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A low interest credit card is a great option, especially if you're trying to get rid of debt, carry a balance, or finance a new purchase. We compared all the best low interest credit cards in the Canadian market, and here are our top picks for 2020.

“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.

Summary: Best Low Interest Rate Credit Cards in Canada 2020

Credit Card Annual Fee Interest Rate APR ("AIR") More Info 
MBNA True Line® Gold Mastercard® credit card$398.99%Read OnVisit Site
MBNA True Line® Mastercard® credit card$012.99%Read OnVisit Site
TD Emerald Flex Rate Visa* Card$25Variable: 4.50% to 12.75% + TD PrimeRead OnVisit Site
HSBC +Rewards™ Mastercard®$25 (first year annual fee rebate)*11.9%Read OnVisit Site
CIBC Select Visa* Card$29 (first year annual fee rebate)*13.99%Read OnVisit Site
BMO® Preferred Rate Mastercard®*$20 (Waived the first year)*12.99%Read OnVisit Site
*Conditions apply.

MBNA True Line® Gold Mastercard® credit card 

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Tied for second, the MBNA True Line® Gold Mastercard® credit card is the upgraded relative of the MBNA True Line® Mastercard® credit card, but it may be more appealing. This card has an affordable $39 annual fee, but with that comes a low annual interest rate of 8.99% on purchases, balance transfers, and access cheques. That’s one of the lowest rates on the market.

This credit card is a good choice if you tend to carry a balance, potentially saving you big bucks in interest charges. If you have a remaining balance at the end of the period, it will be subject to an annual interest rate of 8.99% on balance transfers, which is still a low rate. Take note: be careful with cash advances with this credit card because the interest rate on those is a whopping 24.99%.

The Details

  • Annual Fee: $39
  • Minimum Income Eligibility: N/A
  • Credit Score Required: Fair to Good
  • Additional Perks: Low annual interest rate
  • Interest on Purchases: 8.99% | Interest on Cash Advances: 24.99% | Interest on Balance Transfers & Access Cheques: 8.99%
Learn more about the MBNA True Line® Gold Mastercard® credit card.

*This offer is not available for residents of Quebec.

MBNA True Line® Mastercard® credit card

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If you tend to carry a balance month-to-month, the MBNA True Line® Mastercard® credit card is another excellent choice. For starters, it has a standard annual interest rate of 12.99% on purchases, balance transfers, and access cheques – which is highly competitive. Did we mention that this card has no annual fee? One thing to note: the cash advance interest rate on this credit card is 24.99% — so watch out if you take cash advances on your credit card regularly.

The Details

  • Annual Fee: $0
  • Minimum Income Eligibility: N/A
  • Credit Score Required: Fair to Good
  • Additional Perks: Low annual interest rate
  • Interest on Purchases: 12.99% | Interest on Cash Advances: 24.99% | Interest on Balance Transfers & Access Cheques: 12.99%

Learn more about the MBNA True Line® Mastercard® credit card.

This offer is not available for residents of Quebec.

TD Emerald Flex Rate Visa* Card

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This is an interesting take on a low-interest rate credit card in Canada. Instead of just offering a flat fee interest rate, the TD Emerald Flex Rate Visa* Card’s purchase interest rate is variable. It is tied to the TD Prime Rate and varies depending on your credit assessment. Here’s how it works: customers with a good credit score could qualify for a purchase interest rate as low as TD Prime + 4.50%. Given that TD’s Prime Rate is currently 2.450% (as of March 30, 2020), it means:

  • The lowest possible interest rate is 6.95%.
  • Less credit-worthy applicants could qualify for an interest rate of 15.20% (TD Prime + 12.75%).

It’s important to note that the interest rate is tied to the prime rate, which is variable. That means if TD Bank raises its prime rate, your interest rate on your outstanding debt will also increase. But given that prime interest rates have been low in Canada, it can also mean that you end up saving a whack of cash in the long-run. If you have a good credit rating, this card is a great option for getting a rock bottom interest rate. We also love that the annual fee is very affordable at $25 and is $0 for subsequent Additional Cardholders.

The Details

  • Annual Fee:$25, $0 for subsequent Additional Cardholders
  • Income Eligibility:None
  • Credit Score Requirement:Good to Excellent
  • Additional Perks: Variable interest rate

Interest on Purchases: TD Prime + 4.50% to 12.75% | Interest on Cash Advances: TD Prime + 4.50% to 12.75%

Learn more about the TD Emerald Flex Rate Visa* Card.

