The Best Credit Cards to Build Your Credit in Canada

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Written by SnappyRates Team

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If you have a bad credit score or you haven’t got a long credit history, getting access to loans and credit cards can sometimes be difficult.

You may have to pay higher interest rates, or lenders may simply refuse to lend to you.

As such, you might want to work on building your credit score. One way to do this is by using credit cards for bad credit.

All credit cards can help you build your credit in Canada if you make your monthly repayments on time. But some are easier to apply for if you have a bad credit score.

In this guide, we look at the best credit cards you can use to build credit if you have no or limited credit history in Canada.

Best Secured Credit Cards to Build Credit

Here are some of the best secured credit cards in Canada to build credit:

1. Neo Secured Mastercard

The Neo Secured Mastercard has guaranteed approval, no annual fees, and no over-limit fees, and you can earn unlimited cashback at a rate of 5% on average.

You can increase your limit when you want to. In addition, you can use the insights dashboard to keep track of your spending and add themed perks, including insurance and app subscriptions.

Neo Secured Mastercard

Rewards: Earn up to 15% cash back at thousands of Neo partners and never fall below 0.5% average cash back.

Welcome offer: $25 welcome bonus; Get an extra 15% cash back on your first-time purchases at participating merchants.

Interest rates: 19.99% to 24.99%

Annual fee: $0

Recommended credit score:
None

N/A

neosecuredmastercard cc-img

On Neo’s website

  • Earn 5% unlimited average cash back at Neo partners.
  • Earn up to 15% cash back on your first purchases at participating retailers.
  • Never fall below 0.5% cash back with Neo’s guarantee.
  • Guaranteed approval with no annual fees or income requirement.
  • Flexible credit limit that you can increase or decrease at any time.
  • Autopay feature, so you don’t miss a monthly payment.
  • Security funds are safely stored in your Neo account and are returned if you pay off your balance and close your account.
  • Deposit a minimum of $50 for your security funds.
  • No hard credit check is required.
  • No annual fees, minimum credit score, or minimum annual income are required.

Flexible security deposit and credit limit

Earn up to 15% cash back at select retailers

No annual fees, minimum credit score, or minimum income

No insurance coverage

Cash back rewards are not very high with some merchants

Your credit limit is your security deposit

Unlike other secured credit cards, the Neo Secured Mastercard rewards you with up to 15% cash back while helping improve your credit score. You choose your credit limit with the amount of security funds you deposit.

2. Home Trust Secured Visa Credit Card (No Fee)

There are two secured cards from Home Trust: one with a fee and one without. The no-fee card has an APR of 19.99%. You can control your spending limit based on the amount you deposit, from $500 to $10,000.

Home Trust Secured Visa

Rewards: Build your credit with a low interest rate.

Welcome offer: N/A

Interest rates: 19.99% for $0 or 14.90% for $59 annually

Annual fee: $0 or $59

Recommended credit score:
None

N/A

Home Trust Secured Visa

On Home Trust’s website

  • Pay no annual fee and get a 19.99% interest rate.
  • Pay a $59 annual fee for a lower 14.90% interest rate.
  • Your security deposit can be anywhere between $500 to $10,000.
  • Build your credit history by paying your balance on time each month.
  • Accepted in over 200 countries.
  • Manage your transactions and pay your bills online at Home Trust Visa Online.
  • No minimum income requirement.

Lower your interest rate by paying $59 per year

Flexible security deposit

Guaranteed approval

No rewards, points, or cash back

No insurance coverage

No option of switching to an unsecured card

The Home Trust Secured Visa Card is a basic secured credit card with a flexible security deposit. You either pay $0 for a 19.99% interest rate or can choose to lower it to 14.90% by paying a small annual fee of $59.

3. PC Financial Mastercard

There is no annual fee to use the PC Financial Mastercard. In addition, you can earn PC Optimum points on all spending and additional points for spending in certain stores. It’s a great option to earn reward points when you make purchases with your card.

If you have an income of $80,000 or more, the PC Financial World Elite Mastercard offers higher rewards and better perks.

PC Financial World Elite Mastercard

Rewards: Earn up to 45 PC Optimum points for every $1 spent.

Welcome offer: None

Interest rates: 20.97% for purchases, 22.97% for cash advances.

Annual fee: $0

Recommended credit score:
660
900

Good to Excellent

PC Financial World Elite Mastercard

On PC Financial’s website

  • Earn 45 PC Optimum points per $1 spent at Shoppers Drug Mart.
  • Earn 30 points per $1 spent at PC grocery stores, including No Frills, Loblaws, and Valu-Mart.
  • Earn at least 30 points per litre at Esso Mobil gas stations.
  • Earn 30 points per $1 spent at PC Travel.
  • Earn 10 points per $1 spent everywhere else.
  • Redeem 10,000 PC Optimum points for $10 off groceries and products at participating stores.
  • $1 million travel emergency medical insurance is included.
  • Car rental collision/loss damage waiver insurance is included.
  • Get identity theft assistance for free from legal experts.
  • Purchase assurance and extended warranty insurance are included.
  • Get access to a 24/7 concierge service to help plan events and travel.
  • A minimum of $80,000 personal or $150,000 household income is required to be eligible.

