Even if you have a poor credit score or no credit history, you should know that you can still get a credit card. Obtaining a credit card, instead of using a Visa debit card or even a prepaid credit card has a definite advantage: by paying off your credit card balance each month, you’ll be able to establish a positive credit history that will help improve your credit rating. This is an attractive solution for immigrants with no credit history, consumers who have previously gone bankrupt, or those with poor credit. It’s not easy to regain control of your financial life, but these cards can help you.
There are two types of credit cards that you can get regardless of your credit rating. The first are guaranteed-approved credit cards that don’t require a security deposit. Usually your credit limit will be just a few hundred dollars with such cards.
There are also secured credit cards that require a security deposit, which you cannot get back while you hold the credit card. You can only get your deposit back when the card expires or when you cancel it. Although this requires more capital up front, this type of card will suit those who have to make larger purchases with their credit cards, and therefore need a higher credit limit than what is provided by a guaranteed approval credit card with no security deposit.
Home Trust Secured Visa (no annual fee)
This card helps you improve your credit rating without paying an annual fee. Its interest rate on purchases and cash advances is 19.99%. The Home Trust Secured Visa credit card requires a minimum deposit of $500 and a maximum deposit of $10,000. Since your credit limit matches your deposit, you can get a credit limit of up to $10,000, as long as you have the necessary funds. This card is available everywhere in Canada, except in Quebec.
Home Trust Secured Visa (with an annual fee)
This card is the same as the previous one, with two differences. The first is that it has an annual fee of $59 (or $5 per month). Each additional Home Trust Secured Visa card has a fee of $19 per year, or a monthly fee of $2. However, its interest rate on purchases is 14.99% instead of 19.99%. Like the previous card, this card is available in all Canadian provinces except Quebec.
Refresh Financial Secured Visa Card
The Refresh Financial Secured Visa Card has an annual fee of $12.95 as well as an account maintenance fee of $3 per month. The fees are therefore $48.95 per year in total. However, your approval is guaranteed with this card. It has a 17.99% interest rate on purchases, cash advances and balance transfers. The minimum deposit required to get the card is $200, and the maximum deposit is $10,000. Since your credit limit will match your deposit, you can get a credit limit of up to $10,000, as long as you have the necessary funds.
Capital One Guaranteed Approval Secured Mastercard
As the title suggests, you are sure to be approved when applying for the Guaranteed Approval Secured Mastercard. It has an annual fee of $59, with an interest rate of 19.80%. The required deposit is between $75 and $300, and the maximum credit limit is $2500. It provides several benefits, such as Purchase Protection Insurance, Extended Purchase Warranty, Common Carrier Travel Accident Insurance, and Auto Rental Collision/Damage Insurance.
Capital One Guaranteed Approval Mastercard
No matter your credit rating, your approval is guaranteed when you apply for the Capital One Guaranteed Approval Mastercard. It has an annual fee of $59 with a 19.80% interest rate on purchases, balance transfers and cash advances. This card provides several types of insurance and the required deposit is between $75 and $300.
Capital One Low Rate Guaranteed Mastercard
The Low Rate Guaranteed Mastercard is a great choice if you want to rebuild your credit while getting a reduced interest rate of 14.90% on purchases and balance transfers. The annual card fee is $79 and the deposit required is between $75 and $300, depending on your current credit rating.
ScotiaBank No-minima Visa
This card is especially designed for people who have just arrived in the country or who have no credit history. The ScotiaBank No-minima Visa has no annual fee and its 16.99% interest rate is below the market average. It also offers an interest rate for balance transfers as low as 3.99% for the first 6 months. It requires a salary of $12,000 per year, and it has a minimum credit limit of $500.
RBC RateAdvantage Visa
The main advantage of the RBC RateAdvantage Visa, besides the fact that it is free, is that its interest rate varies depending on your credit rating. The lower your credit rating, the higher the interest rate will be, and vice versa. Thus, individuals with poor credit can obtain this card, although approval is not guaranteed. Despite this, its interest rate is generally lower than most credit cards on the market. In fact, the interest rate is based on the Royal Bank’s prime rate, plus between 4.99% and 8.99%. It also offers rewards, such as a 3¢ per liter gas rebate at Petro-Canada and 20% more Petro-Points when making purchases with the card.
National Bank MC1 Mastercard
National Bank’s MCI Mastercard is excellent for people with no credit history. With a $0 annual fee, it has a 20.99% interest rate on purchases and a 22.99% interest rate on cash advances and balance transfers. The minimum credit limit is $500.
ATB Financial Alberta Mastercard–Secured
This secured card is available only in Alberta, and it has an annual fee of $49 ($25 for each additional card). The Alberta Mastercard-Secured has a 19.90% interest rate on purchases, and a 21.90% interest rate on cash advances and balance transfers. The minimum deposit required for this card is $500.
This Top 10 of the best credit cards for rebuilding credit in Canada was compiled by Hardbacon, which has created a credit card comparison tool listing hundreds of Canadian credit cards. Hardbacon also helps you save money on savings accounts, chequing accounts, online brokers, robo-advisers, mortgages and personal loans. If you want to take things one step further and take control of your finances, you should download Hardbacon’s mobile app, which links to your banking and investing accounts, helps you plan and budget for your financial goals, and helps you invest better.