Low interest credit cards in Canada

The table below ranks low-interest credit cards by the purchase rate each card’s provider lists for residents outside Quebec, and the lowest purchase rate in this table is that of the Desjardins Flexi Visa. Cash advance and balance transfer rates have their own columns, since a card can charge more on a cash advance than on a purchase. Promotional rates are not ranked, and the card’s page at its provider shows its current offers.

Low interest credit cards, ranked by purchase rate

These low-interest cards are in order of purchase rate, lowest first, and a cell adds the Quebec rate where the card’s provider states a different one for Quebec residents.

A dash means this table shows no figure for that card. Welcome offers, first-year fee waivers and fee rebates tied to a bank account, banking package, profession or another card are not included.

Cards whose rate is tied to a prime rate are in their own table below. The Scotiabank Platinum American Express Card, a premium card with a $399/year annual fee, lists a 9.99% purchase rate; it is ranked with the premium cards, not here.

This card is issued by Desjardins, whose page for it lists the purchase rate and the cash advance rate shown above together with no annual fee.

MBNA has a separate page for this card for Quebec residents, and the cash advance rate listed there is not the one on its main page; the Quebec line above gives MBNA’s Quebec terms. The MBNA True Line Mastercard, without “Gold” in its name, is a different card with its own rates, in the table and below.

TD states a separate purchase rate for Quebec residents once a promotional period ends, printed in the purchase rate line. TD’s cardholder agreement treats a balance transfer as a cash advance transaction. Missing minimum payments can move this card to TD’s higher standard rates, on the terms in the line above.

This card has no annual fee, and its balance transfer rate is higher than that of the MBNA True Line Gold Mastercard.

Fixed rates and prime-linked rates

A fixed rate is a set percentage the provider states for the card, while a prime-linked rate is a prime rate plus a margin. These cards have prime-linked rates:

Welcome offers, first-year fee waivers and fee rebates tied to a bank account, banking package, profession or another card are not included.

TD calls its rate on the TD Emerald Flex Rate Visa Card a variable rate. How TD sets it: TD Prime plus one of six fixed margins (4.50%, 6.25%, 8.75%, 10.25%, 11.75% or 12.75%) set by your credit assessment, the same on purchases and cash advances. TD’s page for the TD Emerald Flex Rate Visa Card says the card is no longer available for new applicants. National Bank’s rates on the National Bank Syncro Mastercard each have a minimum rate, printed in the table. The prime rates themselves are not printed on this page.

Purchase, cash advance and balance transfer rates

One card can charge different rates on purchases, cash advances and balance transfers, which is why the ranking shows each in its own column; FCAC gives an example. For example, you may pay 19% interest on regular purchases and 22% on cash advances or cash-like transactions. Rates for specialized and retail credit cards may be higher.

Interest also starts at different times: FCAC’s grace period does not reach cash advances or balance transfers. Card issuers give an interest-free grace period to pay for the previous month's purchases, beginning on the last day of the billing period, and federally regulated financial institutions must provide at least 21 days. It doesn't apply to cash advances, cash-like transactions and balance transfers, and interest applies if the balance isn't paid in full by the due date. The full rule is on how credit card interest works.

On some cards in the table, the cash advance rate also applies to balance transfers. TD’s cardholder agreement treats a balance transfer as a cash advance transaction; Scotiabank’s page for the Scotiabank Value Visa Card says its cash advance rate applies to balance transfers; and RBC’s page for the RBC Visa Classic Low Rate Option lists its cash advance rate as including balance transfers. For that RBC card, the cash advance fee RBC states is $5 per transaction (stated in RBC's introductory offer FAQ for cash advances, which include balance transfers). FCAC notes that a fee may also apply each time you get a cash advance; cash advances have their own page.

Missing required minimum payments can raise a card’s interest rate, and FCAC says the increase can differ by type of card and by issuer. TD’s terms for its card are in the entry above; what else follows a missed credit card payment has its own page.

