How to Live Without a Credit Card in Canada

live without credit cards in canada

If you live without a credit card in Canada, you’re practically a nobody – or at least it feels that way. The world moves at the speed of swipe and without that little piece of plastic, doors close. Friends jet set without you, hotels turn you away and simple online purchases become a major pain point.

Living without a credit card isn’t just about convenience and credit scores, it’s about dignity, accessibility and the sharp sting of exclusion. But this call to action can turn things around. You absolutely can live without a credit card in Canada. We’ve put together a list of strategies to help you thrive in a country addicted to debt. You got this!

Why is it so hard to live without a credit card?

Credit cards are as ubiquitous as the Double-Double. Right now, we rank second highest in the world for cashless transactions with more than 76 million credit cards in circulation. Everyone and their dog has one (or two!) and almost everyone wants you to use it – for everything.

That makes living without a credit card in Canada challenging for several reasons:

Online shopping

Many online retailers require a credit card for payment. Without one, online shopping becomes incredibly difficult. Alternatives like debit cards or online payment platforms are not always accepted.

Travel & accommodations

Rental car companies, hotels, and airlines almost always require a credit card for reservations. Meanwhile, alternatives usually involve more hassle. And certain types of prepaid cards don’t fill the bill.

Credit history

In Canada, using a credit card responsibly is the easiest and most common way to build a credit history. A good credit score creates milestones like financing a home purchase, buying a car, or even getting certain jobs. Without a credit card, building this history can potentially derail your goals or rob you of opportunities.

[Offer productType=“OtherProduct” api_id=“6511dc04a4ba41238225b316″]

Convenience & security

Credit cards offer convenience and additional protections against fraud or loss that other forms of payment cannot provide. If someone steals your credit card, you usually won’t be liable for unauthorized purchases. However, if someone steals your wallet or accesses your bank account via a debit card, you could lose actual money. In many cases, your account gets frozen while the situation becomes resolved which prevents you from accessing your cash.

Subscription services

Many subscription services like streaming platforms, gyms, or even utility providers prefer or even require a credit card for automatic monthly payments. Without one, managing these subscriptions becomes more complicated.


A credit card can be a crucial financial tool in emergencies. After all, they allow you to access funds quickly if you need to pay for unexpected expenses like car repairs or medical bills. While you’d prefer to have money in a savings account for this purpose, it may be enough. And the reality is that most people do not have the recommended 3 to 6 months’ worth of expenses saved up.

Limited alternatives

While you have other payment methods, like prepaid credit cards, cash, and debit cards, these options may come with fees and other inconveniences. The big banks have seriously let us down but not keeping up with our changing needs in a digital world. For shame!

Rewards & perks

Many credit cards offer rewards, cash back, or other perks that you miss out on if you don’t have one. These can add up to significant savings or benefits over time.

9 strategies to live without a credit card (and thrive doing it!)

Living without a credit card in today’s swipe-now-think-later society sounds like a Herculean task, but it’s far from impossible. In fact, it can be empowering. Here are 9 simple strategies to live without a credit card (and thrive doing it!), transforming what used to be embarrassing into a recipe for freedom and control.

Use the right kind of prepaid credit card

When the bank says no and you’re feeling sad, a prepaid card can temper the sting. Then, you won’t feel so bad! Prepaid credit cards combine the convenience of a regular credit card with the core functionality of a debit card.

Instead of taking on debt that you have to pay back every time you swipe, you load it with your own money that you already have. Since you’re not actually borrowing money, prepaid cards do not require a credit check because your credit score is irrelevant. Since you can only spend the money you load onto the card, you will never go into debt or pay a dime of interest!

Avoid these prepaid credit cards if you want to live without a credit card

But you can’t get just get any old prepaid card and expect it to solve all your problems. Most merchants will accept some types of prepaid cards, and some they absolutely will not. Why?

Many prepaid cards can be bought anonymously, with the funds typically limited to just a few hundred dollars. This is significantly lower than the credit limit on most traditional credit cards. For some businesses – like airlines, hotels, and car rental companies – these types of cards are riskier. In short, they can’t necessarily trace them back to an individual. Or they may worry about the card having enough funds available to cover additional charges – like if you trash the hotel or crash the rental car.

