Canada’s Best Credit Cards for December 2024
Dec 1, 2024NerdWallet Canada’s picks for the best credit cards include top contenders across numerous card categories. Compare these options to find the ideal card for you.
Choosing the best credit card is part art, part science. From student-friendly starter cards to options boasting premium travel rewards, no single credit card is better than all others in all categories — or for everyone. We’ll help you narrow down the search.
Enhanced Intro Offer: Earn up to $1,500 in value including up to 50,000 Aeroplan points and no Annual Fee for the first year. Account must be approved by January 6, 2025. Terms and conditions apply. 50,000 Aeroplan points offer not available when applying directly through TD site.
Best overall credit cards in Canada
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Card detailsBest payment network credit cards
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BACK TO TOPEnhanced Intro Offer: Earn up to $1,500 in value including up to 50,000 Aeroplan points and no Annual Fee for the first year. Account must be approved by January 6, 2025. Terms and conditions apply. 50,000 Aeroplan points offer not available when applying directly through TD site.
Different types of best credit cards
Looking for certain types of credit cards? Check out more of our picks for different categories of best credit cards:
Beginner’s guide to credit cards in Canada
A credit card is part of daily life for many Canadians. Using your card to pay for purchases can be more convenient than using cash. Plus, with the best credit cards, you can manage your expenses and earn rewards at the same time.
How credit cards work
Think of credit cards as a short-term loan from your credit card provider. You make purchases with your card and pay for them later.
One thing that makes credit cards appealing is that there’s an interest-free period. As long as you pay for all charged purchases in full by your statement due date, you won’t have to pay interest in exchange for borrowing the issuer’s money for a few weeks.
A typical credit card transaction would look something like this:
You charge a purchase to your cardWhen making purchases, choose credit as your form of payment. You’ll then tap, insert or swipe your card to initiate the payment. You may also be required to enter your pin number. If you’re making payments online, you’ll need to enter all your card information manually.
Wait for your purchase to be authorizedThe payment terminal will contact your credit card company to confirm the purchase amount.
The merchant gets paidOnce approved, your credit card provider sends the merchant the funds. The merchant does pay a small fee to your credit card provider for this service.
You get your bill and pay Once your bill arrives, it’ll list your transactions, minimum payment requirement and due date. If you only make the minimum payment, you may see some interest charges on your next bill. To avoid this extra cost, pay your bill in full by that date so no interest is charged.
Ideally, you’d be able to pay your bill in full each month, so these interest charges would not apply. If you’re worried about your ability to do so, seek out a low-interest card to reduce your financial risk.
How credit card interest works
Credit card companies charge interest on unpaid balances. You don’t owe any interest when you pay your card’s balance in full. But what happens if you don’t pay off your credit card balance? Let’s take a look.
Say your card has a 19% interest rate — which is pretty standard. You pay $100 to buy a pair of concert tickets for yourself and a friend. But how much interest will those tickets accrue if you don’t pay your credit card balance and your card’s grace period has passed?
Here’s how to calculate credit card interest:
Find your daily rate. Your card’s 19% interest rate is an annual rate. To find your daily rate, divide your annual interest rate by the number of days in one year.
19% / 365 = 0.00052
Find your daily interest accrual. Next, determine how much daily interest you’ll accrue on your unpaid balance by multiplying your daily rate by your average daily balance — which in this case, is the $100 you spent on concert tickets.
0.00052 x $100 = $0.05
Multiply by the number of days in your billing cycle. To determine how much interest your unpaid balance accrues over one month, multiply daily interest by the number of days in your billing cycle.
$0.05 x 30 = $1.50
» MORE: Don’t want to crunch the numbers by hand? Figure out how much interest you’d owe with our credit card interest calculator.
How credit card rewards work
With certain credit cards, you can earn rewards when you make a purchase. The type of rewards you earn and your earn rate differ by card, however.
Types of rewards you can earn
The types of rewards you can earn can generally be broken down into four categories:
Cash back. For every purchase you make, get a set percentage back in cash. The pay-out date for your cash back earned differs depending on the card. It can be monthly, annually or when you reach a minimum threshold.