No cap on the number of points you can earn

Travel emergency medical insurance included

Identity theft insurance included

High annual income requirement

Only one type of travel insurance included

Points can only be redeemed on purchases at PC stores

The PC Financial World Elite Mastercard has no annual fees, yet a high earn rate of PC Optimum points on everyday purchases. A few travel benefits, like $1 million travel emergency medical insurance and identity theft assistance, are included.

4. Tangerine Money-Back Credit Card

You will need a fair rather than a poor credit rating to apply for the Tangerine Money-Back Credit Card. With this card, you can earn unlimited cashback without paying an annual fee. You can earn up to 2% in two categories of spending and 0.5% on everything else.

Tangerine Money-Back Credit Card

Rewards: Earn 2% unlimited cash back in up to 3 categories of your choice plus 0.50% on all other purchases.

Welcome offer: Get an additional 10% cash back after spending $1,000 in the first 2 months ($100 value).

Interest rates: 19.95% for purchases, balance transfers, and cash advances.

Annual fee: $0

Recommended credit score:
600
900

Fair to Excellent

tangerinemoneyback-cc-img

On Tangerine’s website

  • Earn 2% unlimited cash back on 2 categories of your choice, including groceries, restaurants, entertainment, and recurring bill payments.
  • Unlock an additional 2% cash back category when you deposit your money back into a Tangerine Savings Account.
  • Earn 0.5% unlimited cash back on all other purchases.
  • Cash back is earned automatically on everyday purchases and paid monthly.
  • 1.95% promotional balance transfer interest rate for 6 months.
  • Purchase assurance and extended warranty are included.
  • Track and categorize your spending with the Tangerine mobile app.
  • To qualify, you must make a minimum of $12,000 per year.

Earn unlimited 2% cash back in up to 3 categories

No annual fee

1.95% balance transfer interest rate for 6 months

No travel benefits or insurance

No physical bank branches as it is an online-only bank

The Tangerine Money-Back Credit Card has no annual fees and earns you 2% cash back on up to 3 categories. You choose the categories in which you spend the most to maximize your rewards.

5. Home Trust Secured Visa Credit Card (Annual Fee)

The Home Trust Secured Visa Credit Card (Annual Fee) is the same as the free version but with one key difference. In return for paying an annual fee of $59, you get a lower APR of 14.90%.

If you think you will carry a balance, this could work out as the better option because you could make a large saving on your interest payments.

6. Capital One Guaranteed Secured Mastercard

This card has guaranteed approval as long as you meet the conditions, one of which is that you can provide security funds of $75 to $300. In addition, it comes with a few benefits, including Purchase Assurance and some travel insurance coverage.

Capital One Guaranteed Mastercard

Rewards: Establish or repair your credit with guaranteed approval.

Welcome offer: None

Interest rates: 19.80% for purchases and balance transfers, 21.90% for cash advances.

Annual fee: $59

Recommended credit score:
None

N/A

Capital One Guaranteed Mastercard

On Capital One’s website

  • You are guaranteed approval for this credit card as long as you meet certain conditions.
  • Even if you’re not approved, you will automatically get a secured credit card.
  • Build or rebuild your credit history when you pay your balance each month.
  • Car rental collision/loss damage waiver and price protection services are included.
  • Purchase assurance and extended warranty are included.
  • Travel assistance, baggage delay insurance, and common carrier travel accident insurance are included.
  • No minimum income requirement to apply.

Guaranteed approval

Helps build your credit history

A few travel insurance benefits included

Higher interest rate than other Capital One credit cards

No cash back, travel, or rewards points

No welcome bonus

Build your credit history with the Capital One Guaranteed Mastercard. Although it has a higher interest rate than other Capital One credit cards, you are guaranteed approval, no matter your credit score or annual income. It also includes valuable travel benefits and insurance.

Related: Capital One Guaranteed Secured Mastercard Review

Best Prepaid Cards to Build Credit

Prepaid cards are another option to build credit in Canada. Here are two of the best:

7. KOHO Easy Mastercard

The KOHO Easy Mastercard is a popular prepaid card in Canada. You will earn 1% cashback on gas and grocery spending and can sign up for the Credit Building service for $10 monthly to build your credit.

KOHO Prepaid Mastercard

Rewards: Earn 1% cash back on all grocery and gas purchases and up to 5% cash back at KOHO partners.

Welcome offer: NA.

Interest rates: N/A

Annual fee: $0*

Recommended credit score:
None

N/A

kohoprepaidcard-img3

On KOHO’s website

  • Earn 1% unlimited cash back on grocery purchases and bill payments.
  • Get up to 5% cash back at select KOHO partners.
  • Earn 0.50% interest on your spending and savings account balance.
  • Build your credit history for an optional $10 per month.
  • No annual fee and no minimum balance.
  • Free, unlimited Interac e-Transfers.
  • No fees for ATM cash withdrawals in Canada (no KOHO fees).
  • Use the KOHO app to view your balance, cash back offers, and more.

