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In Canada, the variety of credit card options can be dizzying at times. Some have points, benefits, offer travel, insurance, you name it.
However, some cards come with fees, and some don’t, which leads us to the following question:
What is a no-fee credit card?
Simply put, it’s a credit card without a yearly fee. Aside from that, it operates the same way as cards with fees. It used to be that no-fee cards didn’t really come with any rewards the way other cards do. But that has changed as competition has grown and consumer demands have changed. Many no-fee cards do offer rewards (sometimes at a lower value than cards with fees).
Despite carrying the ‘no-fee’ moniker, these cards may still have fees associated with them, including:
| First year value* | Credit score required | Winner | ||
|---|---|---|---|---|
| $409 | Fair | Tangerine World Mastercard | ||
| $645 | Good | MBNA Rewards Platinum Plus® Mastercard® |
*The RATESDOTCA Best of Finance methodology assumes the cardholder spends an average of $2,000 a month on their card to determine the first-year value. The calculation includes all welcome bonuses and promotional offers at the time of publishing.
Just because a card doesn’t charge an annual fee doesn’t mean it skimps on rewards. Many no-fee credit cards offer hundreds of dollars in cash back for making everyday purchases and feature additional benefits like shopping coverage or exclusive offers.
We compared the top no-fee cash back credit cards using our Best of Finance methodology and ranked the cards that provided the highest first-year value.
| First year value* | Credit score required | Top features | ||
|---|---|---|---|---|
| $409 | Fair | Earn 2% back in up to three categories of your choice. | ||
|
Runner up |
$383 | Good | Earn 3% cash back on your first $500 spent on groceries. | |
| $468 | Good | Earn 2% cash back on gas and grocery purchases. |
Winner: Tangerine World Mastercard®
The Tangerine World Mastercard® offers cardholders the unique ability to set their own accelerated earning categories to maximize rewards. Cardholders can earn 2% cash back in up to three Money-Back Categories of their choice, with options including groceries, gas, furniture, home improvements and even parking. Cardholders can choose the spending categories that reward them the most and tailor them to keep up with ever-changing circumstances.
This card also features mobile device insurance and basic travel perks.
According to our Best of Finance methodology, the average Canadian would earn around $409 cash back in the first year.
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Annual fee
$0
Rewards
Earn 2% cash back in up to three categories of your choice. Start with two Money-Back Rewards Categories and earn a third when depositing your rewards into a Tangerine Savings Account. Get 0.5% unlimited cash back on everything else. You can also earn an extra 10% back* (up to $100) when you spend up to $1,000 in everyday purchases within your first 2 months.* (Apply by October 31, 2024).
Tangerine Money-Back Categories:
Change up your categories to match your spending style and maximize your rewards.
Earning potential
How does this card stack up to other rewards credit cards? We crunched the numbers using our Best of Finance methodology to see how much an average Canadian could earn over a 12-month period.
Rewards earned over a 12-month period = $309*
Tangerine special offer = $100
Annual fee = $0
Total earned over the first year (rewards and offers minus annual fee) = $409
*Assumes the cardholder deposits their rewards into a Tangerine Savings Account, earning the third category. The categories selected were groceries, recurring bill payments, and gas.
Ways you can redeem your points:
Insurance
Benefits
The BMO CashBack Mastercard®* offers members 5% cash back for the first three months*. After that, earn 3% back on grocery purchases, 1% back on recurring bill payments, and 0.5% back on everything else you buy. Earn even faster by adding additional cardholders for free.
According to our Best of Finance methodology, the average Canadian will have $383 within the first year.
Annual fee
$0
Limited time offer/bonus
Sign-up bonus expiry date: N/A - subject to change without notice
Rewards
Cardholders of the SimplyCash® Card from American Express earn 1.25% on all purchases, with no limit on how much cash back you can earn. As with all Amex cards, you get solid insurance and entertainment perks.
According to our Best of Finance methodology, the average Canadian would earn around $468 cash back in the first year and $368 a year thereafter.
Annual fee
$0
Annual fee for additional cardholders: $0
Limited time offer/bonus
Offer expiry date: N/A - subject to change without notice
Rewards
Access the top travel rewards programs with these no-fee cards. While this batch of cards have slightly lower earn rates than their counterparts with a fee, they still provide excellent value and great perks.
Plus, these cards can slide into your wallet as a primary or secondary credit card, and you don’t have to worry about another annual expense. You can use the card as often or sparingly as you like without having to justify its worth.
