Spend with the Best Credit Cards in Canada

Wendy Stokesby:


Credit cards are useful tools for anyone. Today you can get a lot of extras when you spend money on credit cards. There are cash-back cards, airline rewards card, loyalty points cards and cards that can earn you just about any kind of reward you can think of.

With so many different credit cards out there, how do you know which ones to put in your wallet? We can help you with that. You might be looking for a specific kind of rewards card or a certain feature, but we’re going to go over some of the best credit cards we’ve found – MBNA Mastercard, Scotiabank Gold American Express, and RBC rewards visa credits – and explain to you why we chose each one.

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Similarities between American and Canadian Credit Cards

But before we go into explaining which of the Canadian Card is better to choose, it is crucial to understand similarities and differences between American and Canadian credit cards. Without knowing how they are similar and different, it will be difficult to understand the benefits of the latter. Let us start with what is similar between the credit cards of the two countries. They work the same, of course: you swipe your credit card in a store, restaurant, or coffee shop, you are given a grace period before your payment is due, and you pay an interest rate, if you carry any balance past this given grace period.

Credit cards companies in the USA and Canada also similarly rely on credit scores, if they need to assess customers’ credit-worthiness. More than this: the same credit companies operate in both counties. Transunion, Experian, and Equifax are only several examples of the companies serving whole North America. The only thing you should keep in mind is that the same companies work independently in the USA and in Canada. This means that when these companies calculate their customers’ credit scores, they do not transfer their credit history from the USA to Canada and vice versa.

Source: The Unconventional Route

Differences between American and Canadian Credit Cards

Despite fundamental similarities between American and Canadian credit cards, there are also some essential differences between them that you should learn before you choose the best Canadian card for yourself.

To start with, Canadian cards never have such good rewards programs as American cards have. You will never have more than 1% cash back in Canada, while in America, you can get as much as 5% on some transactions. With this said, remember that using your American card in Canada is never a good idea, because you will pay transactions fees climbing to 3% sometimes. Even if you have 5% rewards on your American card, paying 3% of transaction fees will make all rewards worthless. Also remember that you pay annual fees in Canada. And it is not only rewards cards that have annual fees but all credit cards issued in Canada require annual fees. In the USA, this practice is not common.

Interest rates on Canadian credit cards are higher than on American ones. Usually, the APR in Canada is as high as 19.99% or even 30%. It is, of course, true that you can find cards where interest rates are as low as 16.99%. But these cards charge much higher annual fees. In the USA, interest rates are lower: you will pay from 8% to 12%. Many cards have 0% of interest rates.  

With these similarities and differences between the USA and Canadian credit cards in mind, it will be easer for you to choose the right credit card to use in Canada. We elaborate on the benefits of several Canadian credit cards in the sections below.

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Check Out the MBNA Mastercard

MBNA specializes solely in credit cards. They offer both Mastercards and Visas, but for our purposes we’re going to briefly go over some of their Mastercards. The MBNA Mastercard can earn you different kinds of rewards, so if your goal in getting a credit card is to get something that will earn you rewards that are useful to you, this is a great one for you.

MBNA offers Mastercards that give you travel rewards, cash back, specialty rewards, and more. There are also MBNA Mastercards that have exceptionally low interest rates all year long, or you can get one that gives you special rates for balance transfers. Whatever you are looking for, MBNA probably has a Mastercard that will give it to you.

Royal Bank of Canada Credit Cards

RBC offers the RBC Rewards+ Visa card. This card allows you to choose what kind of rewards you want to earn. There is no annual fee and you’ll earn points for everything you spend money on. There are also ways that you can add large amounts of points. You can get 500 points just by giving them your email address.

There are other perks you can receive if you also decide to open bank accounts with RBC. You’ll get offers for shopping discounts or savings for dining out. The card will give you savings at Petro-Canada if you link your card to that option. There are also several safety features that come with this credit card, including Credit Card Lock, which lets you turn your card off if you need to. You can temporarily lock your credit account if you lose the card or something like that.

Source: Wikipedia

How About That Scotiabank Gold American Express?

This credit card does have an annual fee of $99, but for good reason. If you’re someone who plans to do all of your spending on a credit card, pay it off every month and reap the benefits in credit cards rewards, this is the card for you. Let’s look at why.

For starters, you earn 1% cash back on any kind of purchase. That’s money for just spending money. If you’re buying gas, dining out or buying groceries, you earn 4% cash back. When you first open the card, you get a deal that if you spend $1,000 on your account in the 3 months following your application, you’ll be rewarded with 15,000 bonus points. That’s equivalent of $150. And as if that weren’t enough to convince you of this card’s right to be called one of the best, the annual fee is waived for the first year.

Be Smart with the MBNA Smart Cash Platinum Plus Mastercard

MBNA has another card, the Smart Cash that’s great earning cash on your purchases without having to pay an annual fee. You can earn 5% cash back on purchases for gas and groceries up until you’ve spent $500 in a month on those things, for the first six months of having the card. After that, that percentage will drop down to 2% for those purchase categories. You’ll get 0.5% back for other qualifying purchases. This is another card where you just get to make money for spending some on things that you need to buy anyway. And you don’t even have to pay an annual fee to do it.

Source: MoneySense

What’s Important to Look at Before Deciding on a Credit Card?

First you need to know what you want from a credit card. What kind of rewards are you looking for? Do you want rewards that are designated for specific interests like traveling, or would you rather have something like straight cash so that you can do with it whatever you want?

Then compare cards that have the features that you are looking for and look at things like, annual fees, interest rates, transaction fees, opening offers and anything else that might save you money or cause you to spend more.

Look at how you will be using your credit card. Will you be paying it off every month and doing all of your spending on it? Or, will you be using it sometimes and leaving a balance on it some of the time? That’s important to know because there are cards that are better for leaving balances on. You want to choose the right card for your needs.

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