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2022's Best Low Interest Credit Cards for Canadians

Carrying a monthly balance? Find the lowest interest rate credit cards and make your balance more manageable.

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What are low interest credit cards?

If you tend to carry a credit card balance from month to month, having a low interest credit card will help you save money on interest charges. The average credit card interest rate is 19.99%, which is a high-interest rate for a recurring credit card balance. Having a high-interest credit card means you’re paying a lot of extra money on interest, money you could be saving if you switched to a low annual interest rate credit card. Like their name indicated, low interest credit cards come with much lower interest rates, sometimes as low as 4.99%.

Best of Finance Winner for 2022: Best Low Interest Credit Card

The best way to avoid paying costly interest charges is to pay off your credit card balance in full at the end of each statement period. However, that is not always possible, and there might be times when you carry a balance. If this does happen, interest will start to accrue on the unpaid balance at a set annual rate that compounds daily.

Most credit cards charge a standard annual interest rate of around 19.99% on purchases, which can add up quickly.

Although the welcome offers and perks of some credit cards can be enticing, mounting interest charges caused by carrying a balance will outweigh any advantages. Switching to a low interest credit card may offer cardholders the opportunity to tackle their debt faster and pay less interest. This decision can put cardholders in a healthier financial position in the future.

We compared low interest credit cards in Canada using our Best of Finance methodology and ranked the cards that provided the most potential savings. The average savings have been calculated against a monthly spending of $2k using a standard interest rate credit.

Click the card name from the table below to learn more.

  First year savings Annual fee Interest rate (purchases)
$181 $39 8.99%
$137 $25 11.9%
$275 $20 (First year waived) 12.99%
8.99%
$137
$25
11.9%
$275
$20 (First year waived)
12.99%

Winner: True Line® Gold Mastercard® credit card

For an annual fee of $39, the True Line® Gold Mastercard® offers cardholders an 8.99% standard annual interest rate on balance transfers and purchases, allowing you to quickly pay down any outstanding credit card balances. This card also includes complimentary shopping insurance.

To determine the average savings a consumer could expect with the True Line® Gold Mastercard®, we looked at the amount they would save in interest charges on an outstanding balance of $2,000.

Most credit cards charge an annual interest rate of 19.99% as compared to the True Line® Gold Mastercard®''s 8.99%. Using our Best of Finance methodology, we found the True Line® Gold Mastercard® would save the average Canadian around $181 annually

The estimated dollar amount of benefits you’ll accumulate based on your monthly spending and rewards preference
+ Welcome bonus
$0
+ Annual savings
$220
- Annual fee
$39
Total first year value
$181
True Line® Gold Mastercard® credit card

card image
Welcome bonus
$0
Annual savings
$220
Annual fees:
$39
Interest rates:
8.99% on purchases • 24.99% on cash advances
2022 Winner – Best Low Interest Credit Card
Low annual fee card includes complimentary shopping insurance
Details at a glance Collapse details
Welcome bonus
$0
Annual savings
$0
The estimated dollar amount of benefits you’ll accumulate based on your monthly spending and rewards preference
+ Welcome bonus
$0
+ Annual savings
$220
- Annual fee
$39
Total first year value
$181
Annual fees:
$39
Interest rates:
8.99% on purchases
24.99% on cash advances
2022 Winner – Best Low Interest Credit Card
Low annual fee card includes complimentary shopping insurance
Details at a glance Collapse details

Annual fee

$39

Interest rates

  • Purchases - 8.99%
  • Cash advances - 24.99%
  • Balance transfer - 8.99%

Benefits

  • Access your account anytime, anywhere with the MBNA Mobile App.
  • Convenient, secure and easy to use Apple Pay with your MBNA credit card
  • 24/7 fraud protection
  • Save with Avis Rent A Car and Budget Rent A Car

Insurance coverage

  • Extended warranty - 1 year
  • Purchase protection - 90 days

Runners-up: Best Low Interest Credit Card

HSBC +Rewards™ Mastercard®

The HSBC +Rewards™ Mastercard® provides cardholders with a rare combination of features — a low interest rate and rewards. For just $25 a year, cardholders can access an 11.9% interest rate on balance transfers, cash advances and purchases. Plus, earn two points for every $1 spent on eligible dining and entertainment purchases and one point for every $1 on all other purchases.

