Best Credit Cards to Rebuild Credit in Canada
While you may need good or excellent credit scores to apply for a traditional credit card, secured cards and prepaid cards are less restrictive. Plus, when used responsibly, these cards can help rebuild your credit.
There are also cards specifically designed for newcomers to Canada. If you’ve just moved to the Great White North and want to rebuild the credit you had in a previous country, these cards can help.
Best credit cards to rebuild credit in Canada
Rewards breakdown
Rewards breakdownCashback on groceries.
Cashback on gas & electric vehicle charging.
NerdWallet's take
NerdWallet's takeThis cash-back earning secured card offers 1% back on gas and grocery purchases alongside credit monitoring tools and ATM fee reimbursements. Less appealing is its monthly fee that amounts to near $100 annually. Neo says that you may be able to have the monthly fee waived by maintaining a minimum balance in a Neo Everyday or Neo Savings account, though it doesn’t state what the minimum is. For cash-strapped credit-builders on a budget, the cost of this card could be a dealbreaker. Best for: Anyone building their credit who doesn’t mind paying for some nice-to-have extras.
Pros
- Earns 1% cash back on gas and grocery purchases.
- Credit score monitoring and credit building tools.
Cons
- $7.99 monthly fee.
- Purchase interest rates as high as 29.99%.
Card details
Card details- Guaranteed approval and no credit score required to apply
- International IDs accepted
- 1% cashback on groceries
- 1% cashback on gas & electric vehicle charging
- Average of 5% cashback at 10,000 partner locations nation-wide—on top of the base cashback rates
- Start with a security fund of as little as $50
- Can help builds credit history with consistent, on-time payments
- Track your monthly spending with real-time insights
- Instant cashback that can be redeemed anytime
- Pay your bill instantly with Neo's #1 rated financial app
NerdWallet's take
NerdWallet's takeA straightforward, no-frills option for credit builders. This version of the Home Trust Secured Visa comes with a low $59 annual fee and 14.9% interest rate. A no-fee version is available, but comes with a higher 19.99% interest rate. Best for: Credit builders who value low interest rates over perks and rewards.
Pros
- Low 14.9% interest rate.
- Broad security deposit range of $500 to $10,000.
- No-fee option available.
Cons
- No rewards.
- Not available in Quebec.
Card details
Card details- $59 annual fee.
- No fee option available with a higher interest rate.
- $500 minimum security fund deposit required.
- $10,000 maximum security fund deposit.
- Hard credit checks are made on Home Trust Secured Visa applications.
- Credit activity, including every payment, is reported to TransUnion and Equifax, the two major consumer credit bureaus in Canada.
- Ability to upgrade to an unsecured credit card.
- Manage your account and billing with online banking.
- Cardholders can choose between a card with no annual fee and 19.99% interest or an annual fee of $59 and 14.90% interest.
- Protection against fraud through Visa’s Zero Liability Policy.
- Preferred rates: 14.90% for purchases, 19.80% for cash advances.
- To be eligible, you must have a source of income and cannot currently be in bankruptcy. You must be able to provide security funds and be a Canadian resident of the age of majority in the province or territory where you live. The Home Trust Secured Visa Card is not available to Québec residents.
Rewards breakdown
Rewards breakdownCash back on groceries.
Cash back on eating & drinking.
Cash back on transportation.
NerdWallet's take
NerdWallet's takeKOHO’s baseline prepaid tier earns 2% interest on card balances and 1% cash back on eligible dollars spent — no credit check required. But be ready to set up qualifying deposits to unlock the $0 fee; otherwise, you’ll pay to use this card monthly. Best for: Anyone with low or no credit who wants an instant-approval opportunity to earn cash back on everyday purchases.
Pros
- No credit check required.
- 1% cash back on groceries, transportation, food and drink purchases.
- Earns 2% interest on your card balance.
Cons
- Not a credit card, so you can’t build your credit.