What a 0% or introductory rate means

An introductory rate is a low rate for a limited time, and FCAC describes how these offers usually work. Generally, the low interest rate will apply for a limited time, usually 6 to 12 months. The rate will increase once the introductory period ends. In some cases, the introductory rate ends as soon as you go over your credit limit or make a late payment.

FCAC says federally regulated card issuers must give you these details about an introductory rate:

• the date the low rate ends
• the kinds of transactions it covers
• other fees or conditions that come with it
• the standard rate you pay once the low-rate period ends

A provider’s own terms say how its offer can be lost. For example:

• On the RBC Visa Classic Low Rate Option’s introductory offer: RBC says that if you miss a minimum payment by the due date and have not paid it before the next statement is prepared, or change your card to another type before the offer ends, you lose the introductory rate, and what remains of the transferred balance is charged the cash advance rate.
• On the TD Low Rate Visa Card’s promotional purchase rate: TD says that if it does not receive the full minimum payment by the due date shown on the statement, or by the new statement date, you lose the benefit of the promotional rate.

TD and MBNA each advertise a 0% promotional rate on some cards. Offers to move a balance from another card are covered on balance transfer credit cards.

What counts as a low credit card interest rate?

In the ranking above, purchase rates for residents outside Quebec run from 10.90% to 13.99%. The cash back cards on best cash back credit cards that state a single purchase rate list rates from 20.90% to 21.99% for residents outside Quebec.

FCAC ties the importance of the rate to how the card is used. A credit card’s interest rate may be an important factor if you regularly carry a balance. It adds that the rate may matter less to someone who pays the balance in full every month and doesn’t take cash advances or make cash-like transactions. On low-rate cards with a fee, FCAC says: Some low-rate cards charge an annual fee. Even if there is a fee, a low-rate card may be a better option.

Asking for a lower rate

FCAC’s teaching material for post-secondary students takes up this question. FCAC's credit and debt module for post-secondary students answers true to "My credit card balance is high. I should call my bank to negotiate the interest rate", adding that making your credit card payments on time gives you leverage to ask for a lower interest rate. More on credit scores.

What a lower rate saves on a balance you carry

FCAC compares paying off a $4,000 balance over one year on a standard card at 21% with no annual fee and on a low-rate card at 9% with a $50 annual fee. It puts the interest paid at $472 on the standard card and $199 on the low-rate card. In this example, you'll pay $273 less in interest with the low interest rate card. This is even with the $50 annual fee. Adding each card’s annual fee to FCAC’s interest figures, this page’s arithmetic gives a total $223 lower on the low-rate card. FCAC notes that this example assumes you don't use your credit card while you pay down your balance.

Low interest card or balance transfer card?

A low-interest card’s rates are the ones in the table above. A balance transfer instead moves a balance from an old card to a new one, which FCAC says generally has a lower rate, with a promotion that usually lasts a set period and a fee that is usually a percentage of the amount moved. Balance transfer credit cards has the details and a payoff calculator.

When a line of credit costs less

FCAC says a line of credit usually carries a lower interest rate than a credit card, and that its rate usually varies, going up or down over time. Line of credit vs credit card compares the two, and line of credit rates are compared in the debt section.

How this ranking works

The ranking lists personal low-interest cards from this site’s card data whose provider states a fixed purchase rate. Student cards and business cards are ranked on their own pages, and the prime-linked cards chosen for this page are in the second table. Cards are ordered by the purchase rate for residents outside Quebec, lowest first; equal rates keep the order of the site’s data, and the pick in the opening lists tied cards together. Where a provider states a Quebec rate for a card, the cell shows it beside the rate used for the order. Promotional rates and other offers are not part of the order. How the tables pick cards from this site’s card data, and print a dash where no checked figure is held, is on best credit cards.

Related

• No-fee and low-interest cards: this group’s front page, with cards that have no annual fee.
• Balance transfer credit cards: moving a balance, with a payoff calculator.
• How credit card interest works: how interest is charged on a card.
• Credit card cash advances: limits and fees.
• How to choose a credit card: the steps and the card types.