And these types of prepaid cards are notorious for not supporting recurring bill payments, like your favourite streaming services. Some don’t even let you pay at the pump for gas! Thank you, next.

Avoid the kinds of prepaid cards you can buy at places like gas stations, grocery stores, pharmacies, online, etc. They won’t get accepted by airlines, hotels, and car rental companies. Nor do they come with rewards like cash back and other perks.

Get one of these prepaid credit cards instead

Instead, you want to opt for the best prepaid credit cards issued by institutions like KOHO, Neo, and EQ Bank. They offer rewards, perks, and peace of mind that your card will most likely be accepted if you need to book a hotel room, rent a car, or catch a flight. That’s because you need to open an account and provide personal information to confirm your identity in order to even get the card – making it effortless to prove that it belongs to you.

Neo Money Card

[Offer productType=”SavingsAccount” api_id=”60fee79313fd2f260ff90749″ id=”173809″]

The Neo Money Card is hands-down the best option if you’re struggling to live without a credit card. It blends the practicality of a debit card with the flexibility and universality of a credit card. Requiring no credit check, it provides direct access to funds from your Neo Money account, eliminating the need to load the card manually. You can use it wherever Mastercard is accepted, both online and in-store.

What sets it apart is the insanely generous cash back program, making it one of the best cash back cards in Canada. You can get up to 15% cash back on each first purchase at Neo partner stores. With over 10,000 partners in their network spanning almost every purchase category, most Neo users earn an average of 5% cash back each month.

Add to that an annual interest rate of 1% on your account balance, all without monthly or annual fees, and the Neo Money Card becomes an attractive, hassle-free option for those steering clear of conventional credit cards.

KOHO Prepaid Mastercard

[Offer productType=”CreditCard” api_id=”637cf8206bbb7962c19ae225″ id=”144191″]

Coming in a close second we have the beloved KOHO Prepaid Mastercard, which happens to be one of the best prepaid travel cards in Canada. Like a regular credit card, you can use it wherever Mastercard is accepted, both online and in-person. This card comes free when you open an account. And KOHO lets you choose your own adventure with a selection of four different account plans ranging from $0 – $19 per month.

Depending on the plan you choose, you can earn up to 2% cash back on groceries, dining, and transportation. The money in your account earns up to 4.5% interest, and the top-tiered plans come with premium perks like no foreign transaction fees.

And the best part? You don’t have to choose between living without a credit card or building your credit score. You can do both with KOHO’s Credit Building subscription. For a monthly fee, they’ll open a tradeline on your credit file and report your monthly payment to the credit bureaus. The cost ranges from $5 – $10/per month depending on your account plan.

EQ Bank Card

[Offer productType=”CreditCard” api_id=”63d2cb6a18196b6d2e1928c2″ id=”198047″]

The EQ Bank Card is another great alternative to help you live without a credit card in Canada. It comes with no monthly fees, no extra charges on foreign currency transactions, and includes free ATM withdrawals across Canada. Any fees charged by Canadian ATM service providers are reimbursed by EQ Bank within 10 working days. You can use it wherever Mastercard is accepted, including in-store and online.

Best of all, this card isn’t just about saving on fees. It’s about earning as well. You earn 2.5% interest on your balance and you get 0.5% cash back on card purchases. Getting one is as simple as opening a Savings Plus Account with EQ Bank and loading it with funds. For someone trying to live without a credit card, the EQ Bank Card offers financial flexibility and rewards without unnecessary fees.

Use a debit-credit card

No, you’re not having a wicked case of Deja Vu. Prepaid cards and debit-credit cards are very similar, but not the same. If you’re not crazy bout carrying cash but can’t or don’t want to use a credit card either, a Visa-debit or Mastercard-debit is another great alternative.

