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Best Credit Cards For Bad Credit In Canada

Whether you like it or not, your credit score has a big influence on your life, affecting your ability to receive loans, apply for credit cards, rent an apartment, and even find a job.

Fortunately, certain negative credit credit cards may also help you restore your credit score over time.

Whatever the cause of your bad credit, with a little bit of discipline and the correct financial tools, you can get back on track.

While not all of the credit cards we discuss here will help you recover your credit fast, they will certainly assist you from sinking any lower. This will also help you improve your credit score over time.

Best credit cards for bad credit

But first, here are our picks for the best credit cards for those with bad credit:

Credit Cards For Bad Credit:

Home Trust Secured Visa Card
Card Type: Secured
Annual Fee: $0
Features:
* Lower 2% foreign transaction fee
* Purchase protection insurance
* Helps rebuild your credit

Home Trust Secured Visa (Low Rate)
Card Type: Secured
Annual Fee: $59
Features:
* Lower 14.9% interest rate on purchases
* Lower 2% foreign transaction fee
* Purchase protection insurance
* Save on interest and rebuild your credit

KOHO Premium Prepaid Visa
Card Type: Prepaid
Annual Fee: $84 (or $9/month)
Features:
* Earn 2% cash back on gas, restaurants, and transit
* Earn 0.5% cash back on everything else
* No foreign transaction fees
* Price protection insurance

KOHO Prepaid Visa
Card Type: Prepaid
Annual Fee: $0
Features:
* Earn 0.5% cash back on all purchases
* Lower foreign transaction fee of 1.5%

Stack Prepaid Mastercard
Card Type: Prepaid
Annual Fee: $0
Features:
* Bonus rewards on purchases with select retailers
* No foreign transaction fees

Let's take a closer look at what these negative credit credit cards may accomplish for you.

How to get a credit card with bad credit

Credit cards are easy, secure, and may aid in the development of credit. Credit cards, when used carefully and paid on time, may help you develop a good payment history.

What is the challenge? Credit cards are not always simple to get if you have had credit problems in the past or have just just begun working on your credit. Normally, credit cards come with some form of minimum restrictions, and this is no exception. The good news is that credit cards for those with bad credit have fewer requirements.

Frequently, you'll simply need to fulfil a few essential criteria, such as: being of legal age, and not holding a credit card with the same firm, particularly one with a negative credit rating. Some cards may demand a security deposit or a down payment, and the majority of them may be applied for online.

Types of credit cards for bad credit

So, what credit cards are available to those with bad credit?

There are a few credit cards that demand a lower credit score than the majority, including:
  • secured credit cards,
  • prepaid credit cards, and
  • guaranteed credit cards.

For someone trying to be authorized, these are a fantastic place to start... Although, as we'll see, each cards offer various advantages and disadvantages.

So, let's break down these credit card categories and recommend some of the finest credit cards for each. That way, regardless of where your credit score is at the time you read this, you should be able to discover a card that meets your requirements.

Secured credit cards for bad credit

A secured credit card is an alternative if you have a low credit score. Secured credit cards demand an upfront payment, known as a security deposit, that is equal to the credit card limit. These monies will, in most situations, remain with your credit card issuer until your secured credit card account is closed and your debt is paid in full. The money you put down as a security deposit is utilized as collateral. If you use your credit card and don't pay your payment, the bank will apply the funds to your debt.

Many of the major banks offer secured credit cards, but not all of them are designed to help people with bad credit. Secured credit cards, such as those offered by RBC and BMO, are designed expressly for newcomers and immigrants, as well as foreign students seeking to build credit.

Then there's CIBC, TD, and Scotiabank, three banks that provide secured versions of several of their standard cards. This means you may spend them to repair your credit while simultaneously earning significant incentives and gaining access to some pretty cool privileges.

One thing to remember is this: These cards cannot be applied for online; instead, you must visit a local bank and apply in person. 

Home Trust Secured Visa cards

The Home Trust Secured Visa Card is a secured credit card that you may apply for online. There is no yearly charge, and no income condition.

The Home Trust Secured Visa (Low Rate) may be an even better alternative, with a purchase interest rate of just 14.9 percent and an annual fee of $59, or $5 per month.