If a cardholder carried a balance of $2,000 on the card for a year, they would save $137 in interest with the HSBC +Rewards™ Mastercard® than if they carried the same balance on a card with a 19.99% interest rate (the standard rate for credit cards).

Annual fee

$25

Limited time offer/bonus

  • Apply for an HSBC +Rewards™ Mastercard® by April 4, 2022 and earn 30,000 Points ($150 travel value) when you spend $2,000 in the first 180 days of account opening* and get a 1st year annual fee rebate for Primary Cardholder*($25 value).

Offer expiry date: April 4, 2022

Interest rates

  • Purchases - 11.9%
  • Cash advances - 11.9%
  • Balance transfer - 11.9%

Rewards

  • Earn two points for every $1 spent on eligible dining and entertainment purchases.
  • Earn one point for every $1 spent on all other purchases.

BMO Preferred Rate Mastercard*

The BMO Preferred Rate Mastercard* offers cardholders a standard annual interest rate of 12.99% on balance transfers and purchases — the lowest interest rate offered by BMO on any of its credit cards. Plus, for a limited time, get a 3.99% introductory interest rate on balance transfers for nine months with a 1% transfer fee.

If a cardholder carried a balance of $2,000 on the card for a year, they would save $120 in interest with the BMO Preferred Rate Mastercard* than if they carried the same balance on a card with a 19.99% interest rate (the standard rate for credit cards).

Annual fee

$20

Limited time offer/bonus

  • Get a 3.99% introductory interest rate on balance transfers for nine months. A 1% balance transfer fee does apply. Plus, pay no annual fee for the first year.

Offer expiry date: December 6, 2022

Interest rates

  • Purchases - 12.99%
  • Cash advances - 12.99%
  • Balance transfers - 12.99%

How will a low interest credit card help me save money?

With a low interest credit card, you can pay off your credit card balance faster. This is because more of your monthly payment is being put towards your balance instead of the interest.

Standard credit cards come with an interest rate ranging from 19.99%-22.99%, while low interest cards can be as low as 4.99% to 15.99%.

Let’s see an example of how much interest you can save by switching to a low interest credit card.

Let’s say:

  • You owe a $1500 balance on your credit card
  • Every month, you choose to pay $150 towards your credit card statement
Example of how a low interest credit card can help you save money
Typical credit card Low interest credit card
Annual interest rate 19.99% 8.99%
Monthly interest rate 1.67% 0.74%
Months until your balance is paid in full 12 11
Total interest paid $154.49 $65.13

Is a low interest credit card right for you? Here’s what you need to know

What are the most common features of low interest credit cards?

Most low interest credit cards come with a no annual fee, and typically no rewards. This is because they are specifically designed to make it easier for you to pay your recurring credit balance. Most low interest credit cards do not offer perks though because the low interest rate itself is considered the perk.

When is the best time to use a low interest credit card?

The best time to use a low interest credit card is when you have a high recurring credit balance to pay off. While comparing low interest credit cards, look for a great promotional interest rate to take advantage of.

What is the difference between fixed rate and variable rate credit cards?

When you’re comparing low interest credit cards, you’ll notice that there are two types, fixed rate credit cards and variable rate credit cards.

A fixed rate low interest credit card has the same interest rate throughout the year, while the variable rate low interest credit card has a fluctuating interest rate. This variation depends on two important factors, one being the bank’s current prime rate and the second being your credit score. If you have a low credit score (below 600), you may not be able to take advantage of some of the interest rate discounts that come with the variable rate, low interest credit card.

  • Fixed rate credit cards - The benefit of fixed rate credit cards is that you’ll know what interest rate you’ll be charged every billing cycle. The rate of interest won’t be affected by the bank’s prime rate or your creditworthiness. Fixed rate credit cards usually come with limited-time balance transfer promotions you can use pay off your existing credit card debt.
  • Variable rate credit cards - The advantage of holding a variable rate credit card is that you can get a very low rate (even lower than a fixed rate card in some cases), but this usually only comes with excellent credit. The disadvantage is that you might be stuck with a higher rate if your credit score isn’t great or if the bank’s prime rate increases.

If you have a credit score lower than 670, stick to a fixed rate, low interest credit card.

RATESDOTCA may receive compensation when you click on links to those products or services. however, our content and calculations are objective and free from bias. The opinions expressed are purely those of RATESDOTCA; thus, partners are not responsible for any editorials or reviews that may appear. For current term and conditions on any advertiser or partner’s product, please visit their website.

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