Canada's best credit cards for people with bad credit 2022

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Best Credit Cards for Bad Credit in Canada

*The Plastk Secured Visa has an annual fee of $48 and a monthly maintenance fee of $6.

Secure credit cards vs. unsecured credit cards vs. prepaid cards

Sure, a bad credit history limits the cards available to you, but that doesn’t mean you don’t have a lot of choice. For starters, when using a credit card to rebuild your credit score, you must first choose between a secured and an unsecured card. A secured credit card is 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 fail to make your payments. These cards are marketed directly to those with bad credit, so they have an easier approval process and are no-frills. And lenders report your activity to the credit bureau, which builds your score as you continue to repay responsibly. A prepaid card is a type of credit card where the credit limit is based directly on the holder’s deposit.

Alternatively, while not widely available to those with bad credit, unsecured cards are occasionally offered to consumers with “fair” credit scores – generally in the range of 600 to 650. As the name suggests, a unsecured card no 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 may have stricter approval requirements than unsecured cards. And as with all contracts, it’s always a good idea to read the fine print when selecting your card.

Best overall secured credit card for bad credit

Plastk Secure Visa Credit Card *

The Plastk-secured Visa offers users with bad credit a little bit of everything: rewards and welcome bonuses, credit tracking features, and a below-average interest rate. The earning rate is modest – 1 point per $1 spent – and you need 250 points for $1 cashback, making 1 point worth about $0.04. Not only can you use them for cash back, but you can also redeem your points for merchandise, travel and hotel rewards, or gift cards. And you’re not starting from scratch: the card comes with a welcome bonus of 5,000 points (worth $20) plus 0% APR for your first three months. Even more reasons to put this in your wallet: The Plastk card offers a slightly below-average interest rate of 17.99%; there is a simple payment system with Interac e-Transfer; and you get monthly updates of your credit score so you can track your progress. and since it is a Visa card it is widely accepted. There is no minimum income requirement. To use the card, you’ll need to make a $300 to $1,000 deposit instead. (Note, too, that there is a $48 annual fee.)

It’s encouraging to see a rewards card meant for those with bad credit. That said, it’s important to resist overspending to earn rewards. Everyone, regardless of creditworthiness, should be aware of spending within their means and strive to pay off their balance in full each month.

Annual Fee: $48 (plus $6 monthly fee) Welcome Offer: 0% interest for the first 3 months and 5,000 reward points ($20 value) Benefits: Earn a base of 1 point per $1 spent Min. Deposit: $300

Learn more about the Plastk Secured Visa credit card *

Best secured credit card for rewards

Neo Secure Card

When you have bad credit, it can affect your entire financial picture, including your ability to improve your credit score. That’s where the Neo Secured Card comes in handy. Regardless of your credit score, you can open a Neo account without a hard credit check, meaning you won’t hurt your score further. Deposit as little as $50 or as much as you want and that’s your limit. Use the card like any other credit card for convenience and to rebuild your credit score. In addition, the Neo Secured Card is a guaranteed approval credit card, which means that if you are an adult Canadian citizen and deposit security funds, you are approved. This card also softens the pot by giving you the option to earn money back on your purchases, so you can keep even more of your money in your wallet. Look out for huge welcome promotions such as 15% cash back on your first purchase with some retail partners and take advantage of partner deals with up to 5% earning rates. Neo also guarantees at least 1% cashback on everything else.

• Annual Fee: $0

•Interest: 19.99% -24.99% on purchases

•Min. Deposit: $50

Best secured credit card for low interest

Home Trust Secured Visa Low Interest Option*

Normally, this card has a standard interest rate of 19.99%, but when you sign up for the cost of $59, it drops to 14.90% — a big difference if you’re carrying a balance. You can use this card with a minimum deposit of $500 and the limit on the card corresponds to the deposit amount. If you need a higher credit limit, you can deposit more, up to $10,000. You also have the option of paying the annual contribution in one lump sum or in installments. Keep in mind, though, that the card carries a $12 inactivity fee for accounts that haven’t been used for a year. Note: This map is not available to Quebec residents.