- Must maintain at least $1,000 in monthly deposits to waive the card fee.
Card details
Card details- Earn 1% cash back on groceries, eating & drinking, and transportation. Up to 6.5% extra cash back at selected merchants.
- Earn 2% interest on both your spending and savings accounts. Your funds will also be eligible for CDIC insurance.
- Get access to a cash advance of up to $250* at 0% interest with Cover.
- Free Credit Score.
- Send money to 190+ countries with KOHO’s International Money Transfer feature and enjoy the best exchange rates, no hidden fees, and transfers that arrive within 30 minutes*.
- Grow your credit by an average of 31+ points in just 4 months with Credit Building* for $10 / month.
- Grow your credit by paying your rent with your KOHO card. KOHO will report monthly rental payments to Equifax and help grow your credit score.
- Grow your credit by paying your rent with your KOHO card. KOHO will report monthly rental payments to Equifax and help grow your credit score.
- All KOHO plans come with a free 30-day trial so you can see if it suits you.
- $48 annually.
- Get this plan for $0 when you set up a recurring Direct Deposit or deposit $1000 each month into your KOHO account.
- *Terms and conditions apply.
Rewards breakdown
Rewards breakdownCash back on grocery purchases.
Cash back on recurring bill payments.
Cash back on all other purchases.
NerdWallet's take
NerdWallet's takeSnagging 3% cash back on groceries will help you rack up the rewards. That said, monthly spending caps on boosted earn rates could hamper your cash-back accumulation if you’re a bigger spender. Best for: Food shoppers who want easy access to their cash-back rewards.
Pros
- No annual fee.
- Redeem cash-back rewards of as little as $1 whenever you want.
Cons
- Highest cash back rate only applies to the first $500 spent per billing cycle.
- Low 0.5% baseline rate.
Card details
Card details- Welcome offer: Get 5% cash back in your first 3 months.*
- Then get 3% cash back on grocery purchases, 1% cash back on recurring bill payments and 0.5% unlimited cash back on all other purchases!*
- Now earn the highest cash back on groceries in Canada without paying an annual fee!†
- Get a 0.99% introductory interest rate on Balance Transfers for 9 months, 2% fee applies to balance amounts transferred.*
- No Annual fee.*
- Want to get your cash back ASAP? Now you can redeem your cash back anytime through direct deposit, as a credit on your statement or into your BMO InvestorLine account.*
- Extended Warranty.*
- Purchase Protection.*
- Receive a discount on car rentals.*
- Enjoy three months of Instacart+ and a $5 monthly Instacart credit when you enroll your eligible BMO Credit Card.*
- *Terms and conditions apply.
- BMO is not responsible for maintaining the content on this site. Please click on the Apply now link for the most up to date information.
Methodology
BACK TO TOPBest credit cards to rebuild credit in Canada
| Card | NerdWallet rating | Annual fee | Interest rates | Rewards rate | Apply Now |
|---|---|---|---|---|---|
| Secured Neo Mastercard | APPLY NOW on Neo's website | ||||
 APPLY NOW on Neo's website | 4.1/5 | $7.99/Month | 19.99%-29.99%/22.99%-31.99% | 1%-5% | |
| Home Trust Secured Visa Card | APPLY NOW on Home Trust's website | ||||
 APPLY NOW on Home Trust's website | 2.8/5 | $59 | 14.99%/19.80% | N/A | |
| KOHO Prepaid Mastercard (Essential Plan) | APPLY NOW on KOHO's website | ||||
 APPLY NOW on KOHO's website | 4.9/5 | $48 | N/A | 1%-6.5% | |
| BMO CashBack® Mastercard®* | APPLY NOW on BMO's website | ||||
 APPLY NOW on BMO's website | 4.5/5 | $0 | 21.99%/23.99% | 0.5%-3% | |
Types of credit cards for bad credit
For many people with bad credit, getting a credit card can be hard. Issuers look at your score to determine your eligibility and may not want to give you a card if your score is low. But you often need a line of credit to help rebuild it — a catch 22.
