Best Credit Cards for Building or Rebuilding Credit

Canadian Flag Blowing in the Wind

By Kimbery Ashington

  I

June 27, 2020

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Canadian Flag Blowing in the Wind

Canada's Best Credit Cards for Building or Rebuilding Credit

By Kimbery Ashington

  I

June 27, 2020

Are the Banks Giving you Trouble With Credit Card Approvals?

You know, we’ve all been there.

I think I can speak for the majority of those who have ever applied for a credit card when I say sometimes the banks just don’t cut you any slack. If you are dealing with any of the following, you may find this article has great value to offer.

Why Are the Banks Denying My Credit Card Application?

  • Bad Credit
  • No Credit
  • Filed for bankruptcy
  • Past foreclosure
  • Students trying to build credit for the first time
  • Immigrant status with no credit history
  • Recently rejected for mortgage application.
  • Denied loans and credit cards
4/5

Home Trust Secured Visa

Choose from 19.99% with No Annual Fee or 14.90% with $59 Annual Fee (paid yearly or $5/monthly) Credit limit range of $500 – $10,000 (Your choice with equivalent deposit)

4.5/5

Refresh Financial Visa

With guaranteed approval this card is a great opportunity to boost your credit ratings No credit checks or minimum income required Purchase rate @ competitively  low 17.99% annualy*

4/5

Capital One Guaranteed Secured Mastercard

Secured funds dictate your card limit • Credit limit starts @ $75 and can be as high as $300 $59 Annual Fee.  19.8% A.PR. Guaranteed Approval (upon 4 conditions met.)

Best 3 Secured Cards for Building Credit

At a Glance

$0 or $59

Annual Fee

$59

Annual Fee 

$48.95

Annual Fee 

Distinguishing Features

Choose a greater range between some of the best cards for rebuilding credit

Credit limit range between $500 – $10,000

Choose between 2 percentage rates

-With $0 Annual Fee-

Standard annual percentage rate of 19.8%

-With $59 Annual Fee-

 Improved annual percentage rate of 14.90% 

Credit Card gives access to online Canadian shopping

Gives access to online purchasing just like a regular Visa. Link to Paypal, shop for clothes or use services such as Amazon and Netflix

Choose your range between some of the best cards for rebuilding credit

Credit limit range between $75 – $300

Credit card with everyday low rate

Purchase rate at a competitively low 17.99% annually

Access your Canadian Account Online

Manage account with mobile app, set payment alerts and check balance in real time.

Choose a greater range between some of the best cards for rebuilding credit

Credit limit range between $200 and $10,000

Credit card with everyday low rate

Purchase rate at a competitively low 17.99% annually

Included Credit Report and Score

Online access to Refresh’s “Black Tier” credit building experience. Check your report anytime, execute  simulations and other fringe benefits.

Required Deposit

All secured credit cards require a deposit. The number of funds you supply will determine your credit limit. This is an important part of the process, however in the long run, your credit score can benefit tremendously.

Perks

Credit Card with Extended Purchase Warranty

Purchase Protection on approved merchandise. Items are insured against theft or damage for up to 90 days. 

Mastercard zero liability protection built in

Offers typical MasterCard perks such as Zero Liability for unauthorized purchases and Global Emergency Card replacement if lost or stolen

Build credit by using credit. Refresh allows you access to application approvals when other credit cards companies can deny you.

What is the Difference Between a Secured Card and an Unsecured Card?

A secured card is just a credit card that requires the cardholder to supply a deposit to the credit card lender. That deposit is used as a back up in case the cardholder defaults on their payments.

In most cases, the deposit amount is equal to the credit limit of the card. For instance, if you are approved for a credit limit of $500, then you would be required to supply the lender with a deposit of $500.

That’s easy enough to understand, right?

Once your credit score has improved to your liking, you then can choose to cancel your account, at which point your credit security deposit will be returned to you.

