News & Resources

Pay Down Debt With the Best Low Interest Credit Cards

Nov. 14, 2012
3 mins
A person inserts their credit card into the point of sale terminal

Do you know how much your credit card is costing you? Beyond carrying a balance, many Canadian consumers don’t realize their card choice may be subjecting them to thousands of dollars more in payments each year. The reason behind this? Not knowing the conditions of the card upon sign up - or even choosing a card with features not properly suited to their spending habits. Many shoppers simply sign up for the first card they’re offered in the mail, or presented to them as a deal by their lender. They don’t realize that the right feature - like low interest credit cards - can minimize their payments, or even help them achieve better financial standing. And with so many different options available in the Canadian marketplace, it can be easy to go gaga for reward points when you should really be focusing on easier debt pay-down.

Are Those Points Really Rewarding You?

For some, rewards cards or cash back options are a great fit. If you’re a frequent-enough flyer, you may really benefit from cashing in those miles. Cash back cards, particularly those that offer payback on gas and groceries, can be a great way to score additional value on life’s necessities. All this changes, however, if your debt is sticking around. If you’re carrying a balance month to month, your reward perks are likely being wiped out by accumulating interest. If those points and miles also come at the cost of an annual fee, you’ll be even further in the hole. If you’re the type to only pay off the minimum balance each month, it’s time to face facts - your rewards credit card isn’t doing you any favours.

How to Really Make a Dent in Your Debt

If paying down debt is your top credit card goal, a low interest option could be your best bet. Often overlooked in favour of rewards bells and whistles, there are a number of cards on the market offering lower-than-average interest rates or rock-bottom balance transfer introductory periods. Switching to one of these offerings will get the interest monkey off your back - and you may be shocked at how much faster your debt shrinks. Here’s a look at how some of the best low interest cards stack up. Try one out - you have nothing to lose but interest!:

Visa Classic Low Rate Option

Offered by RBC, this card features an all-around 11.99% interest rate. That means both new sign-ups and previous card switchers can get in on the low interest deal. While there is an annual fee of $20, it’s low compared to the average monthly interest payment racked up by an average card AIR (19.99% is often the standard). This card also comes with Zero Liability Protection, which keeps your money safe in case of fraudulent activity.

True Line® Gold Mastercard®

This card has a $39 annual fee and offers a year-round AIR of 8.99%. Balance transfers will also get this rate, along with around-the-clock fraud protection. This offer is not available for residents of Quebec.

Scotiabank Value VISA

You’ll get a 11.99% rate with this option, in exchange for a $29 annual fee. Balance transfers, however, will score big with a 0.99% interest and cash advance rate for the first six months.

Penelope Graham

A first-time homeowner and newbie investor, Penelope Graham is the quintessential millennial, navigating the world of personal finance and wealth management. A self-professed monetary policy nerd, she follows the often-controversial housing market closely and specializes in mortgage, credit card and personal finance news.

Latest life insurance articles

10 Myths About Life Insurance Busted – Some May Surprise You
You may be young with no kids and no mortgage. Life insurance is for someone older, who has dependents right? Wrong. Let’s debunk life insurance myths and learn why everyone needs some form of coverage.
Will a Life Insurance Policy Cover Death Due to COVID-19?
Demand for life insurance may be on the rise during the pandemic as more Canadians consider buying a policy or reviewing ones they already have. If you’re thinking of applying for a policy, here are a few things to keep in mind.
How Does Vaping and e-Cigarettes Affect Life Insurance?
Many insurers may classify vaping in the same way they do smoking. If you smoke or vape, you can still qualify for a life insurance premium, but in all likelihood, you will pay a higher rate than someone who does not.