*This offer is not available for residents of Quebec. For Quebec residents, please click here

HSBC +Rewards™ Mastercard®

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The HSBC +Rewards™ Mastercard® offers a rock bottom interest rate of 11.9% — one of the lowest in Canada. If that’s not reason enough to add this card to your wallet, here are other perks to entice you: there’s no annual income qualifier, the annual fee is very affordable ($25), and you’ll earn rewards for every eligible purchase charged to the card. Specifically, you’ll get 2 points for every $1 spent on eligible dining or entertainment purchases and earn 1 point for every $1 on all other everyday purchases. Redeem the points for whatever you fancy: travel, gift cards and merchandise, and financial rewards (yes, you can put your points towards your credit card balance or sock it in an HSBC savings account!).

In a new limited-time offer, new cardholders can Earn 20,000 Points ($100 travel value) PLUS a full annual fee rebate for the Primary Cardholder for the first year ($25 value).* Must apply by December 28, 2020. Conditions Apply.

The Details:

  • Annual Fee: $25
  • Minimum Income Eligibility: None
  • Credit Score Required: N/A
  • Welcome Offer: Earn 20,000 Points ($100 travel value) PLUS a full annual fee rebate for the Primary Cardholder for the first year ($25 value).* Must apply by December 28, 2020. Conditions Apply.
  • Additional Perks: Redeem points for travel, financial rewards, gift cards, merchandise, and more; extended warranty and purchase protection; optional travel insurance
  • Interest on Purchases: 11.9% | Interest on Balance Transfers & Cash Advances: 11.9%

*This offer is only available to residents of Canada other than the province of Quebec. (Quebec residents eligible for separate offer)

Learn more about the HSBC +Rewards™ Mastercard®.

CIBC Select Visa* Card

If carrying a balance is a possibility, the CIBC Select Visa* Card is a good option. For starters, it has a low-interest rate of 13.99% on purchases and cash advances, which can help you reduce interest payments and save you money. It also offers a promotional 0% interest rate for up to 10 months on balance transfers, with a 1% transfer fee. Plus, you’ll get a first-year annual fee rebate, making this a very enticing offer. If you’ve got high-interest debt on another credit card, this card is a good one for debt consolidation.

The Details

  • Annual Fee: $29 (first-year annual fee rebate)
  • Annual Interest on Purchases: 13.99% | Annual Interest on Cash Advances: 13.99%
  • Minimum Income Requirement: $15,000 household
  • Credit Score Required: Good
  • Welcome Offer: 0% interest rate for up to 10 months on balance transfers with a 1% transfer fee
  • Other Perks: Low-interest rate on purchases and cash advances

Learn more about the CIBC Select Visa* Card.

Conditions apply

Insurance coverage(s) included with CIBC credit cards are underwritten by Royal & Sun Alliance Insurance Company of Canada. You may contact the insurer at 1 866 363-3338 in Canada and the U.S or collect from elsewhere at 905 403-3338 or visit cibccentre.rsagroup.ca. Some insurance coverage(s) require purchase(s), common carrier fares, accommodations and other trip costs to be charged to the card to activate coverage. Other conditions may apply. For important information regarding coverage, eligibility requirements, benefits, pre-existing health/medical conditions, limitations and exclusions, see cibc.com/ca/credit-card/agreements-insurance.html and the insurance certificate(s) in your card package.

BMO® Preferred Rate Mastercard®*

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If you’re looking for a 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.

Cardholders can expect excellent interest rates: 12.99% on regular purchases and cash advances, which is significantly lower than most standard credit cards. Plus, right now, there is a promotional interest rate of 3.99% on balance transfers for the first 9 months (a 1% fee applies).

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

The Details:

  • Annual Fee: $20 (Waived for first year)*
  • Minimum Income Eligibility: $15,000 per year
  • Credit Score Required: Fair to Good
  • Welcome Offer: 3.99% interest on balance transfers for the first 9 months (1% transfer fee applies)
  • Additional Perks: Extended warranty and purchase protection
  • Other Card Details: Purchase APR: 12.99% | Cash Advance APR: 12.99%
Learn more about the BMO® Preferred Rate Mastercard®*

*Conditions apply.

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.

Why Choose a Low Interest Credit Card?

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.

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.

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.

We suggest that you also check out our list of the best credit cards in Canada.

More on the Best Credit Cards by Category:

Article comments

1 comment
Jessica says:

Credit card interest rates are only going to go up in the future, better to steer clear of accumulating bank card debt!
Though an informative article and invaluable article