An unsecured credit card is really just a ‘typical’ card that most people associate with when they think of a Visa, Mastercard, or American Express. No security deposit is required. If you have been approved for such a card, then this would indicate that you have a decent credit score and probably don’t have any need for a secured card with a which requires a deposit.

However, if you still need to improve your score, and have not yet applied to any financial institutions, then you should consider choosing an unsecured card that will help you build better credit while simultaneously enjoying some earned perks that the secured cards don’t offer you.

I Pay Cash for Almost Everything. Why Should Having a Good Credit Report Matter To Me?

You might not be thinking of your future right now. But you should.

Let’s say in a few years you decide you’re done with the rental market and instead you would like to purchase a home.

Without a good credit score, you won’t have access to the best mortgage rates banks have to offer during any fiscal period. Locking in @ 3.5% A.P.R. vs. 5.25% A.P.R. might not matter to you over the course of 5 years or less. However, that difference of 1% or 2% over an entire standard 25-year amortization can result in tens of thousands of dollars wasted. That’s a big loss.

Acquiring a good credit score can definitely open up opportunities during your mortgage, auto loan, and credit card application. In addition, it can be advantageous when applying for a property rental such as an apartment, condo, or townhouse.

It’s not uncommon for a landlord to run a credit report prior to accepting your application and having you as their tenant. A good credit score and report can give you the edge, especially if there are others applying to the same rental property.

And of course, having a rock-solid credit score can give you access to the best travel and cashback rewards credit cards available to Canadians from the western waters of Victoria, B.C. to the breezy cliffs of  St. Johns, Newfoundland. The crème de la crème.

Wouldn’t it Be Easier to Just Get a Prepaid Credit Card?

Sure, you could always opt for a prepaid card.

They are quick and easy. You can pick them up at any grocery or convenience store. There’s no application, no credit check, no chance of being denied. You just load the funds onto the card and you’re good to go.

What could be better than that?

The problem with these prepaid cards is that when you make a purchase and then go to load more funds onto the card, there’s no record of your transactions. In other words, your accounts and monthly invoices are not sent to the Canadain Credit Bureaus’ databases.

It doesn’t get reported, and thus it won’t allow you any opportunities to improve your credit rating.

Moreover, not all merchants or vendors will accept payment in the form of a prepaid card.

On the other hand, a secured Visa looks and acts like a real Visa. You get all the benefits that come with having an official network card, such as Visa or Mastercard.

For secured accounts this includes, but is not limited to:

  • Usage of online merchants
  • Theft and damage insurance
  • Acceptance worldwide in over 200 countries

If I’ve Already Got a Bad Credit Score, Shouldn’t I Stay Away From Credit Cards?

On the contrary.

If you’ve pushed yourself into the boundaries of the “Bad Credit Zone” then using a credit card can actually help boost your score. That is to say, only if used responsibly and intuitively.

If you…

  • Pay for items that you require for day to day living – such as groceries and gas or transit costs
  • Pay your credit card on time

Ideally, this should be immediately (consider using online banking for convenience)

or

At the very least, before the interest free period ends. This is usually 21-25 days from the date of purchase, depending on the financial institution.

  • Never go over your limit

Then…

Within a few months, don’t be surprised when you check your credit report and see that your score has risen by 10-20 points. Within one years time you can make tremendous progress and possibly enough to finally get that dream home you’ve been wanting.

Begin Forming Better Habits Leading to Successful Money Management.

By utilizing a credit card properly, you can flip that bad credit on its back, and jump start your credit score. The key here is to modify your conventional spending habits and abstain from making impulsive purchases. Start using your card for items that are necessary for living.

Refrain from making purchases that are deemed to be considered “Retail Therapy“. This type of impetuous spending will lead you quickly down into the rabbit hole once more. 

It’s what we are trying to avoid avoid. 

4.3/5

TD Emerald Flex Rate Visa

No minimum Income Requirements. Variable A.P.R. available: TD prime + 4.50% – 12.75%. Rate varies by credit score and report. Annual Fee $25. Benefits include: Discounted car rentals. Extended warranty protection.