There are specific types of cards that can help in this situation:
Secured credit cards. This type of card uses assets instead of your credit score to guarantee funds. For example, an issuer may require a $2,000 security deposit before giving you a card. In most cases, your deposit is the same amount as your credit limit. So, if you put $2,000 down, you’d have a $2,000 credit limit. Your deposit would then be used to collect on unpaid balances if you failed to pay the bill. Some issuers may check your credit to determine how high or low your security deposit needs to be.
Prepaid cards typically don’t report your transactions to the credit bureaus, as you’re technically not borrowing any money. It’s your money, loaded onto the card, which you then use. This means the payments you make won’t impact your score. However, some card issuers, such as KOHO, offer credit-building programs you can add to your prepaid card. You’re essentially given a very small line of credit that gets paid back each month, helping to build your score.
Credit cards for newcomers. Even if you had great credit in your country of origin, you can’t bring it with you and will have to rebuild your credit here. Some banks offer credit cards specifically for newcomers. They don’t require the same level of credit history as other cards, allowing people with no to minimal credit to apply.
How to rebuild your credit in Canada
If your credit has taken a hit, don’t panic. You can safely rebuild your credit and restore your score to its former glory. If used responsibly, credit cards are one way to do this.
How long does negative information stay on your credit report?
In general, negative data, such as missed credit card payments, can live on your credit report for up to six years. Bankruptcies can stay on your report for up to seven years, depending on where you live.
When you apply for a credit card, the bank or financial institution runs your credit. They then use this information to determine your eligibility, credit limit and interest rate, among other things. Negative information can lower your score, which makes lenders wary of working with you. This can lead to declined applications or higher interest rates.
But it’s not all doom and gloom. By rebuilding a string of positive information, you can balance out the negative, until it finally drops off the report. This process may take some time, but a little effort can go a long way.
Factors that can influence your score
According to the Financial Consumer Agency of Canada, the following factors may have positive or negative impacts on your credit score:
Length of credit history in Canada.
Length of time each line of credit has been on your report.
Credit card balances you carry from month to month.
Regularly missed payments.
Amount of outstanding debt.
Total credit utilization.
Recent credit applications.
Types of credit, such as credit cards or mortgages.
Collection agency history.
Bankruptcies.
It’s wise to keep all of these factors in mind when rebuilding your credit. While a credit card can help boost your score when used responsibly, it may not garner the results you want if one or more of the above factors is dragging down your score.
How to use a credit card to rebuild credit
A credit card is a type of revolving credit, which means you can borrow up to a set amount (the credit limit), pay it back and then borrow it again. You can use this system to your advantage by showing lenders you are a responsible borrower and can repay loans in a consistent fashion.
5 tips for rebuilding your credit with a credit card
Get a credit card with a low credit limit. Keeping the limit low can help you avoid racking up large bills you can’t afford to pay.
Only use the card for manageable purchases you know you can afford. Think of this card as your path to rebuilding credit, not a payment tool. You’re only using it to show your creditworthiness, not to buy superfluous items.
Always pay your credit card bill on time and in full. While paying the minimum payment due technically has a positive impact on your score, you want to avoid accumulating debt. If you have a high percentage of debt compared to your credit limit, it can look bad to lenders.
Aim to use no more than 30% of your total credit limit each month. For example, if you only have one credit card with a limit of $1,000, try to use no more than $333 per month. This is the sweet spot for lenders. It shows you are using credit responsibly and not living beyond your means.
Set up automatic payments to help you stay on top of your bills. It’s all too easy to lose track of time or get too busy and forget to pay your credit card bill. Unfortunately, credit bureaus aren’t very forgiving about missed payments. With auto-pay, money is taken automatically from your bank account each month so you don’t have to worry about remembering to pay.
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Hannah Logan
Sandra MacGregor