The fantastic thing about Home Trust credit cards is that they will record your payment activity to Equifax and TransUnion once a month, assisting you in rebuilding your credit and improving your credit score.

The deposit for these secured credit cards may vary from $500 to $10,000, and almost everyone is accepted, even if they have already declared bankruptcy (although a discharge certificate may be required).

Your deposit is refunded to you should you opt to end your account. One of the most noticeable features of the Home Trust Secured Visa is that it is one of the few credit cards in Canada that offers a lower foreign currency transaction cost of 2%. Because most other cards charge a higher cost of 2.5 percent when you buy in another nation or make a transaction in a foreign currency, this function saves you 0.5 percent.

Home Trust Secured Visa Card
AT A GLANCE
Choose how much you want your credit limit to be and rebuild your credit with this Secured visa.
Genius rating:
User reviews: (8)
Rewards rate: N/A
Our credit estimate: Poor (300-560)
Welcome bonus: N/A
Annual fee: $0
Interest: 19.99% on purchases, 19.99% on cash*
FX feature: 2% FX fee


Home Trust Secured Visa (Low Rate)
AT A GLANCE
Take control of your credit and your interest rate with this secured visa.
Genius rating:
User reviews: (0)
Rewards rate: N/A
Our credit estimate: Poor (300-560)
Welcome bonus: N/A
Annual fee: $59
Interest: 14.90% on purchases, 19.80% on cash*
FX feature: 2% FX fee

Unsecured credit cards for bad credit

If you have terrible credit, you don't have to limit yourself to credit cards that demand a down payment to get authorized.

Prepaid credit cards are unsecured credit cards that may be a better fit for you if you:
  • You don't know whether you'll be accepted for a standard credit card.
  • You'd prefer not have your money locked up in the security deposit of a secured credit card.
  • You're not sure whether you can trust yourself when it comes to using a credit card.

If you need an immediate approval credit card but aren't quite ready for the real thing, prepaid credit cards are a terrific choice.

Prepaid cards are divided into two categories:
  • One time use prepaid gift card credit cards – These are often available at a predetermined price in stores or online. These cards can't be reloaded, they usually come with fees, and they may expire if they aren't used up within a specified length of time.
  • Reloadable credit cards ‒ A bank will provide these cards, which may be preloaded with money as needed. They act like a regular credit card and may be connected to your bank account for quick recharging.

Prepaid cards are useful for many purposes, but one thing to remember is that they do not improve your credit score.
So, if you're searching for a card to assist you improve your credit score, these aren't the cards for you. They will, however, place time between all of the unfavorable items on your credit report, gradually improving your score over time.

If you're interested in using a prepaid card, there are a few terrific choices to consider. They also provide some basic incentives as a bonus.

KOHO Prepaid Visa card

The KOHO Prepaid Visa is a prepaid Visa that rewards you for every of your transactions. It features no annual cost and a foreign transaction cost of 1.5 percent, which is cheaper than other credit cards. It also pays off in terms of incentives. Every purchase will earn you 0.5 percent cash back.

KOHO Prepaid Visa
AT A GLANCE
The KOHO Visa is a no fee prepaid card that lets you earn cash back rewards on all your purchases.
Genius rating:
User reviews: (5)
Rewards rate: around 0.5%
Our credit estimate: Poor (300-560)
Welcome bonus: up to $60*
Annual fee: $0
FX feature: 1.5% FX fee

KOHO Premium Prepaid Visa

Upgrade to the KOHO Premium Prepaid Visa if you want more from your prepaid credit card.
You also earn 2% cash back on a range of categories for an annual charge of $84 (or $9 per month), including: groceries, gas, restaurants, and transit.

All other purchases will earn you 0.5 percent cash back.

Price protection is included with the KOHO Premium Visa. If you discover a lower price for an item you purchased within the past 30 days, KOHO will credit your account the difference.

To top it off, there are no foreign exchange costs, which means you may save money when traveling or making online purchases in currencies other than CAD.

You may even switch back to a standard KOHO Prepaid Visa card at any moment if you feel the KOHO Premium isn't worth the monthly charge. 