4.5/5

RBC Classic Low Rate Visa

Enjoy a fixed low annual rate of 12.99% Annual fee is $20. No security deposit required! Boost your credit rating discreetly.  Link your card with Petro Points and save 3¢ per every litre on fuel.

4/5

Capital One Low Rate Guaranteed Mastercard

Annual Fees: Your choice or $59 or $79 • Annual Percentage Rate (for both purchases and balance transfers): 19.8% with $59 Annual Fee or 14.9% with $79 Annual Fee • Build credit and improve bad credit with responsible use • Price protection, purchase assurance and extended warranty for items purchased using card.

Best 3 Unsecured Cards Cards

At a Glance

$20

Annual Fee

$25

Annual Fee 

$59 or $79

Annual Fee 

Distinguishing Features

Credit card with everyday low rate

Enjoy a fixed low annual rate of 12.99% for:

Receive Rewards when buying groceries
Low everyday rates for cash advances
Transfer Balance to Low Rate Credit Card
  • Everyday Purchases
  • Cash Advances
  • Balance Transfers
All purchases made with this cards are protected from theft, damage and loss for 90 days

90 days protection from date of transaction against stolen, lost or damaged merchandise 

Included Credit Report and Score
Boost your credit rating discreetly
Get a great variable low rate credit card with a good credit score

Variable A.P.R. available

Canadian Prime Rate
Get approved for a Low Variable Rate credit card with a good credit report
Included Credit Report and Score
  • Canada’s Prime Rate
  • Add between 4.50% – 12.75%
  • The better your score, the lower your rate
All purchases made with this cards are protected from theft, damage and loss for 90 days

90 days protection from date of transaction against stolen, lost or damaged merchandise 

Credit card protection against fraudulent purchases

Includes Pay Wave, Zero Liability and Instant Fraud Alerts

Choose between 2 percentage rates

With $59Annual Fee

Standard annual percentage rate of 19.8%

or

With $79 Annual Fee

 Improved annual percentage rate of 14.90% 

Credit Card with Extended Purchase Warranty
Price protection, purchase assurance and extended warranty for items purchased using card
Comprehensive Travel Insurance with Credit Card

Complete Travel Benefits when charging your fare to Capital One Gold Card

Special Offers

Link your RBC visa to petro points card for more savings at the pump
Link your card with Petro Points and save 3¢ per every litre on fuel.
Pay with a credit card and receive a generous discount on car rentals

Save at least 10% on discounted car rentals in North American with Avis and Budget

Get your application approved easily by choosing one of the best cards for rebuilding credit available today

Guaranteed Approval – If you aren’t approved for the Gold Card you can still be approved for the secured card

How Do I Decide Which Card to Apply For?

Generally speaking, if your score is below 600 then you might not be approved for an unsecured card.

If you’re right on the cusp, say between 595 to 599 and your score has been crawling upwards as of recently, then you might try applying for an unsecured card with an issuer of greater leniency.

If your score is well above 600 and you have good credit utilization with your other credit accounts, then I would start by applying to a bank or lender that offers an unsecured card. Even for those with no credit history as of yet, starting off with an unsecured card is not a bad idea.

A Word to the Wise.

Do your homework.

Make sure that you’re applying for the right card that suits your needs.

If you apply and are not approved then do not apply for a second unsecured card. Doing so can damage your score more than you can afford.

Every time you apply for a credit card, line of credit or loan it gets reported to the credit bureau‘s and can affect your score negatively. For those unaware of this process, this is called a credit check.

If your score drops by just a couple of points, as a result of the application process, but you are ultimately approved, then no damage will be done. Especially if you start using that card right and in the ways we’ve covered earlier in this review.

Doing so will negate any negative score fluctuations created by that credit check.

If you are not approved, then I suggest it’s time you start looking for a secured card, as these have no credit check, and no minimum income required. With this type of card, you can rest assured knowing that you will meet the requirements and your application will be authorized.

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