Editors note: Advertisers are not responsible for the contents of this site including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their Web site.
Many millennials are “spooked” by credits cards, with just one in three carrying credit cards compared to the majority of older people. But there are many excellent reasons why every person should have some plastic in their wallet – and the best credit cards in Canada for first-time applicants.

If you’re a millennial, you’re way less likely to have a credit card than your parents but there are some real-world reasons why you need a credit card.

That’s the gist of recent research that has some banks and credit card companies worried. The shift, which sees only one in three millennials carrying plastic, has been attributed to many things: from rising college tuition to heavy student loans to a plain old aversion to debt.

In some ways, it’s hard to find fault. After all, spending within your means is a noble goal. But there are some practical reasons to get and use a credit card. Read on to find out how responsible credit card use can actually help you — and the best credit cards in Canada for first-time applicants.

What’s Behind This New “No Plastic” Trend?

Compared to their parents, millennials are using far less credit. A recent study found that just one in three in that age bracket use credit cards and that if they were using plastic, it was more likely to be pre-paid or debit cards. Further, those aged 18 – 24 are increasingly opting to pay with cash.

In some ways, this trend makes sense. After all, we’re talking about a generation of people who lived through the financial crisis, a group that has weathered steep increases in everything from rent to tuition.

In their quest to live debt-free, however, some in this group are foregoing valuable benefits. Next, we’ll discuss three key ways that responsible credit card use can actually help you reach your goals.

Why You Need a Credit Card

1.     Protections

It’s got to feel good to lay out a payment in cash, knowing that there is no interest to be earned, no debt to be accrued — but there are also no protections on that purchase. Credit cards typically include a variety of protections for their cardholders – protections you have simply because you paid with plastic. And if you’ve got the cash for the purchase, you’ve also got it to make a payment. Apply it to your card on time and you’ve only gained.

Let’s say you want to buy a cell phone. That’s a fairly hefty price tag. If you fork it over in cash to the store, you’re protected only insofar as the store policy allows. Buy your mobile on credit, and your card covers you if it’s faulty or not as advertised.


If you travel, rent cars, or make large purchases, chances are you’ve bought extra insurance coverage. But by using a credit card, you can often take advantage of their automatic policies for out-of-country medical or trip interruption, rental car, or extended warranties. Not only can you rest easy knowing you’re covered, but it could also save you hundreds of dollars per year. If you need to know all the reasons, read our article about “Is Travel Insurance Worth It?”

Zero liability/fraud protection
To be fair, you only need this if you use a credit card, but it’s good to know it’s there. These protections mean that if there’s unauthorized or fraudulent use on your card, you’re not liable for the purchase.  In contrast, there’s not much you can do if a thief steals cash from your wallet.

2.     Rewards

Those same researchers that discovered millennials’ avoidance of credit also noted that millennials like rewards — and the banks noticed.

Right now, there are loads of credit cards in Canada offering various kinds of rewards simply for using their product. Whether you want a percentage of cash back on your purchases, points towards rewards, or miles for travel, there’s a card out there for you. And, if you go for a no annual fee option (of which there are many!), these rewards are absolutely free.

3.     Build Credit History

Buying a house or a car might not seem like it’s in the cards right now, but chances are that it will be at some point in your life. If you have no credit history, you’re going to have a hard time convincing a bank to give you a mortgage. And, if you are successful, that mortgage interest rate is going to be way higher than it would be for someone with established credit.

Best Credit Cards in Canada for First-Time Applicants

These three reasons should convince you that it’s worth jumping into the credit card game, but what are the best cards for a first-time applicant? Don’t worry, we’ve got you covered.

Best Travel Rewards Credit Card in Canada

Apply Now

If there’s one thing Canadians love more than rewards, it’s travel—so why not combine the best of all worlds by using a credit card that gives you excellent travel rewards? Travel rewards can come in many forms, and the “best” credit card is going to depend on how you prefer to earn. That said, for an all-around excellent travel rewards credit card in Canada, consider the Scotiabank®* Gold American Express® cardJust by charging everyday purchases onto your credit card, you’ll earn:

  • 5X Scotia Rewards points for every $1 spent on eligible grocery stores, restaurants, fast food, drinking establishments, and entertainment.
  • 3X Scotia Rewards points for every $1 spent on eligible gas, daily transit, and select streaming services.
  • 1X Scotia Rewards point for every $1 spent on all other eligible everyday purchases.