We compared the top no-fee travel credit cards using our Best of Finance methodology and ranked the cards that provided the highest value while also considering additional complimentary travel perks and benefits.
| First year value* | Annual fee | Top features | ||
|---|---|---|---|---|
| $645 | $0 | Earn 4 points†† for every $1 spent on eligible restaurant, grocery, digital media, membership and household utility purchases during the first 90 days (until $10,000 is spent annually in the applicable category) | ||
|
Runner up |
$527 | $0 | Earn 1 Aventra point for every $1 spend on gas, EV charging, groceries and drugstore purchases | |
|
Runner up |
$434 | $0 | Earn 2 points for each $1 spend on a wide variety of categories |
The MBNA Rewards Platinum Plus® Mastercard® offers cardholders four points for every $1 spent on eligible grocery, restaurant, digital media, membership, and household utility purchases for the first 90 days, up to $10,000 in each category. After, earn two points for every $1 spent in these categories ($10,000 annual cap in each category) and one point for every $1 spent on all other purchases.
This card also features $1,000,000 travel accident insurance, unexpected return home insurance and car rental accident insurance.
According to our Best of Finance methodology, the average Canadian would earn around $545 in rewards in the first year.
Annual fee
$0
Welcome bonus
5,000 bonus points†† after you make $500 or more in eligible purchases within the first 90 days (about 3 months) of your account opening. Plus, 5,000 bonus points†† once enrolled for paperless e-statements within the first 90 days (about 3 months) of account opening
And 4 points†† for every $1 spent on eligible restaurant, grocery, digital media, membership and household utility purchases during the first 90 days (until $10,000 is spent annually in the applicable category)
This offer is not available for residents of Quebec. For residents of Quebec, please click here.
Rewards
2x points for every $1 spent on:
1x point for every $1 spent on all other eligible purchases.
Earning potential
How does this card stack up to other rewards credit cards? We crunched the numbers using our Best of Finance methodology to see how much an average Canadian could earn over a 12-month period.
Rewards earned over a 12-month period + Welcome bonus = $340 + $205 = $545
Annual fee= $0
Total earned over the first year (rewards minus annual fee) = $545
Benefits
Insurance coverage
The CIBC Aventura Visa offers good value for globe-trotters who want to maximize travel rewards and minimize fees. The Aventura points you earn with this no-fee travel card never expire, there are no blackout periods, and you can choose from hundreds of airlines. Flights start from as low as 10,000 points (short-haul flights in Canada and the U.S.) Earn double the points when you spend on eligible grocery stores, gas stations, and electric charging stations up to a spend of $6,000.
According to our Best of Finance methodology, the average Canadian would earn around $527 in rewards in the first year.
Annual fee
$0
Limited time offer/bonus
Offer expiry date: NA – Ongoing Offer
Rewards
The Scotiabank®* American Express® Card is a no annual fee travel credit card that allows you to rack up Scotia Scene+ points for flexible redemption offers and enjoy exclusive Amex perks such as, Amex Invites and reserved tickets access. Not to mention you’ll also get access to Scotia’s exclusive travel agency.
According to our Best of Finance methodology, the average Canadian would earn around $434 in rewards in the first year.
Annual fee
$0
Limited time offer/bonus
Earn up to 5,000 bonus Scene+ points within your first year (that’s up to $50 towards travel)1
Offer expiry date: October 31, 2024
Rewards
*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.
Choosing the best no-fee credit card can be a daunting task. There are many choices with different rewards and benefit programs, as well as other transactional fees associated with them. Here’s a list of pros and cons to help you navigate the no-fee credit card environment.
| Pros | Cons |
|---|---|
|
No annual fees |
Fewer rewards or benefits per spend than cards with fees |
|
Can help you gain a credit history without extra expenses |
Not too many options for travel cards or travel perks |
|
They save you money |
If you fail to pay off the balance(s) each month the benefit of the no-fee may be negated |
|
Often come with welcome benefits |
You may have to spend a minimum amount within a certain time frame after opening the card to unlock its benefits |
|
Because there is no fee, they can act as a ‘back-up’ to other cards you might have |
Higher interest rates than cards with fees |
|
No-fee cards generally require a lower credit score than cards with fees |
|
Choosing the best no-fee credit card takes a bit of time and research. Sites like RATESDOTCA offer information on the best no-fee cards and what they offer. Here are some of the things you should consider when looking at the landscape of no-fee credit cards:
Got more questions about no-fee credit cards? We got you covered.
Each person has different financial and credit card needs. A debit card and no-fee credit card do different things for different circumstances. For example, a no-fee credit card can offer inexpensive credit, with the chance to earn rewards, and perhaps most importantly, create a credit history.
A Visa debit card does not allow you to earn rewards and does not help you build your credit. It simply allows you to make transactions with money you already have, rather than borrowing or using credit.
A no-fee credit card is great for people who are on a fixed income or have limited resources. The no-fee element helps them save money, while providing them with the benefits of using a credit card that can earn rewards and build a credit history.
It really depends. Each cards’ reward system is different. Some cards with cash back features can earn valuable rewards for your spending. But that might not be what you’re after. Perhaps. you are after travel or other rewards bonuses that you know make more sense to your lifestyle. Also, travel reward cards may have higher fees than cash back cards. It’s best to compare the cards on sites like RATESDOTCA and see what suits you best.
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