Luckily, most of Canada’s Big Banks now offer Visa/Debit Cards that act as both a debit card and a credit card. That means you can use it like a credit card for things like online shopping, travelling, booking hotels, renting cars, and hopping flights. As long as your debit card has the Visa or Mastercard logo on it, you can use it where major credit cards are accepted without much stress.

In fact, you can use it for almost any purchase you would normally make with a credit card, but the funds are debited directly from your chequing account. No balances owing, no interest, no impact on your credit score.

Use a secured credit card

Ok, but, you still need a good credit score, right? Yes, especially for those big-ticket items like a house or a car. So while you can get by without a credit card for your day-to-day expenses, eventually you will need to use credit in order to build a credit history. Enter the secured credit card. Here’s how it works:

With a secured credit card, you provide a security deposit to the credit card issuer, typically in the amount of your desired credit limit. So for example, if you want a $1,000 limit, you’d provide a $1,000 security deposit. The credit card company will keep that cash in a trust account. If anything goes awry and you can’t pay off the balance or keep up with the payments, they’ll use your deposit to settle the amount owing.

This gives your credit card issuer the security of knowing that your credit account won’t go into default. And you have peace of mind knowing that the balance won’t go to collections and trash your credit score should the unexpected happen.

Just like a traditional credit card, every on-time payment you make builds your credit score month over month. And just like a traditional credit card, your balance owing is subject to interest and you can wrack up debt if you’re not careful.

A few of the best secured credit cards in Canada

Ideal for those building or rebuilding credit, these cards are accessible if your credit score sucks or doesn’t exist. To help you find the perfect fit for your wallet and lifestyle, here are just a few of our favourite secured credit cards in Canada:

Neo Secured Mastercard

[Offer productType=”CreditCard” api_id=”6209e06d9c5f4c05c0de0111″ id=”171391″]

The Neo Secured Credit offers a hassle-free path for those struggling to build credit in Canada – no credit check required! With guaranteed approval for Canadian residents meeting age and security fund requirements, it’s the most accessible secured card on the market. The minimum security deposit is just $50, and the interest rate ranges from 19.99% to 26.99% based on your financial situation.

There’s no annual fee and you earn instant cash back on purchases ranging from 0.5% to as much as 15% on the first purchase at one of over 10,000 Neo partner businesses across Canada. This makes it not just a tool for credit building, but also one of the most rewarding cash back secured cards available, with credit limits ranging from $2,500 to $10,000.

Home Trust Visa

Interest rate: 14.90% or 19.99%
Annual fee: $0 – $59
Security deposit: $500

*Not available in Quebec

Check out the Home Trust Secured Visa, one of the easiest credit cards to get in Canada. It’s got two different options to choose from, so you can pick what suits you best. If you’re all about saving, there’s a free option with no yearly fee and a 19.99% interest rate on purchases. Need to carry a balance? Then, for $59 a year, you can snag the low-interest card with a 14.90% rate.

You’ll need to put down a security deposit, of at least $500, and then you can even add someone else as an authorized user if you like. And guess what? You can get credit limits up to $10,000 if you can put that much down to secure the card. Just a heads up, though – if you’re living in Quebec or currently in bankruptcy, this card won’t be an option for you.

CapitalOne Secured Mastercard

Interest rate: 19.80% on purchases, 21.90% on cash advances
Annual fee: $59
Security deposit: $75

Meet the CapitalOne Secured Mastercard. As long as you can put down the security deposit, this card is yours, no fuss. And guess what? It has an annual fee of only $59 and an interest rate of 19.80% on purchases.

But here’s the best part: you can start with a deposit as low as $75, and it only goes up to $300. So if you’re eyeing a secured credit card but don’t have stacks of cash lying around for a big deposit, this could be the perfect fit for you.

Live within your means

If you want to live without a credit card, then remember this: it’s not how much money you make, it’s how you manage it. Maintaining a positive cash flow will significantly reduce the need for credit, and therefore, the need for a credit card. But in order to do that, you need to budget, budget, budget.

Spontaneous spending is not an option, at least not for things you don’t need. Plan ahead for expenses like clothes, car repairs, groceries and even Christmas shopping. Whenever possible, look for deals, discounts and flash sales. Better yet, check out your local Buy Nothing Facebook groups before trekking down to Canadian Tire to swipe your plastic.

