Credit card interest rates aren’t all the same. If you carry a balance, or if you expect to take on debt that will take some time to pay off, you might want to consider a low-interest credit card. The savings could be substantial: while most regular credit cards charge around 20% in interest, the cards listed below offer rates that can be half that, or less.
Credit card comparison tool
Compare your options with our interactive tool and get a sense of how much you could save on interest payments depending on the size of your balance.
Why trust us
MoneySense is an award-winning magazine, helping Canadians navigate money matters since 1999. Our editorial team of trained journalists works closely with leading personal finance experts in Canada. To help you find the best financial products, we compare the offerings from over 12 major institutions, including banks, credit unions and card issuers. Learn more about our advertising and trusted partners.
Why low-interest cards are a good option right now
A new report suggests an increasing number of Canadians are seeing their credit card balances balloon as the cost-of-living crisis and higher interest rates eat into household budgets. A TransUnion report published Tuesday said the number of Canadians paying only the minimum monthly amount on their credit card rose eight basis points to 1.3% in the first quarter compared with last year.
Read the full article: “Canadian consumer debt: How we’re paying for our credit cards”
Best low APR credit cards, in more detail
At a glance: The MBNA True Line Gold Mastercard has a regular purchase interest rate of 10.99%—that’s around half of what’s on a typical credit card. Plus, the $39 annual fee is manageable.
MBNA True Line Gold Mastercard
Annual fee: $39
Low interest rate: 10.99%
Welcome offer: This card does not have a welcome offer at this time.
Card details
| Interest rates | 24.99% on cash advances, 13.99% on balance transfers |
| Income required | None specified |
| Credit score | 660 or higher |
Pros
- Get up to nine authorized users for free.
- When you rent a car from Budget or Avis, you’ll save a minimum of 10% off the base rates.
Cons
- This credit card doesn’t offer much in the way of perks and benefits, and it does not have points or cash back rewards.
At a glance: The Flexi Visa from Desjardins credit union offers a low 10.90% interest rate. Plus it has perks like limited travel insurance, up to $1,000 in new mobile device insurance, and the ability to pay for larger purchases in monthly instalments.
Flexi Visa
Annual fee: $0
Low interest rates: 10.90% on purchases and 12.90% on cash advances
Card details
| Interest rates | 10.90% on purchases and 12.90% on cash advances |
| Income required | Not specified |
| Credit score | Not specified |
Pros
- It comes with travel insurance coverage that includes emergency medical, trip cancellation and lost or damaged baggage.
- Use this card to buy a new mobile device, and you get up to $1,000 to cover loss, theft, damage or mechanical failure.
- Access to Accord D through Desjardins, which may get you a quick approval for up to $50,000 in financing.
Cons
- While still a positive, the limited travel insurance only covers up to the first three days of your trip. If you are away for for longer, you’ll need to buy extra insurance.
At a glance: This low-interest card from MBNA gets you many of the same perks as the MBNA True Line Gold Mastercard—also on this list—with slightly higher interest rates. The advantage of this card is that it comes with no annual fee and a lengthy no-interest balance transfer.
MBNA True Line Mastercard
Annual fee: $0
Low interest rate: 12.99%
Balance transfer offer: earn a 0% promotional annual interest rate (“AIR”) for 12 months on balance transfers completed within 90 days of account opening, with a 3% transfer fee. This offer is not available for residents of Quebec.
Card details
| Interest rates | 24.99% on cash advances, 17.99% on balance transfers |
| Income required | None specified |
| Credit score | 660 or higher |
Pros
- The promotional balance transfer rate of 0% is in effect for a full year, which gives you a good amount of time to pay down outstanding debt.
- Add up to nine authorized users to the account for free (depending on which repayment plan you select for your purchase).
Cons
- Does not include insurance or other perks and benefits.
- There’s no annual fee, but you’ll pay slightly higher interest rates than with the comparable MBNA True Line Gold Mastercard.
At a glance: The only American Express card on this list, this no-annual-fee Essential credit card offers a low 12.99% interest rate. It also comes with Amex-related perks like Front-of-the-Line experiences, dining and entertainment, and special offers.
American Express Essential Card
Annual fee: Annual fee: $25
Low interest rate: 12.99% on purchases
Welcome offer: None
Card details
| Interest rates | 12.99% on cash advances |
| Income required | $15,000 per year |
| Credit score | 725 or higher |
Pros
- American Express cards give cardholders access to presale tickets, exclusive events and curated dining and entertainment experiences.
