Canada’s best credit cards for people with bad credit 2021

Best credit cards for bad credit in Canada

Secured credit cards vs unsecured credit cards

Sure, your credit history will limit you in what card you are approved for, but that’s not to say you don’t have any choices. In fact, using credit to rebuild your credit score, you’ll need to choose between a secured and unsecured credit card. A secured credit card is one that’s offered on the condition that you “secure” it with collateral, usually in the form of a refundable deposit that can be claimed by the lender if you default on your payments. These cards are marketed directly to those with bad credit, so they have an easier approval process and come with no frills. And lenders report back your activity to the credit bureau which builds up your score as you continue to repay responsibly. 

That said, while not generally available to those with bad credit, unsecured cards are occasionally offered to consumers with “fair” credit scores—generally in the 600 to 650 range. As the name suggests, an unsecured card doesn’t require a deposit. Plus, unlike secured cards, many unsecured credit cards offer rewards (think points or cash back, which is a nice perk, isn’t it?). That said, they can command tougher approval requirements than unsecured cards. And like all contracts, it’s always a good idea to read the fine print when selecting your card.

Best secured card (no fee)

Home Trust Secured Visa (No Annual Fee)*

The Home Trust Secured Visa stands out because it’s a secured credit card with no annual fee (a nice bonus when getting a new card). To open an account, you need to make a $500 deposit. And while the interest rate is standard at 19.99%, this won’t kick in unless you carry a balance—and if you’re looking to build your credit, you should aim for that not to happen. As with other secured credit cards, you can improve your credit score by making payments on time, and preferably in full. Note: If you don’t use your card at least once a year, there is a $12 inactivity fee. So make to charge at least one purchase to the card annually. 

  • Annual Fee: $0
  • Interest rate: 19.99% on purchases
  • Min Deposit: $500

Note: This card is not available to residents of Quebec.

Get more details about the Home Trust Secured Visa (no fee)*

Best secured card (rewards)

Plastk Secured Visa Credit Card*

Cards aimed at those with bad credit have traditionally been stark, pared-down products, designed only to help the cardholder repair their credit and without the benefit of rewards or bonuses. The Plastk Secured Visa breaks that mold by offering rewards on everyday purchases along with a worthy welcome bonus. 

The earn rate is modest—1 point per $1 spent—and you’ll need 250 points for $1 in cash back, making 1 point worth about $0.04. Still, the ability to earn anything with this type of card is a big draw. In addition to using them for cash back, you can redeem your points for merchandise, travel and hotel rewards or gift cards. And you won’t be starting from scratch. The Plastk Secured Visa gets you started with a welcome bonus of 5,000 points (worth $20) plus 0% APR for your first three months. (APR is the annual percentage rate, which includes the interest and fees.) 

Another reason to slide this in your wallet: The Plastk card offers a slightly below average interest rate of 17.99%. There’s an easy payment system with Interac e-Transfer, and you get monthly updates of your credit score so you can track your progress. As a Visa card, it is widely accepted. 

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