Not sure how to set up a budget? Download the Hardbacon app and use the Zero Based Budgeting method to give every penny a purpose. You can set spending categories for pretty much all the things. Ideally, you want every dollar accounted for so that you have 0  miscellaneous dollars left over at the end of the month.

If you have surplus money, then allocate it somewhere like your emergency savings account or towards that new laptop you need for school. This method of budgeting helps uncover spending inefficiencies so you can maximize your savings

Track your monthly spending habits

With budgeting apps like Hardbacon, you can easily track all the money coming in and where it’s going. The app analyzes your spending behaviour so you can see where you tend to spend the most and how much. That $2 Double Double you grab on the way to work every morning will cost you more than $520 a year!

What about all your monthly subscriptions? There’s literally a subscription service for everything these days. If you’re not careful, the next thing you know you’ve signed up for 11 monthly subscription services costing you a whopping $150 a month! Without tracking, you might not notice $10 here or $20 there.

A tracking app will show you how much of your monthly income is being spent in different categories. Stop the leaks in your budget by cancelling subscriptions and downgrading services like cable or your cell phone plan. It’ll also help you to regain and take control of spending in areas you didn’t realize you were overspending, like your morning Double-Doubles or eating out.

Set up two chequing accounts

Many of us are faithfully putting in our 40 hours a week (or more), but somehow keep coming up short between paydays. If that sounds like you, join the club. If you’re not careful, you can be caught in that paycheque-to-paycheque trap. Consider opening another chequing account.

If you think multiple accounts will make tracking and budgeting more complicated, think again. Two accounts will allow you to compartmentalize your spending so that you don’t accidentally overspend on wing night with the guys right before your car insurance is due.

One account is for all your recurring monthly bills like rent, cell phone, car payments, etc. The other account is for your day-to-day discretionary spending, like your morning coffee habit, brunch with the girls, or date night at the movies.

Add up those total fixed monthly expenses and move that money to a separate account that you never touch. So for example, add up your recurring expenses like:

  • Rent
  • Car Payment
  • Car Insurance
  • Cable/Internet
  • Cell Phone
  • Heat & Hydro

If those come to a grand total of, say, $1,880.00 a month, then make sure you transfer that to the second account you opened just for bills. If you get paid bi-weekly, cut that total in half and transfer $940.00 every two weeks on your paydays. When the bills come due, the money will be in there.

Whatever is left in your discretionary account is yours to spend how you please. Just make sure you’re always funding your savings account so you have a cushion for those unexpected expenses. This method seriously reduces the risk of needing to use your credit card to cover living expenses between paydays.

Open a PayPal account

Even with all the convenience of alternative cash-less payment options, you may still prefer not to use any plastic at all when shopping on the world wide web. If that’s you, there is yet another online payment option.

Using Visa/Debit cards or your bank account for online transactions still comes with a level of risk. Those merchants may be able to access your personal payment information. The safety of your identity and private banking information depends on the security measures the merchant may or may not be taking. PayPal creates an extra layer of protection by acting as a middleman between your payment info and the merchant.

After the four most widely accepted credit cards, PayPal comes in as the 5th most accepted online payment method. You can link your debit card, pre-paid credit card or bank account to your PayPal account. You then fund your PayPal account and make transactions from there. PayPal uses end-to-end encryption, among other security measures, to complete your transactions and protect your information.

Set a savings goal

You’ve heard it before, a goal without a plan is just a dream. In order to live without a credit card and avoid debt, you’ll need to stick to a financial plan. That means contributing to your savings account every month without fail. If money is tight, don’t stress about how much you can afford to save. Just put something in there, even if it’s only $5.

Having a cushion will drastically reduce the need for a credit card in the event of an emergency. But if your savings account is small, and the unexpected expense is big, you won’t go into as much debt to cover that cost. You’ll be able to pay off that balance a lot faster than if you didn’t have any savings at all.