KOHO Premium Prepaid Visa
AT A GLANCE
The KOHO Premium Visa is a prepaid card that offers high rewards and no foreign transaction fees.
Genius rating:
User reviews: (2)
Rewards rate: around 1.03%
Our credit estimate: Poor (300-560)
Welcome bonus: up to $60*
Annual fee: $84
FX feature: 0% FX fee

Stack Mastercard

The Stack Prepaid Mastercard is another alternative. It, too, does not charge an annual fee. In addition, rather than providing points on all transactions, you may receive rewards on limited-time deals.

But where does it become truly interesting? There are no foreign exchange costs with this card. You'll avoid the 2.5 percent fee that most other credit and prepaid cards levy.

You may also earn up to $15 in referral incentives and a Stack Card for each friend you recommend.

Stack Prepaid Mastercard
AT A GLANCE
The Stack Mastercard is a no fee prepaid card with no foreign exchange fees that lets you earn rewards with partnered retailers. You'll not only save on fees, but you’ll also earn some bonus rewards with this prepaid card.
Genius rating:
User reviews: (9)
Rewards rate: N/A
Our credit estimate: Poor (300-560)
Welcome bonus: N/A
Annual fee: $0
FX feature: 0% FX fee

Guaranteed credit cards for bad credit

Guaranteed credit cards are among the most sought-after on the market, and Capital One provides several:
  • Capital One Guaranteed Mastercard ‒ You may be required to make a down payment of $75 to $300 for this card.
  • Capital One Low Rate Guaranteed Mastercard ‒ A down payment of $75 to $300 may be required for this credit card.
  • Capital One Guaranteed Secured Mastercard ‒ Even if you apply for one of the other two cards, you may be offered the Capital

One Guaranteed Secured Mastercard based on your credit score. The key distinction is that this card will demand a down payment ranging from $75 to $300.

Things to remember about credit cards for bad credit

Credit may be alluring, and if utilized correctly, it may even help you improve your credit score. However, it is not for everyone. (That's ok, since debit and cash are also available.)

So, before you apply, bear the following points in mind:

Credit cards are not an additional source of income and should only be used to buy items that you would have bought anyhow.

The idea is to improve your financial habits. If you need to set reminders, go ahead and do so. If you need to seek for assistance, do so. Put your credit card in a block of ice in the freezer if necessary.

Every month, credit cards should be paid in full or, at the absolute least, the minimum payment should be made before the payment due date. (Paying just the bare minimum will get you nowhere quick.)

If you skip a payment, your credit will be harmed for a long time.

FAQ

What is the easiest credit card to get with bad credit?
A secured credit card is the most straightforward credit card for those with weak credit, and it may also help you restore your credit.

What credit card can I get with bad credit?
Your credit card alternatives will be restricted if you have terrible credit, such as secured credit cards, prepaid credit cards, or guaranteed credit cards.

Can I get a credit card with a 500 credit score?
You are able to... It will not, however, be a high-end credit card with a lot of frills. When you have bad credit, your best chance is to acquire a secured credit card and improve your credit over time by using it responsibly and paying it off in full every month.

What is the fastest way to build credit?
If you have low credit, acquiring a secured credit card is the quickest method to start restoring your credit. This form of credit card is almost likely to be accepted, and although it does demand a security deposit, it also reports your payment activity to Canada's main credit agencies on a monthly basis. If you use a secured credit card wisely, your credit score will quickly improve.

How does a secured credit card differ from a regular credit card?

Secured and unsecured credit cards are identical in terms of how they're utilized. To receive a secured credit card, you must pay a security deposit to the issuer, which serves as collateral in the event that you do not make a payment. Your credit limit is equal to the amount of your deposit.

The security deposit is repaid to you when you shut the account, assuming you complete all of your payments (helping to repair your negative credit).

Secured credit cards also have a high chance of approval, making them a feasible option if you need an unsecured credit card for terrible credit.

How can prepaid credit cards help my credit score?

Prepaid cards don't enhance your credit score since you aren't provided a credit limit and are simply spending your own money when you use them.

However, if you need a credit card, it's an excellent option to a secured credit card, and using one can help you put space between yourself and the bad entries on your credit file, gradually improving your credit score.