14 Best No-Fee Credit Cards in Canada for November 2024
Nov 1, 2024The best no-fee credit cards in Canada offer impressive benefits without the burden of an annual fee.
NerdWallet Canada selected the best no-fee cards in Canada across numerous categories after analyzing dozens of no-annual-fee credit cards. Whether you’re looking for cash back, valuable travel rewards, impressive perks, lower interest rates, or more, our list of the best no-fee cards offer spectacular benefits without the burden of an annual fee. Consider our selections to choose the best option for your lifestyle and financial goals.
Compare the best no-fee credit cards in Canada
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BACK TO TOPNerdWallet Canada selects the best credit cards based on unique attributes, overall consumer value and suitability for specific kinds of consumers. Factors in our evaluation methodologies may include annual fees, rewards rates, interest rates and other noteworthy features specific to the card type. To learn more about how we evaluate and select financial products, you can review our credit card methodology.
How no-fee credit cards work in Canada
What is a no-fee credit card?
A no-fee credit card doesn’t have an annual fee: the lump sum amount charged by card issuers to help cover the cost of card rewards and programs. Most of the best Canadian credit cards carry annual fees over $100.
Now, this isn’t to say you won’t ever pay any fees while holding a no-free credit card — you’ll likely still need to deal with interest charges, inactivity fees and the like. But annual fees? No-fee cards don’t have any, which could help you trim down on unnecessary costs.
The only downside? No-fee cards may not offer the same premium perks that often accompany cards with steep annual fees. That said, no-fee cards still have some perks, including cash-back reward programs, travel points and more.
Common features of a no-fee credit card
Every no-fee credit card is unique, so the included features will differ. That said, here are some of the common features you may get:
Interest-free grace period.
Fraud protection.
Increased earn rate on some merchant categories.
Rewards (cash back, travel, store, etc).
Purchase protection.
Extended warranty.
Admittedly, no-fee credit cards often have fewer benefits than credit cards with an annual fee. But some no-fee credit cards may still include helpful perks, such as mobile device protection or travel insurance.
Is a no-fee credit card a free credit card?
A no-fee card isn’t exactly the same as a free credit card. While no-fee credit cards don’t charge you an annual fee, there will likely be other costs associated with using a no-fee card, including:
Over limit fees.
Inactivity fees.
All of these additional fees should be clearly outlined in the terms and conditions that come with your card. As long as you use your no-fee credit card responsibly, it may be possible to avoid fees completely.
Do no-fee credit cards still earn rewards?
Yes, there are many no-fee credit cards that earn rewards. The type of rewards you’ll receive depends on what card you choose. The typical rewards categories are as follows:
No-fee cash back cards earn a percentage back in cash on purchases.
No-fee travel cards earn airline, hotel or even general travel rewards points.
Co-branded no-fee store and retail cards earn store or retail rewards that can be redeemed at participating stores for groceries, merchandise and more.
Types of no-fee credit cards in Canada
Many types of no-fee credit cards are available, with the best offering the ability to earn valuable rewards, cash back and more, all without having to pay an annual fee.
No-fee cash back credit cards
Cash-back credit cards are fairly simple as far as perks are concerned: spend money; get a percentage of what you’ve spent back in cash. Now, as for the type of purchases that earn rewards and how much cash back you get for them, that’s what separates different types of cash-back cards.
Take the Simplii Financial™ Cash Back Visa Card: it’s a no-fee cash back card that offers 4% cash back each time you swipe your card at a restaurant, bar or coffee shop, up to $5,000 per year.
In comparison, the Tangerine Money-Back Credit Card offers unlimited cash back at a 2% rate in up to three money-back categories of your choice.
No-fee travel credit cards
Travel cards offer travel-related rewards when you use your card. Some travel cards charge large annual fees in exchange for premium perks, like comprehensive travel insurance packages.
But the rewards offered by no-fee travel credit cards are nothing to sneeze at. The CIBC Aeroplan® Visa Card doesn’t carry an annual fee and earns Aeroplan points every time you spend on gas, groceries and Air Canada travel purchases, for example.