Squirrelling away some money each month into a high-interest savings account will help your balance grow even faster. And don’t underestimate the power of investing your hard-earned bacon within a TFSA. If you have a longer time horizon, you can choose to aggressively invest within the TFSA and your capital gains are tax-free. Let market returns and compound interest work their magic so you can reach your savings goals faster and avoid using credit to fund your big-ticket expenses.

Try to shop local

Have you considered shopping locally? You can ditch your plastic altogether and pay actual cold hard cash for the stuff you want, need and love. Not only that, but you’ll be supporting small business owners in your very own community. In this context, ditching credit cards and shopping locally actually creates jobs and stimulates your local economy. Yay, capitalism!

Keep in mind, shopping locally can actually be a privilege denied to some. It is often more expensive than it would be online or through a big box store. If you’re living on a modest income, your budget comes first – no shame in that game! Taking care of your financial health first will put you in a much better position down the road.

Shop local if and when you can, but don’t sweat it if you can’t. Once your situation changes for the better you can always change your shopping habits to favour your local merchants. In the meantime, if you’re budget dictates that you shop at Walmart you’re still doing your part. Walmart employs the people in your community and shopping there helps secure their employment.

What About Your Credit Score?

Great question. As mentioned earlier, maintaining a good credit score is essential for accessing those big purchases like a house, or a new car when your clunker kicks the bucket. Also, you need good credit for things like getting an apartment, opening a cell phone account, or applying for a job. Yes, A JOB!

More and more employers are checking the credit files of applicants to assess their character and the level of risk they may pose to the company. This is especially true for careers in the financial industry or any job where you will be handling payments or the sensitive, personal information of clients or customers.

You can build your credit history without a credit card by subscribing to a credit-building program. Borrowell offers a paid plan called Rent Advantage that uses your monthly rent payments to build credit – and it doesn’t involve your landlord at all. KOHO offers a Credit Building subscription plan that reports your monthly payments to the credit bureaus.

[Offer productType=”OtherProduct” api_id=”64dfa667646f0366d002a013″ id=”187863″]

You can also build credit with a loan, a secured credit card, or by handling the credit you already have responsibly. You probably have a student loan, car loan or some sort of debt on your credit file. Make those payments on time every month without fail!

Or maybe you’re young and haven’t had the chance to build a history yet. You can still do that without a credit card. You can take out a savings loan, which acts as an installment loan but the payments are returned to you at the end of the term (minus interest and applicable fees). Your monthly payments are reported to Equifax and TransUnion. As you make your monthly payments on time and reduce your balance, your credit score increases.

[Offer productType=”OtherProduct” api_id=”64e5e8eb2bb7ed64e70ab289″ id=”152823″]

How to live without a credit card: Putting it all together

A life without credit card debt is a beautiful thing. And it’s totally achievable. The first step is tuning out the naysayers who’ll tell you that you absolutely need a credit card for some things. That may have been true as recently as a few years ago. But now, it’s outdated advice.

Personally, I have to make a conscious effort to use my credit card. Between my Visa-Debit and prepaid cards, I haven’t encountered a situation in which I’ve actually needed a traditional credit card. I’ve booked hotel rooms, bought plane tickets, shopped online, and trekked around the US with just the money in my chequing account.

Sure, it’s a good idea to have a credit card on hand just in case. But if you’re afraid you’d misuse it and rack up debt, then you’re better off not having one at all.

Heidi Unrau is a senior finance journalist at Hardbacon. She studied Economics at the University of Winnipeg, where she fell in love with all-things-finance. At 25, she kicked-off her financial career in retail banking as a teller. She quickly progressed to become a Credit Analyst and then Private Lender. This hands-on industry experience uniquely positions her to provide expert insight on loans, credit scores, credit cards, debt, and banking services. She has been featured in publications such as WealthRocket, Scary Mommy, Credello, and Plooto. When she's not chasing after her two little boys, you'll find her hiding in the car listening to the Freakonomics podcast, or binge-watching financial crime documentaries with a bowl of ice cream. Fun Fact: Heidi has lived in five different provinces across Canada and her blood type is coffee.