Travel benefits. Credit card travel rewards programs let you earn points or miles when you make purchases. You can use your rewards to offset the cost of flights, hotels, car rentals, vacation packages and more.
General rewards. Most rewards programs offer the option to redeem the points you’ve earned for general merchandise, gift cards, experiences, entertainment, financial rewards, and more.
Store perks. Many merchants have a co-branded credit card. The points you earn can be used in-store or online at any participating stores. Groceries and merchandise are typical redemption options for store rewards cards.
Earn rates
The earn rate is a critical factor when it comes to getting rewards. Every rewards card has a base earn rate, but some cards also have higher earn rates on certain highly lucrative purchases. Knowing the difference between the two can help you maximize your rewards.
Base earn rate. You’ll get this for any purchase that doesn’t fall into an increased earn rate category, or after you’ve hit any applicable limits in those categories. For example, you might get 1% cash back or 1 point per dollar spent.
Accelerated earn rate. Getting extra points on bonus categories that line up with your regular spending is a great way to rack up rewards even faster. For example, some of Canada’s best cash-back credit cards may give you 4% back on groceries or 2% on gas.
The rewards process
Earning rewards can look different depending on the card and issuer, but generally speaking, the process works like this:
Make a purchase with your credit card. The purchase must be considered eligible by the issuer to earn rewards.
Your rewards are calculated. Depending on the merchant category and your earn rate, your credit card provider calculates how many rewards you’ve earned. They’ll also factor in any promotions where you’ll earn additional rewards.
Rewards are deposited into your account. Cash-back rewards may be immediately visible in your account, but you may not be able to cash them out until a certain date or when you hit a certain threshold. If you’re earning travel or store rewards, you’ll either see your points immediately or at the end of the month when your statement posts.
Redeem your rewards. In most cases, redeeming your rewards requires you to log in to your account. Redeeming cash back may only take a few clicks, but if you’re looking to redeem travel rewards, you may need to go through a travel portal or book the travel first.
Tracking your rewards
In most cases, logging in to your account will allow you to see how many rewards you’ve earned. Most credit card providers show how many points you’ve earned for each transaction as well as a running total, so you’ll know exactly where you stand. Additionally, credit card statements often have a more detailed breakdown of any extra rewards that you may have earned.
Your rewards typically show up when the transaction posts. Bonus rewards earned from special promotions should show up on your monthly statement. It’s also worth mentioning that any special rewards you get, such as a companion voucher, may take longer to appear in your account.
As for your welcome bonus, you usually need to track that on your own. For example, let’s say you need to spend $3,000 in the first three months of card membership to get your intro offer. Although you’ll usually get your bonus immediately after passing the minimum spend requirement, it’s up to you to check if points land after you’ve spent enough.
How to choose the right credit card
With so many credit cards available, narrowing down your choices can be a challenge. When choosing a credit card, there are numerous factors to consider — chief among them: card requirements.
Different cards carry different credit score and income requirements. To ensure you meet the eligibility criteria, learn how to check your credit score. And be mindful of personal or household income requirements, too — you’ll often encounter these criteria with high-tier luxury cards.
Credit card features to compare
Consider the following when deciding which credit card is right for you:
Annual fee. Decide if you want to pay an annual fee or not. Cards that have an annual fee typically come with better benefits.
Rewards. The type of rewards you want to earn will quickly help you narrow down your choices.
Earn rate. Try to choose a card with increased earn rates in the categories where you naturally spend more.
Welcome bonus. If you’re comparing similar cards, choose the one with a better sign-up offer.
Additional perks. See if there are any additional benefits you want, such as no foreign transaction fees, travel insurance, extended warranty, etc.
What credit score is needed for a credit card?
Canadian credit card issuers rarely disclose required credit scores, which makes it hard to know your chances of approval when comparing credit cards. However, higher scores generally mean better chances of approval, and that’s true regardless of the type of credit youâ