Credit Card Questions Canadians Ask
Answers to common Canadian credit card questions: best cashback cards, travel rewards, credit score requirements, and more.
The American Express Cobalt Card typically requires a credit score of at least 660 to 700 for approval, though individual results vary. Amex also considers your income, existing debt, and credit history length. A minimum annual income of $15,000 is generally expected. The Cobalt is classified as a charge card hybrid, meaning Amex may be slightly more flexible on credit score if your income is strong. To maximize your approval chances, ensure your credit utilization is below 30%, you have no recent missed payments, and you have at least 1 to 2 years of Canadian credit history. If your score is below 660, consider starting with the American Express Essential or SimplyCash card to build your profile before applying for the Cobalt.
Paying an annual fee for a credit card is worth it if the rewards, perks, and benefits exceed the cost of the fee. For example, the Amex Cobalt costs $155.88 per year but can easily return $500 or more in value if you spend regularly on dining and groceries, which earn 5x points. The Scotiabank Gold Amex at $120 per year includes travel insurance, airport lounge access, and 5x points on groceries. Calculate your expected annual rewards by multiplying your spending in bonus categories by the card's earn rate and point value. If the result exceeds the annual fee, the card is worth it. Many premium cards also include travel insurance, purchase protection, and extended warranty coverage that can save you hundreds. If your spending is minimal, stick with no-fee cards like the Tangerine Mastercard or Neo Financial card.
There is no single right number, but most financial experts suggest having 2 to 4 credit cards in Canada to optimize rewards and build credit. A common strategy is to have one card for groceries and dining (like Amex Cobalt), one for general spending (like a 2% cashback card), and one Visa or Mastercard for places that do not accept Amex. Having multiple cards can actually help your credit score by increasing your total available credit and lowering your utilization ratio, as long as you pay all balances in full each month. However, avoid opening too many cards in a short period, as each application triggers a hard credit inquiry. Space applications at least 3 to 6 months apart. The most important factor is paying every card on time and never carrying a balance at high interest rates.
The easiest credit cards to get in Canada are secured credit cards and cards designed for newcomers or those building credit. The Capital One Guaranteed Secured Mastercard requires no credit check and approves almost everyone with a refundable security deposit starting at $75. The Home Trust Secured Visa is another popular option. For those with limited credit history, the Neo Financial Mastercard and KOHO Mastercard have more lenient approval criteria than traditional bank cards. Canadian Tire Triangle Mastercard and the PC Financial Mastercard are also known for approving applicants with fair credit scores in the 600 range. If you are a newcomer to Canada, HSBC, BMO, and Scotiabank all have newcomer credit card programs that do not require Canadian credit history.
The best cashback credit cards in Canada depend on your spending habits. For no annual fee, the Tangerine Mastercard offers 2% cashback in 2 to 3 categories of your choice and 0.5% on everything else. The Neo Financial Mastercard provides up to 5% cashback at partner retailers with no annual fee. For cards with an annual fee, the Scotiabank Momentum Visa Infinite offers 4% on groceries and recurring bills, 2% on gas and transit, and 1% on everything else for $120 per year. The CIBC Dividend Visa Infinite provides similar category rates. The BMO CashBack World Elite Mastercard rounds out the top tier. For simplicity, the Rogers World Elite Mastercard offers a flat 1.5% cashback on all purchases with no annual fee, making it the best flat-rate option in Canada.
Yes, you can get a credit card with a 600 credit score in Canada, though your options will be more limited. A 600 score is considered fair, and several cards are accessible at this level. The Canadian Tire Triangle Mastercard, PC Financial Mastercard, and Capital One Low Rate Mastercard are known to approve applicants in the 600 range. Store cards and gas station cards also tend to have lower requirements. If you are declined for unsecured cards, secured credit cards like the Capital One Guaranteed Secured Mastercard or Home Trust Secured Visa require no credit check at all. To improve your score, focus on paying all bills on time, keeping credit utilization below 30%, and avoiding new credit applications for several months. Most people can move from 600 to 700 within 6 to 12 months of responsible credit use.
The best travel credit cards in Canada depend on your travel style and spending. The Amex Cobalt Card earns 5x points on food and drink (including groceries), making it the top earner for everyday spending that converts to travel. The Scotiabank Gold Amex offers 5x points on groceries and dining, plus comprehensive travel insurance, at $120 per year. For frequent flyers, the TD Aeroplan Visa Infinite is strong for Air Canada bookings with priority boarding and free checked bags. The CIBC Aventura Gold Visa earns competitive rates across all categories. For no annual fee, the Scotiabank Passport Visa Infinite earns 2 Scene+ points per dollar on all purchases with no foreign transaction fees, making it ideal for international travel. The BMO World Elite Mastercard and RBC Avion Visa Infinite are also strong contenders. If you travel frequently to the US or internationally, prioritize cards with no foreign transaction fees to avoid the typical 2.5% surcharge on purchases in other currencies.
Most Canadian credit cards charge a foreign transaction fee of 2.5% on purchases made in currencies other than Canadian dollars. This fee applies to online purchases from US or international retailers, as well as in-person purchases while travelling abroad. On a $1,000 USD purchase, you would pay approximately $25 in foreign transaction fees on top of the exchange rate. However, several Canadian credit cards have eliminated this fee entirely. The Scotiabank Passport Visa Infinite, HSBC World Elite Mastercard, Brim Financial Mastercard, Rogers World Elite Mastercard, and the Home Trust Preferred Visa all charge zero foreign transaction fees. The Wise (formerly TransferWise) debit card also offers mid-market exchange rates with minimal fees. If you travel internationally or shop from US websites regularly, a no-FX-fee card can save you hundreds of dollars per year. Some premium cards offset the foreign transaction fee with strong rewards earning rates, but a true no-FX-fee card is always the better deal for foreign currency spending.
