The Best Low Interest Rate Credit Cards in Canada 2019

low interest rate credit cards“Low-interest rates” and “credit cards” are two terms that don’t often go together in the personal finance world, but there are a handful of credit cards in Canada that fit this description. Low-interest rate credit cards are a useful tool if you tend to carry a balance on your credit card, or if you are in the midst of paying off high-interest debt.

Whatever your reason for considering a low-interest credit card, there are a variety of options available to you in Canada. Some credit cards offer low-interest rates for a promotional period only (for example, six months), while others offer low-interest rates but with an annual fee for the privilege. Meanwhile, others offer low-interest rates, but the rates are variable and tied to Canada’s prime rate.

Here is our list of the best low-interest credit cards available in Canada. Many of the credit cards on this list have an annual fee, so there is no downside to applying for one, keeping it in your wallet for emergencies. If you use these credit cards prudently whenever you have a balance that you can’t quite pay off, or need to make a purchase that you don’t have the cash on hand for, you’ll be better off financially. Plus, if you’re in debt, transferring your balance to a card with lower interest is an effective debt reduction strategy.

Credit Card Best For
American Express Essential CardNo Annual Fee
Scotiabank Value VisaLow interest fixed interest rate
MBNA True Line MasterCardShort-Term Balance Transfers
MBNA True Line Gold MasterCardShort Term Balance Transfers
BMO Preferred Rate MasterCardOverall low interest rates
TD Emerald Flex Rate VisaLow interest variable rates

Why Choose a Low-Interest Credit Card?

As you can see from our extensive list above, low-interest credit cards are not a “one size fits all” tool. There are three scenarios in which a low-interest credit card will make sense for your finances:

First is if you are carrying credit card debt. If you have a large amount of high-interest debt, transferring it to a balance transfer credit card will help you pay it off more quickly than if you paid 19.99% interest (or more!) on the entire balance every month.

The second scenario where one of these credit cards will make sense is if you intend to make a big purchase soon and you know you can pay it off in a few months. In this case, a low-interest credit card with a good balance transfer promotion could be a good option. You’ll have time to pay off the purchase without paying any interest charges whatsoever.

Finally, if you want a credit card for emergencies, choose one with a low standard interest rate. In this case, choose a credit card that offers a low-interest rate all of the time, not just on promotional balances. This credit card is your defence against emergency purchases, and the ongoing low-interest rates mean you won’t be dinged on interest too badly if you have to carry the balance over several months.

What to Look for in a Low-Interest Credit Card

  • Annual fees: In all of the scenarios listed above, make sure to take into consideration the annual fee for the credit card. A higher annual fee may offset any savings in interest when you transfer a balance or make a big purchase on the credit card.
  • Balance transfer promos: If you are considering transferring a balance onto a low-interest credit card, you should also take special care to evaluate the promotional interest rate and the term. If the term is too short, you’ll end up paying higher interest rates on any remaining debt. Be honest with yourself about how much debt you can pay off during that time, and pick a credit card with a promotional term that matches your capabilities.
  • Hidden fees: sometimes balance transfer credit cards charge a “balance transfer fee” when you transfer your balance. This fee can be between 1.00% – 3.00% of the balance. Make sure to take this into account when evaluating your options, because it may change which credit card best suits your needs. You can usually find this information in the fine print on the credit card’s website.

Just remember that low-interest credit cards are great options for paying off outstanding debt or carrying debt in an emergency, but they should be temporary measures. If you prioritize paying off your balance every month and get into the habit of maintaining a zero balance, a cash back credit card or travel rewards credit card may be a better option to maximize your spending.

The Best Low-Interest Rate Credit Cards in Canada

Credit Card Annual Fee Interest Rate Balance Transfers RateMinimum Income Credit Score Required Apply
American Express Essential Card$08.99%1.99% for six monthsN/AFair - goodApply
Scotiabank Value Visa$2912.99%0.99% for six months$12,000Fair - goodApply
MBNA True Line MasterCard$012.99%2.99% for six months, conditions applyAny amountFair - goodApply
MBNA True Line Gold MasterCard$398.99%1.99% for six months, conditions applyAny amountFair - goodApply
BMO Preferred Rate MasterCard$2012.99%3.99% for 9 months$15,000N/AApply
TD Emerald Flex Rate Visa$258.20% - 12.75%N/AAny amountN/AApply

American Express Essential Credit Card

Annual Fee: $0
Purchase Interest Rate: 8.99%
Balance Transfer Interest Rate: 1.99% for six months
Annual Income:  $15,000 per year

The AMEX Essential credit card is hands down the best low-interest credit card to keep in your wallet as a backup credit card. With no annual fee, you don’t have to pay to keep this credit card in good standing, which means you can apply and keep it on hand for those emergency purchases or for times when you expect to carry a balance. Here are some of the cardholder benefits:

  • Lowest interest rate: 8.99% makes this one of the lowest credit card interest rates you’ll find in Canada, outside of promotional rates. Most other low-interest credit cards charge around 12.99%.
  • Great promo for balance transfers: Carrying a balance on another credit card with higher interest? Transfer the balance to your AMEX Essential Credit Card and pay just 1.99% interest for the first six months. After the period ends, your interest rate goes up to 8.99%, which is still pretty low.
  • Purchase protection: get purchase protection for the first 90 days after purchase and buyer's assurance which doubles the manufacturer's warranty for up to one year.
  • Insurance: Flights booked with this credit card are covered by travel accident insurance up to $100,000.

