents the kind of credit card charge that cannot be avoided or escaped. However, low interest credit cards can help you get your debts in control and minimize the amount of money that you spend monthly on interest charges.

You can’t always pay the balance on your credit card every month because there are always unexpected things that come up in life. If you are likely to carry a balance on your credit card, getting a Low-Interest Credit Card could help you. Compare and find the best Low-Interest Credit Card that helps you pay off your principal balance quicker and also save on hefty interest charges.

 

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