And the BMO AIR MILES®† Mastercard®*, another no-fee card, earns Air Miles rewards and comes with car rental discounts.
No-fee rewards cards
Rewards cards allow you to earn points for making eligible purchases. And these points can be redeemed for all types of perks, from travel vouchers to electronic gift cards.
For example, the American Express® Green Card lets you earn rewards points across a variety of spending categories and points can be put towards purchases, travel spending, gift cards; you name it. Plus, you can transfer points to other loyalty programs, like Aeroplan and Marriott Bonvoy.
No-fee Mastercards
Credit cards branded with the Mastercard name or logo belong to the Mastercard network. Mastercard is not a card issuer, it simply processes credit card payments. And because Mastercard is one of the most popular card processors in the world, there are plenty of cards to pick from — including cards without annual fees.
One example of a no-fee Mastercard with generous perks is the Brim Mastercard. It earns rewards points on everyday purchases, offers free global WiFi access and comes with travel, event ticket and mobile device insurance coverage.
Who should get a no-fee credit card?
A no-fee card may not be suitable for everyone, depending on their spending habits and financial goals, but there are some circumstances in which this type of card is a practical fit:
You’re building your credit history. When you begin building your credit history, a card with a high annual fee may not be helpful. No-fee cards are free to carry, so they can help you focus on building your credit without having to worry about whether you’re using your card often enough to justify the annual cost.
You don’t use your card that often. Getting a card with an annual fee makes sense if you’re able to earn more than you pay — but this tends to require more frequent use and thousands of dollars in spending. If you only anticipate using your credit card for the odd infrequent purchase, a no-fee card may be more practical.
You’re seeking a secondary card. Maybe you’ve already got a credit card, but you want a secondary card to double down on the points-earning process. A no-fee card might be the way to go. Or, maybe you’d like a Visa to compliment your Mastercard — or vice versa. Not all merchants accept both.
Advantages of no-fee credit cards
No annual fee. As long as you’re paying your balance in full and on time each month, it doesn’t cost you anything to have the card.
You can keep your account open for a long time. Since it doesn’t cost anything to keep the card active, your total available credit will grow, which has a positive effect on your credit utilization — one of the biggest factors in your credit score.
Good for emergencies. No-fee credit cards are low-cost and low-maintenance, so they make for an excellent backup credit card.
Helps you build credit. Using your credit card responsibly will build your credit history and credit score.
Earn rewards. You can earn points or miles that can later be redeemed for travel or merchandise.
Disadvantages of no-fee credit cards
Limited benefits. Credit cards that charge an annual fee often have better benefits and higher reward earn rates.
Smaller welcome bonus. No-fee cards usually have a less generous sign-up offer compared to cards with a fee.
Can create high-interest debt. As with all credit cards, you could go into debt if you don’t manage your spending.
When is an annual fee worth paying?
Annual fees for Canadian credit cards can range from $6.95 to $699, and the cost may be worthwhile — it really all depends on your financial situation, lifestyle and spending habits.
For example: a travel credit card with an annual fee may be a practical fit if you’re often on the road and frequently purchase travel insurance — a perk offered by numerous travel rewards cards.
Or maybe it’s a cash-back credit card with an annual fee that offers bonus rewards for something you spend a lot of money on, like gas or groceries.
Essentially, a credit card’s annual fee is worth it if the amount of value (savings or rewards) you can squeeze from the card each year is higher than the amount of the fee.
How to choose a no-fee credit card
When comparing credit cards, assessing the annual fee they charge is typically important. Of course, with no-fee cards, this isn’t a concern. But that doesn’t necessarily mean they’re all the same. Here are some other things to consider when deciding between no-fee credit cards in Canada.
Interest rate
All credit cards — even no-fee cards — charge interest and those interest rates should factor into the card you choose. The no-fee cards on our list carry an average purchase interest rate of 20.2%, which is pretty standard. The average interest rate for a Canadian credit card in any category is 19.4%, but cards with lower rates exist, some under 10%. They’re rare, but they’re out there.
If you tend to carry a balance on your card, keep your eyes peeled for no-fee cards with lower interest rates — anything under 20% is a competitive rate in this category.