Plus, for a limited time, this card has an enticing welcome bonus: new cardholders will receive 25,000 bonus Scotia Rewards points when they spent $1,000 within the first 3 months†. Scotia Rewards points are also easy to redeem: just login to the system and select the “Apply Points to Travel” option. Then just use your accumulated points to offset any travel cost (flights, rental cars, hotels, etc.) charged on your credit card. Rewards aside, you’ll also get some fantastic cardholder benefits, like no foreign transaction fees, comprehensive travel insurance, and Amex Front Of the Line® access.

The Details

  • Annual Fee: $120
  • Income Eligibility: Minimum of $12,000 annual income
  • Credit Score Required: Good to Excellent
  • Welcome Bonus: 25,000 Scotia Rewards points when you spend $1,000 in the first 3 months†
  • Other Perks: No foreign transaction fees, comprehensive travel insurance, Amex Front of the Line® access
  • Purchase APR: 19.99% | Cash Advance APR: 22.99%
Learn more about the Scotiabank®* Gold American Express® card.

Best Cash Back Credit Card in Canada

Apply Now

What if you could be paid in cash for using your credit card? Guess what? You can. Some cards offer a cash-back program that returns a percentage of your purchases to you—in cold, hard cash. Interested in having your credit card company pay you? Consider the Tangerine Money-Back Credit Card which has a fabulous cash back earn rate. This card comes with:

  • $0 annual fee
  • Unlimited cash back (no caps or tiers)
  • Earn 2% back on purchases in up to three categories and 0.5% back on everything else

Tangerine has come out with a truly innovative and simple credit card that earns you money. When you sign up, you choose two categories in which you want to earn 2% cash back. Automatically transfer those earning to a Tangerine Savings account, and you can bump that up to three categories. Every other purchase earns 0.5%, and unlike some other cash back cards, there is no limit to what you can earn. Your money is given back to you, automatically, with no minimums, every month. With no annual fee, there’s no way to lose with this credit card.

Learn more about the Tangerine Money-Back Credit Card

Best Low-Interest Rate Credit Card in Canada

Apply Now

Annual Fee: $25, $0 for subsequent Additional Cardholders
Purchase APR: TD Prime + 4.50% up to TD Prime + 12.75%
Cash Advance APR: TD Prime + 4.50% up to TD Prime + 12.75%
Balance Transfer Interest Rate: TD Prime + 4.50% up to TD Prime + 12.75%
Annual Income Eligibility: N/A

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

We’re really digging the TD Emerald Flex Rate Visa* because it’s incredibly innovative: instead of just offering a flat fee interest rate, the TD Emerald Flex Rate Visa* card’s purchase interest rate is variable. That means 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 will qualify for a purchase interest rate as low as TD Prime + 4.50%. Given that TD’s Prime Rate is currently 2.45%, it means:

  • the lowest possible interest rate is 6.95% (TD Prime + 4.50%).

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 wad 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 appreciate that the annual fee is very affordable at $25 (and $0 for subsequent Additional Cardholders).

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

Final Thoughts

Some Canadian Millennials are wary of credit cards—and with good reason. Nobody wants to carry debt. But by using only cash or credit cards, they may be missing out on perks, protections, and preparing for future purchases like mortgages. Before opting out completely from credit cards, you might want to see what companies are offering. (Spoiler alert: They’re offering cash, rewards, and protections—everything a millennial could want!) Choose wisely and you can get your credit card company working for you instead of the other way around.

The Best Credit Cards by Category:

Article comments

Laura says:

Great article! The negative concequences are so clear it is imporant to keep in mind the benefits. For the credit history this is huge. With a higher credit history you will be able negotiate a low interest rate on car and home loands which most people will need at some point. This amounts to thousands of dollars!

Great resource! Thanks for this