What are the Best Credit Cards to Apply For if You Have No Credit?

What are the Best Credit Cards to Apply For if You Have No Credit?

February 1, 2019    Credit

Getting a credit card can be a great way to build credit, as long as you choose your card wisely and use it responsibly. The best way to keep your credit healthy is by carrying a low balance compared to your spending limit and by paying off your balance on time each month.

Different cards come with different terms

Everyone has to start somewhere when it comes to credit. If you’re a student, young adult or newcomer to Canada with no established credit history it’s important to choose a credit card designed for your situation.

There are three kinds of credit cards out there:

  1. Unsecured Credit Cards – These are typical credit cards. They require approval to be used and have a credit limit and interest rate based on your credit standing.
  2. Secured Credit Cards – These are a good option for those with poor or nonexistent credit. They require a deposit (usually of $200 or more) and are therefore are easier to get approved for. You still get charged interest if you carry a balance.
  3. Prepaid Credit Cards – A prepaid card allows you to shop online like a credit card, but operates like a chequing account. You load money on and can’t spend beyond that balance.
  4. Keep in mind that each card comes with its own set of pros and cons.

Nine of the best credit cards for people with no credit

In this post we’ve rounded up some of the credit cards that are a good option for those with no credit.

1. Best No Credit Unsecured Credit Card

Capital One Low Rate Guaranteed Mastercard
Interest Rate: 14.99%
Annual Fee: $79

This MasterCard card gives applicants the best of both worlds: guaranteed approval and a low interest rate. The $79 annual fee might seem a bit pricey, but it’s a drop in the bucket compared to the interest you’ll save on purchases.

Capital One also offers a secured version of this card for those who don’t meet the minimum approval criteria, which includes being the age of majority in your province or territory and not having an existing Capital One account.

This card is specifically designed for those with poor or non-existent credit and includes perks likes price protection, automatic manufacturer warranty extension, travel insurance and rental car and baggage coverage.

2. Best No Credit Secured Credit Card

Home Trust Secured Visa
Interest Rate: 14.90% or 19.99% with no annual fee
Annual Fee: $59

Home Trust is a Canadian company that offers credit cards, mortgages, investment and lending services to people with past credit issues or no credit history. Its secured Visa card requires a minimum $500 security deposit, which sets your credit limit and will be returned to you if you decide to cancel your card in the future.

When you apply you can choose between two account options: low-interest or no annual fee. With the low-interest option you pay $59 annually to access a 14.90% interest rate. If you forego the annual fee your rate will be set at 19.99%, which is still relatively low compared to other cards.

To be approved, you need to be the age of majority, a permanent resident of Canada and not currently be going through a bankruptcy.

3. Best Low-Interest Unsecured Credit Card

BMO Preferred Rate MasterCard

Interest Rate: 12.99%
Annual Fee: $20

BMO’s Preferred Rate MasterCard gives people with no credit or poor credit access to interest rates normally reserved for customers with excellent credit scores. New customers can also get a 3.99% rate on balance transfers, which goes up to the standard 12.99% interest rate after nine months.

Extended warranty and purchase protection come standard with this card but there are a few extras you can get for an additional fee, including travel insurance, balance protection and credit monitoring services.

To be approved you need to have an annual income of at least $15,000 and not have experienced a bankruptcy in the last seven years. 

4. Best Low Rate, Low Fee Credit Card
RBC Visa Classic Low Rate Option
Interest Rate: 11.99%
Annual Fee: $20

This card is a standout because of its low interest rate and its low annual fee. RBC also claims that it doesn’t have a minimum credit score required for approval. You do, however, need an annual income of at least $15,000.

RBC’s Low Rate products work on a sliding scale, which ranges from an 11.99% interest rate for applicants with a high credit score to 19.99% for those with less than perfect credit.

Perks for this credit card include savings at the Petro-Canada gas stations — you automatically save 3¢/L on fuel and earn 20% more in Petro-Points if you pay with your card.

5. Best Guaranteed Approval Credit Card

Refresh Financial Secured Visa
Interest Rate: 17.99%
Annual Fee: $12.95

Refresh Financial is another Canadian company that offers secured loans and credit cards for people focused on building credit.

Every applicant is approved, without a credit check, provided they can make the minimum security deposit. Because they don’t do credit checks, those with a no credit history and a bankruptcy or foreclosure on their account will still be approved.

As with other secured credit cards your deposit determines your credit limit, which can range from $200 to $10,000. You’ll be charged $5 if you go over your credit limit once and your card will be cancelled if it happens a second time, so  it’s important to stay on top of your balance.

6. Best No-Fee Unsecured Credit Card

Scotiabank Value No-Fee Visa
Interest Rate: 16.99%
Annual Fee: $0

For $0 a year you can still access a relatively low interest rate with Scotiabank’s no-fee Visa card.

This is also an ideal card for newcomers to Canada and those with non-existent credit because Scotiabank doesn’t require a prior credit history to be approved. Applicants need to be a permanent resident or have at least six months left on their Foreign Worker permit; be the age of majority; not have declared bankruptcy in the last seven years; and have a Canadian address.

This card also gets you 25% off rental cars at AVIS locations in Canada or the United States.

7. Best Prepaid Credit Card

CIBC Smart Prepaid Visa
Interest Rate: 0%
Annual Fee: $0

Like any prepaid credit card, CIBC’s Smart Prepaid Visa works like a debit card but allows you to make online and over-the-phone purchases. There’s no approval necessary because you load the card with your own money, leaving the lender with no liability whatsoever.

You can load between $20 and $10,000 on the card and the funds never expire. You can also track the balance and reload the card anytime you want through CIBC’s online banking site and app.

8. Best Student Credit Card

BMO SPC CashBack MasterCard
Interest Rate: 19.99%
Annual Fee: $0

Most banks and major credit card companies offer special products for students that usually come with lower interest rates and have more lenient credit requirements. This version of BMO’s student MasterCard also combines the perks of the SPC (Student Price Card) loyalty card.

This card has no annual fee and a pretty low interest rate as well as a 5% cash back bonus for new members for the first three months — which drops to 1% after the promotion ends.

The SPC side of the card entitles you to 10% to 15% off at certain retailers. If you like to travel in between school terms there’s also an Air Miles version of this credit card that doubles the miles you can earn and starts new customers off with 800 bonus miles.

You’ll be required to prove your student status to be eligible for this card.

9. Best Rewards Credit Card

PC Financial MasterCard
Interest Rate: 19.97%
Annual Fee: $0

This credit card offers plenty of practical perks through its connection to the PC Optimum program, which allows you to earn and use points to pay for everything from groceries to gas. Cardholders earn 10 PC points on every $1 and bonus points if they use their card for purchases at affiliated stores.

The 19.97% interest rate is decent for a no annual fee card, but applicants will be subjected to a credit check.

Choose the right card for you

Hopefully this list gives you an idea of the kinds of credit cards available for those with no prior credit history. If you’re feeling ready to apply for a card you should still take the time to read the fine print so you know exactly what you’re signing up for.

Birchwood Credit Solutions specializes in securing car loans for people with poor or non-existent credit. Our aim is to take the stress out of car buying and find you a loan that works for your budget and lifestyle.

Give us a call today or stop by one of our three locations.