Scotiabank Value Visa

Annual Fee: $29
Purchase Interest Rate: 12.99%
Balance Transfer Interest Rate: 0.99% for 6 months
Annual Income:  $12,000 per year

If you tend to carry a balance every month, the Scotiabank Value Visa is your best bet. It offers a fixed rate — which generally means that the interest rate will not suddenly increase. Here are the other cardholder benefits:

  • Affordable annual fee: The annual fee is $29 per year, but the interest savings easily offset that cost if you plan to carry a balance with this credit card.
  • Low-interest rate: At 12.99% for purchases and cash advances, this card has one of the lowest interest rates on the market. For example, if you carried a balance of $3,000 on this credit card, you would pay $32.03 per month in interest charges. If you carried that balance on a credit card charging 19.99% interest, you would pay $49.29 per month. After just two months you’ve saved enough money in interest to pay for the annual fee.
  • Exceptional balance transfer promo: If you transfer a balance onto this credit card, you’ll only pay 0.99% interest for the first six months. After that, the remaining balance will be subject to the 12.99% interest rate.
  • Other perks: When you book an AVIS car rental with this credit card, you’ll get a 25% discount.

MBNA True Line Mastercard

Annual Fee: $0
Purchase Interest Rate: 12.99%
Balance Transfer Interest Rate: 2.99% for 6 months
Annual Income:  Any amount

If you are carrying a balance on another credit card and you’re looking for a balance transfer credit card with a low-interest rate, the MBNA True Line MasterCard is an excellent choice. The benefits of this credit card include:

  • Low-interest rate on balance transfers: It offers 2.99% interest on balance transfers for six months. The regular purchase interest rate of 12.99% applies on balances remaining after the promotional period expires or if you miss a payment.
  • No annual fee
  • No minimum income requirement
  • 24/7 customer service
  • Around the clock fraud protection
  • Use of over 1 million ATMs for cash advances

One thing to note: the cash advance interest rate on this credit card is 24.99% – so it's not worthwhile if you take cash advances on your credit card regularly.

MBNA True Line Gold MasterCard

Annual Fee: $39
Purchase Interest Rate: 8.99%
Balance Transfer Interest Rate: 1.99% for 6 months
Annual Income: Any amount

Tied for second, the MBNA True Line Gold MasterCard is the upgraded relative of the MBNA True Line Mastercard, but it may be more appealing for a few different reasons. Here are the specs:

  • Low-interest rate: This card has a $39 annual fee, but with that comes a lower interest rate on regular purchases: 8.99%.
  • Excellent balance transfer promo: If you are transferring a balance, you only pay 1.99% at all for the first six months. Since interest charges can easily be hundreds of dollars per month on a regular credit card, this promotional rate could be a huge help if you're paying off debt.

This credit card, in particular, is a good choice if you aren’t sure you can pay off the entire balance during the six-month promotional period. If you have a remaining balance at the end of the period, it will be subject to the regular 8.99% interest rate, which is still a pretty low rate. Take note: be careful with cash advances with this credit card because the interest rate on those is a whopping 24.99%.

BMO Preferred Rate MasterCard 

Annual Fee: $20
Purchase Interest Rate: 12.99%
Balance Transfer Interest Rate: 3.99%
Annual Income: $15,000 per year

If you’re looking for card with a competitive interest rate on regular purchases, along with a low annual fee and a promotional balance transfer rate, the BMO Preferred Rate MasterCard is a good option. Here are the benefits for cardholders:

  • Excellent interest rates: 12.99% on regular purchases and cash advances, which is significantly lower than most standard credit cards.
  • Balance transfer promo: A promotional interest rate of 3.99% on balances transferred for the first nine months, but there is a 1% fee for transferring balances, which means the interest rate is effectively 4.99%.

The BMO Preferred MasterCard comes with the standard protections you expect from a credit card including extended warranty coverage, which doubles the manufacturer’s warranty period up to one year and purchase protection, which insures your purchases against theft or damage for 90 days.

TD Emerald Flex Rate Visa

Annual Fee: $25, waived the first year
Purchase Interest Rate: TD Prime + 4.50% up to TD Prim + 12.75%
Balance Transfer Interest Rate: N/A
Annual Income: Any income

This an interesting take on a low-interest credit card. Instead of just offering a flat fee interest rate, the TD Emerald Flex Rate Visa’s purchase interest rate is variable. It is tied to the TD Prime Rate and varies depending on your creditworthiness. Here's how it works:

  • Customers with a good credit score will qualify for a purchase interest rate as low as TD Prime + 4.50%. TD’s Prime Rate is currently 3.95%, which means the lowest possible interest rate is 8.45%.
  • Less credit-worthy applicants could qualify for an interest rate at TD Prime + 12.75%, which equals 16.70%.

It’s important to note that the interest rate is tied to the prime rate, which is variable. That means if TD Bank raises their prime rate, your interest rate on your outstanding debt will also increase. Interest rates in Canada are currently trending upwards, so consider that when applying for this credit card. But if you've got an excellent credit rating, this is a good option if you're looking for a credit card with a variable rate.

The Bottom Line

Having a low-interest rate credit card in your wallet will save you oodles of dough if you're paying off debt or carrying a balance each month. It'll put more money back into your wallet, even when you pay a modest annual fee. Just keep in mind that some of these credit cards offer a promotional low-interest rate for a set time period. But if you make it your mission to pay off your credit card debt fast, this shouldn't be a deal breaker.

The following two tabs change content below.

jordann Brown

Jordann Brown is a millennial money expert and personal finance blogger based in Nova Scotia, Canada. Jordann is the founder of the popular personal finance blog, My Alternate Life, and she frequently appears as an expert in Canada media. When she's not writing about money, you can find Jordann renovating her 100-year-old home with her husband, walking her rescue dog, or tweeting about money.

Leave a Comment