Low-Interest Rates Cards in Canada: The Best Three

You want to build up your credit, but you don't want to enter a debt-spiral. If you're in Canada, here are some cards to keep your eye on.
October 29, 2019
8 mins read

Picking a credit card among the many existing alternatives is difficult. There are so many credit cards issued by banks and financial organizations that understanding the differences between them can present a real challenge. How can we remember what percentage each of the cards charge and what bonuses banks give when we apply for any of them? How can we remember what initial deposits each of the existing credit cards requires? With such a rich arsenal of credit cards, picking the right card for yourself is justifiably hard.

Conscious of the problem that customers face while selecting a credit card, we have decided to focus on one type, which seems most appealing to people wanting to save as much money as they can. The is the low APR interest cards. In the paragraphs below, we not only explain what low interest credit cards are but also list several that enjoy the most popularity in Canada.

Those of you who travel from Canada to other parts of the world or like to visit the North American country might be interested in ordering another kind of credit card — the one that does not charge foreign transaction fees when you swipe it abroad. Read how to correctly choose a no foreign transaction fee credit card in Canada and order the card that best suits your traveling needs and purposes.

It goes without saying that carrying balances on your card is not a good idea. Credit card balances rack up interest charges, which damages your budget and your ability to invest and save. If you continue ignoring your growing credit card balance, you might need to seek professional advice or, in the worst-case scenario, file for bankruptcy. Neither development is, obviously, desirable.

Yet however unwilling we might be to accrue balances on our credit cards, life sometimes brings us unpleasant surprises that force us to do so. Our apartments or cars suddenly require repairing or our bodies call for medical treatments not covered by insurance. In these and similar cases, we charge expenses to our credit cards, even though we know that it will not be easy or quick to pay off any created balance.

When life demands unexpected large payments from us, low APR credit cards become helpful. With this type of credit card, it is easier to carry balances from month to month, because they do not quickly accrue interest. Their carried balances thus grow much slower than on other credit cards. If your financial situation obliges you to carry balances from month to month and you want to pay for them as little as possible, you should consider ordering a low APR credit card.

There are many cards with a zero percent intro APR period, several of which are discussed below. For best results, choose the card with an introductory interest-free period longer than a year. If a balance on your card is constant, look for a card with a low ongoing interest rate. It will serve you best in the long run.

If you reside in Canada, consider TD Emerald Flex Rate Visa. What makes this credit card a good choice is that it does not simply offer a flat fee interest rate. The TD Emerald Flex Rate Visa card’s purchase interest rate varies, because it is tied to the TD prime rate. Its rates also depend on credit card owners’ credit assessments. For example, if you have a good credit score, you may get 8.45% interest rate (3.95% of TD Prime Rate plus 4.50%). If your credit history is less impressive, you will get an interest rate of 16.70% (3.95% of TD Prime Rate plus 12.75%).

As you see, the interest rate is always tied to the prime rate. Therefore, if TD Bank decides to raise its prime rate, the interest you pay on your balance will also rise. But do not worry: Prime interest rates have long been low in Canada. Nor are there signs that they are going to rise in the near future. If you order TD Emerald Flex Rate Visa, you have good chances to save a large amount of money. The annual fee that TD Emerald Flex Rate Visa charges is also low: only $25 a year.

Another card to consider, if you carry a balance every month, is the Scotiabank Value® VISA. It is ranked as the best fixed-rate credit card in Canada. Its annual fees are only $29, while its competitive interest rate is 12.99%. Make your calculations: Suppose your balance is $3,000. With the Scotiabank Value® VISA, you will pay $32.03 per month in interest charges.

With the majority of credit cards in Canada, you pay 19.99% interest rate. This means that with any other credit card, you would pay $49.29 per month. Arithmetic shows that just within two months, you can save enough money in interest to pay your annual fee of $29 when you use the Scotiabank Value® VISA. 

What is also attractive about the Scotiabank Value® VISA is that you pay only 0.99% interest for half a year if you transfer a balance onto this credit card. After six months, you will pay the established 12.99% interest rate. 

Suppose now that you have a balance on your credit card and want to transfer it to another card. In this case, you need a balance transfer credit card with a low-interest rate. The best example of such a card in Canada is the MBNA True Line® Mastercard®.

This card is your best bet because it offers you zero interest for the first 10 months when you transfer the balance onto it. But you need to make this balance transfer within 90 days of the account opening. After the promotional period expires, you will pay 12.99% interest, which, as we have shown above, is also comparatively low. If you miss a payment within a promotional period, you will also pay 12.99%.

There are other credit cards in Canada that offer low interest rates on your outstanding payments. Talk to financial advisors in your bank before applying for any of them. Even though all of them offer low interest rates on your balances, some of them might be better than others.

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