To cancel a credit card in Canada, call the number on the back of your card and request account closure. Before cancelling, redeem any remaining rewards points (they are usually forfeited upon closure), pay off the full outstanding balance, and remove the card from any automatic payments or subscriptions. Request written confirmation of the cancellation and that the balance is zero. Check your credit report 30 to 60 days later to confirm the account shows as closed. Be aware that cancelling a credit card can temporarily lower your credit score by increasing your overall credit utilization ratio and reducing the average age of your accounts. If the card has a long history and no annual fee, consider keeping it open with a small recurring purchase instead of cancelling. If you are cancelling to avoid an annual fee, call the retention department and ask for a fee waiver or downgrade to a no-fee version of the card. Many banks will offer retention deals to keep you as a customer.
A balance transfer credit card allows you to move existing high-interest credit card debt to a new card with a lower promotional interest rate, typically 0% to 3.99% for 6 to 12 months. This can save you hundreds or thousands of dollars in interest charges while you pay down the principal. In Canada, popular balance transfer cards include the MBNA True Line Mastercard (0% for 12 months on balance transfers), the CIBC Select Visa (introductory low rate), and the Scotiabank Value Visa (low ongoing rate). Most cards charge a balance transfer fee of 1% to 3% of the transferred amount. To make a balance transfer worthwhile, calculate whether the interest savings exceed the transfer fee. Create a repayment plan to pay off the entire transferred balance before the promotional period ends, because the rate typically jumps to 19.99% to 22.99% after that. Avoid making new purchases on the balance transfer card, as payments are usually applied to the lowest-rate balance first. Do not close your old card, as that could negatively impact your credit score.
To maximize credit card rewards in Canada, use a multi-card strategy that matches each card's bonus categories to your spending. Use the Amex Cobalt (5x on food and drink) for groceries and dining, a 2% flat cashback card (like Tangerine or Rogers World Elite) for general purchases, and a no-FX-fee card (like Scotiabank Passport) for international and US purchases. Always pay your full balance monthly, as carrying a balance at 20% interest instantly erases any rewards earned. Use your credit card for all purchases including bills, subscriptions, and recurring payments to maximize points accumulation. Stack rewards by shopping through online portals (like Rakuten or Great Canadian Rebates) for additional cashback. Time large purchases to meet signup bonus requirements on new cards. Convert flexible points to travel for maximum value, as travel redemptions typically offer 1.5 to 2 cents per point versus 1 cent for cashback. Review your cards annually and do not hesitate to switch if a better option emerges. Product-switch within the same bank to avoid losing credit history length.
The best prepaid credit cards in Canada include the KOHO Prepaid Visa, which offers up to 2% cashback on purchases and free financial features, and the Stack Prepaid Mastercard, which has no foreign transaction fees making it ideal for travel and online shopping in foreign currencies. The Wealthsimple Cash card functions similarly to a prepaid card with interest on your balance. The Canada Post MyMoney Visa Prepaid card is widely available at retail locations for those who want a simple reloadable card. Prepaid cards are useful for budgeting because you can only spend what you load onto the card, making overspending impossible. They also work for online purchases, travel, and situations where you need a card number without a traditional credit check. The downside is that prepaid cards do not build your credit score, as they are not reported to the credit bureaus. If your goal is to build credit, consider a secured credit card instead, which requires a deposit but does report to Equifax and TransUnion.
The best credit card for groceries in Canada is the American Express Cobalt Card, which earns 5x Membership Rewards points per dollar on food and drink (including groceries), translating to roughly 10% return when transferred to Aeroplan. The annual fee is $155.88 but the value easily exceeds this for anyone spending $200 or more per month on groceries. For no-annual-fee options, the Tangerine Mastercard offers 2% cashback if you select groceries as one of your bonus categories. The PC Financial Mastercard is excellent for Loblaw-family store shoppers (No Frills, Zehrs, Loblaws, Shoppers Drug Mart), earning up to 45 PC Optimum points per dollar. The Scotiabank Gold Amex earns 5x Scene+ points on groceries with a $120 annual fee. The Neo Financial Mastercard offers up to 5% cashback at partner grocery retailers. For families with high grocery spending, the Amex Cobalt's earning rate is unmatched in the Canadian market.
A secured credit card requires a refundable security deposit that typically becomes your credit limit. For example, a $500 deposit gives you a $500 credit limit. You use the card like any regular credit card, making purchases and paying your balance each month. The key difference is the deposit, which protects the bank if you default. Secured cards report to the credit bureaus (Equifax and TransUnion) just like unsecured cards, making them an effective tool for building or rebuilding credit. In Canada, popular secured cards include the Capital One Guaranteed Secured Mastercard (minimum $75 deposit, guaranteed approval), the Home Trust Secured Visa (minimum $500 deposit, earns 1% cashback), and the Refresh Financial Secured Visa. After 6 to 12 months of responsible use, many issuers will graduate you to an unsecured card and return your deposit. To maximize credit building, keep your utilization below 30% of your limit, make all payments on time, and use the card for small recurring purchases like a streaming subscription.