Welcome bonus or intro offer
Introductory offers often come in the form of special cash-back offers or extra rewards points. They’re designed to help incentivize new card applications and could be a factor worth considering as you narrow down your no-fee credit card options.
The caveat to welcome bonuses? You don’t always get the points or cash just for signing up. To nab the intro offer, you may have to spend a minimum amount within a certain time frame after opening the card, for example. The thing to note about welcome bonuses or intro offers is that they’re typically temporary, often ending after a few months.
Ongoing rewards rate
When comparing no-fee card options, take a look at what type of rewards the card will earn even after the intro offer expires — more specifically, how they’re earned and ways they can be redeemed.
Whether you earn points from affiliated travel programs or cold hard cash back on eligible purchases, you’ll want a rewards program that will encourage you to make the most of your spending.
Perhaps even more important, however, is how points are earned. One card may offer triple the points on your weekly grocery bill, while another may let you double down on your travel miles each time you book a flight with a qualifying carrier.
Credit card insurance
Some no-fee credit cards come with insurance coverage, but not all. Insurance coverage offerings may include travel insurance, event ticket protection, extended warranty and purchase security protection and more.
Insurance coverage through your no-fee credit card may not be a strict necessity if you have coverage through an independent insurer or through your employer. But it can offer added protection and peace of mind, depending on the coverage available.
How to apply for a no-fee credit card
To apply for a no-fee credit card in Canada, you’ll first need to ensure that you meet the issuer’s eligibility requirements, and then follow the typical steps to submit an application.
Eligibility requirements for a no-fee credit card
Eligibility criteria may vary, but the baseline requirements for a no-fee credit card tend to be fairly standard.
Age and residency status
You must be a Canadian resident, and you must be the age of majority in the province or territory you live in.
Credit score
All of the no-fee cards on our list require applicants to have a Canadian credit file, so if this is your first credit card, you may need to explore other options, like getting a secured credit card, instead.
Minimum credit score thresholds may also come into play, depending on the card you choose.
Personal or household income requirements
Income requirements tend to be more common among high-tier credit cards, while no-fee credit card income requirements tend to be much lower, if they’re required at all.
Steps to apply for a no-fee credit card
When you apply for a no-fee credit card, there’s no guarantee you’ll be approved. The credit card provider needs to assess your financial profile to determine if you’re creditworthy. The application process will typically look something like this:
Fill out an application. This can be done online or at your financial institution. The application will ask for some basic information, such as your name, date of birth, address, social insurance number, employer and income.
Your information is checked. The credit card issuer will make an inquiry on your credit report and verify the information that you provided.
A decision is made. If you apply online, instant approval (or disapproval) is possible, but there’s also a chance the credit card issuer will ask you to contact them to provide additional information.
Your card is mailed out. Your credit card will immediately be mailed out and will typically arrive within 14 business days.
Activate your card. Once your card arrives, you’ll need to activate it by logging into your account or calling the number on your card. Once activated, you can use your card to make purchases.
Can you get a no annual fee credit card with bad credit?
It depends on your situation.
For example, if you’re a student, some financial institutions will approve you for a no-fee student credit card even if you don’t have much credit history.
On the other hand, if you have a bad credit score due to previous financial difficulties, you may not be approved for a traditional no-fee credit card. However, you may still get another type of credit card.
You would likely still qualify for a no-fee secured credit card. These types of credit cards are similar to regular credit cards, but you need to deposit security funds. These funds act as your credit limit, but you can’t use them to pay your card balance.
Frequently asked questions
Who should get a no-fee credit card?
Who should get a no-fee credit card?
A no-fee credit card is suitable for many people. Those who don’t plan to spend much on their card, those who just want a backup credit card that earns decent rewards, and those who just don’t want to pay an additional fee will find no-fee cards attractive.
How are no-fee credit cards different from debit cards?
How are no-fee credit cards different from debit cards?
No-fee credit cards are similar to other unsecured ones and operate like short-term loans. You borrow money from your credit card issuer and those funds must eventually be paid back. With your debit card, you can only spend money from your bank account. Since you aren’t borrowing money with a debit card, you won’t be charged interest.
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