- It also offers Plan It, which allows you to pay off larger purchases in installments for a fixed monthly fee, which is based which repayment plan you select for your purchase.
Cons
- The included travel insurance is limited to up to $100,000 of accidental death and dismemberment coverage.
- Doesn’t include as many extras of other credit cards, such as these best travel insurance credit cards.
At a glance: With a very reasonable $29 annual fee and a 13.99% interest rate, the BMO Preferred Rate Mastercard will appeal to those who want to stick with a big bank—particularly current BMO customers. The welcome offer sweetens the pot.
Pros
- The promotional offer gives you a 0.99% balance-transfer interest rate for nine months and waves the annual fee for your first year.
- Get a BMO Performance chequing account, and you’ll never have to pay the annual fee for the BMO Preferred Rate Mastercard.
- Add another cardholder for free.
Cons
- This credit card does not offer insurance, rewards or other extras.
- The balance transfer promotion runs for nine months, which is not the longest offer among cards on this list.
At a glance: Unlike most credit cards, the National Bank Synchro Mastercard comes with a variable interest rate. You’ll pay an interest rate of 4% plus the bank’s prime rate (or 9.95%) on purchases. The Synchro credit card has the benefit of a lower interest rate than other cards, but it does carry the risk that your interest rate could rise in the future.
National Bank Syncro Mastercard
Annual fee: $35
Low interest rate: 4% + prime (9.95%) on purchases. Minimum of 9.95%
Welcome offer: This card does not have a welcome bonus at this time.
Card details
| Interest rates | 8% + prime (13.95%) on cash advances, 8% + prime (13.95%) on balance transfers (note that the minimum purchase interest rate for the card is 9.95% and the minimum balance transfer and cash advance rate is 13.95%) |
| Income required | None specified |
| Credit score | 660 or higher |
Pros
- The interest rates of 9.95% for purchases and 8% + prime (13.95%) on cash advances, 8% + prime (13.95%) on balance transfers are very competitive.
Cons
- While its purchase interest rate is still quite low, The minimum interest rate is higher than the fixed rates offered by other cards on this list.
- If interest rates continue to rise, your purchase interest charges could increase (especially if you tend to carry a balance).
Our methodology: How we determine the best cards
The MoneySense editorial team selects the best credit cards by assessing the value they provide to Canadians across various categories. Our best low-interest credit cards ranking is based on a comparison of an extensive list of card details and features, including competitively-low interest rates, annual fees and welcome offers. We have also considered the pros and cons of each card to help you determine which ones best suit your financial needs. Our rankings are an unbiased source of information for Canadians. The addition of links from affiliate partners has no bearing on the results. Read more about how MoneySense makes money.
Frequently asked questions
Rewards and cash back credit cards can be worth using if you have the ability to pay off your credit card in full every month. Otherwise, you’ll rack up interest charges that outpace the value of your rewards. Take the same example above: $1,000 in debt on a credit card with a 19.99% APR gets you around 0.0548% (19.99%/365), or just over $0.54, in interest charges every day.
Most credit cards offer a fixed interest rate, meaning that there is a single, unchanging percentage charged on your purchases. With a variable rate create card, on the other hand, the rate you are charged on unpaid balances can change based on a few factors.
Typically, the rate is tied to the prime rate, which fluctuates, with an additional fixed percentage on top. For example, a card might charge the bank’s prime rate plus 5%. Also, your credit score plays a role in determining how low of a rate you can get.
There’s a simple reason to consider a variable rate card: If you have an excellent credit score, you could land some of the lowest rates available in the credit card market. However, if you don’t have a great credit score, you want to keep things simple or need a card that also comes with a great balance transfer promotion, you may want to consider one with a fixed rate.
If you go with a low-interest credit card, you’ll save big on the debt you’re trying to pay off. Some cards go as low as 8.99%, like the MBNA True Line Gold Mastercard. For example, a $1,000 debt will cost you around $0.24 per day (8.99%/365) vs. $0.54 a day with the higher-rate card in the example above. The low APR will more than make up for not earning rewards. With less of your payments going to interest, you can actually pay down debt. After that, the money is yours to spend on that dreamed-of vacation or another goal.
One simple way to lower your credit card purchase interest rate charges is by switching to a low-interest rate card. If you tend to carry a balance, consider strategies like setting up automatic payments to your credit card to chip away at the amount you owe and reduce your interest charges on any unpaid balances. Consider using the avalanche or snowball method to pay off larger credit card debts.