Earn unlimited cash back on all purchases

Earn 0.5% interest on your balance

No annual fee and no minimum balance

Interest is capped at 0.5%

No insurance coverage

The KOHO Prepaid Mastercard rewards your everyday grocery spending with unlimited 1% cash back and up to 5% cash back at KOHO partners. There is no annual fee, no minimum balance, and you can send and receive free, unlimited Interac e-Transfers.

8. KOHO Extra Mastercard

The KOHO Extra Mastercard costs $9 per month or $84 per year. You can earn 2% cashback for groceries, transportation, and food and drink purchases and 0.5% on everything else. It also comes with no FX fees, priority support and other perks.

KOHO Extra Prepaid Mastercard

Rewards: Earn up to 2% unlimited cash back in up to 3 spending categories and 0.50% on all other purchases.

Welcome offer: NA.

Interest rates: N/A

Annual fee: $84 (or $9 monthly)

Recommended credit score:
None

N/A

KOHO Premium Prepaid Mastercard

On KOHO’s website

  • Earn 2% instant, unlimited cash back on 3 categories: groceries, eating and drinking, and transportation.
  • Earn 0.5% unlimited cash back on all other categories.
  • Earn up to 5% cash back at KOHO partners.
  • Earn 2% interest on your spending and savings account when you set up direct deposit.
  • Build your credit history for an optional $7 per month.
  • No FX fees when shopping abroad.
  • Price protection is included, so you get the lowest price on your purchases.
  • Priority user support if anything goes wrong.
  • One free international ATM withdrawal per month.
  • On-demand financial coaching.
  • Get a 30-day free trial before committing to the monthly or annual fee.
  • No minimum balance required.

Earn 2% cash back in 3 major categories

Get priority user support and price protection

No foreign exchange fees

$9 monthly or $84 annual fee

No insurance coverage included

For a small monthly or annual fee, the KOHO Premium Mastercard one-ups its no-fee counterpart by earning you 2% cash back on three categories many people spend a lot in: dining, transportation, and groceries. You pay no FX fees, get priority user support, and price protection on your purchases.

Related: Best KOHO prepaid cards in Canada.

How to Use Credit Cards to Build Credit

When you make purchases on a credit card and make your monthly repayment on time, you build credit.

Your repayments are reported to the credit bureaus in Canada. As long as you don’t miss them, you will improve your credit score.

The opposite is also true. If you don’t make your repayments on time, your credit can be adversely affected.

Always use your credit card with care. Only borrow what you need to, and try to pay off your balance each month to avoid paying interest.

Pros and Cons of Credit Cards to Build Credit

Pros:

  • If you pay off your balance in full, you can build your credit score without paying any interest.
  • Many credit cards come with rewards and perks you can take advantage of.
  • Some credit cards have no annual fee, making them a free option to build credit.
  • Secured credit cards are often available to people without good credit scores.

Cons:

  • Failing to pay off your balance in full can be expensive due to high-interest rates.
  • Many credit cards are only available to people with good credit scores.
  • Failing to make a payment on time can have a negative impact on your credit score.

How to Choose the Best Credit Card to Build Your Credit

It’s easy to get credit cards to build credit, but choosing one is not always easy.

When you are choosing a credit card to build your credit, you should first decide if you want a secured or unsecured credit card or whether you would prefer a prepaid card.

Then look at several factors, including the annual fee, interest rate, eligibility requirements, rewards and cashback and choose the card that best meets your needs.

Alternative Ways to Build Credit

There are several other ways to build credit, including:

  • Take out a personal loan and make your repayments on time.
  • Take out a small line of credit from a bank or credit union.
  • Make sure you pay all your bills on time each month.
  • Avoid applying for lots of credit cards or loans in a short time.
  • Only use a small amount of your total credit to keep your utilization rate low.

FAQs

What will build my credit the fastest?

Using secured credit cards or credit-building services like the one offered by Koho are quick ways to rebuild your credit.

Can my credit score go up 200 points in a month?

It will usually take a bit longer than a month to increase your credit score by 200 points. It will likely take anywhere from several months to a few years.

Which credit card is best for a starter?

You may want to start with a secured credit card if you have no credit history. Alternatively, student credit cards can be a good option for your first credit card if you are a student.

How long will it take to get my credit score from 500 to 700?

Increasing your credit score by 200 points will probably take several months or longer, but the exact amount of time will vary.

Bonuses & Deals for June

Free prepaid card with up to 5% cashback. No credit check & $20 bonus when you deposit $50 and complete first purchase.

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SnappyRates Team

The SnappyRates Team comprises personal finance writers who have reviewed and personally tested hundreds of financial products in the Canadian space. With over 20 years of combined experience to draw from and expertise in all things credit cards, banking, insurance, and mortgages, our goal is to provide you with the most comprehensive guides and resources to help you on your financial journey.

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  • One of the best savings rates in Canada.
  • Access to free unlimited chequing account with $400 bonus.
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