Best credit cards for newcomers to Canada

If you’re moving to Canada you might be asking yourself what are the best credit cards for newcomers to Canada?

This article will help answer that and give you the information you need about the credit card market to make an informed choice.

When we emigrated from the UK to Canada almost five years ago, getting our Canadian finances sorted out was of course one of our priorities, and a big part of that was figuring out how to get the best credit cards for newcomers to Canada.

So, channelling all the things we were confused about and everything we wish we’d known when we first arrived, we’ve put together this guide to help you navigate your way to getting a credit card and building your Canadian credit history.

Let’s jump in…

Best credit card for new immigrants Canada: the basics

The range of credit cards that you will have access to as a newcomer or immigrant to Canada is going to be more limited than people who have been in Canada for a number of years.

This is essentially because when you first arrive in Canada you won’t have a Canadian credit score or a credit report yet: you’ll have no credit history.

Your credit score and credit history in Canada are separate from any credit history you have in another country.

Your credit report and credit score are key measures that financial institutions use to determine whether they are going to give you credit. And it can take years of prudent financial management to build up an excellent credit score.

Most financial institutions won’t consider the credit history you might have in a foreign country when deciding your creditworthiness. They will only look at your Canadian credit report.

So how do you get a first time credit card with no credit history as a newcomer to Canada?

There are three ways to get a first credit card in Canada with no credit history:

• Through a Canadian bank “newcomer to Canada” program
• A secured credit card
• Through a financial institution that will recognize your non-Canadian credit history

Let’s touch on each of those options…

All of the Big 5 banks in Canada (and some others) have programs that are designed for newcomers to Canada and all guarantee a credit card.

When you open a bank account with them on their newcomer program each of them guarantees to give you a credit card even if you don’t have credit history.

You do not need to be a permanent resident of Canada to get a credit card through the bank’s newcomer programs. But you do need to be a Canadian resident.

You can read more about banking in Canada and our pick of the best newcomer packages here.

Through one of the bank’s programs is very often going to be your best first credit card Canada.

The next option if you have no credit history at all in Canada is a secured credit card. A secured credit card is where you put down an amount of money as a security deposit which becomes your credit limit on the card. You can read more about what this means and your options of cards in the section below.

The last option is getting a credit card through a company that will recognize your credit history from outside Canada. Most banks won’t do this but American Express have a special program for this very thing. You can read more about it in the section below.

It’s a really important point that these are your options only if you have no credit history at all yet in Canada. If you’re employed and have been in Canada even for a couple of months, your options are likely to include a lot of the general credit card market.

See more on this below.

Our recommendations of the best credit cards for newcomers to Canada cover options for people with zero credit history and those who do have some already.

How to get a credit card in Canada

There are some basic eligibility requirements that most credit card companies will require in order to issue you a credit card:

• You must be a Canadian resident. For some cards you will need to be a Permanent Resident or citizen.
• Meet the age of majority in your province or territory. This will either be 18 or 19.
• For unsecured credit cards there will be requirements around previous bankruptcies.
• Have a credit score if you’re not applying under a newcomer scheme or for a secured card.
• Have a social insurance number.

Canadian credit score and credit report

The key things that will determine what credit cards you can get is your credit score and credit report, often referred to as your credit history.

Therefore it’s important to understand what they are, and how to monitor and improve them.

Your Canadian credit report is created when you apply for credit or take out a loan for the first time in Canada. So when they open a credit card as part of your newcomer banking package, for example, your credit report will be created if it doesn’t already exist.

It will also be created by any other sort of credit check that is done on you in Canada.

You can check your credit report in Canada using a free service like ClearScore (more info on this in the section below).

Keep in mind any transactions that don’t involve credit have no impact on your credit report, so using your bank debit card for example doesn’t affect your credit score at all. i.e. you can’t improve your credit score just by using your debit card.

Credit reports and credit scores essentially work the same way in Canada as you’re probably already used to.

Your credit score is a measure of your creditworthiness. Higher scores indicate to financial institutions that you are a safe bet to give credit to – be that for a credit card or any other type of loan.

Your credit score is a number in the range of 300 to 900. And basically the higher the number the better credit score you have.

Your credit score is part of your credit report. Your credit report contains records of all your interactions where you’ve borrowed money or applied for credit.

So your credit report contains detail of your credit cards and loans; both past and present. And when you’ve applied for any type of credit.

The term credit history is just the generic term for your credit report.

Your Canadian credit report is separate and different to the credit report and score you might have in another country.

Credit scores and reports in Canada are done by the Equifax and TransUnion credit bureaus.

We’ve produced a comprehensive article about how to improve your credit score in Canada here if you want more information.

Knowing your credit score so you can get the best credit card possible

It’s a really good idea to know your credit score and keep an eye on your credit report. You can do this easily for free using an online service.

Keeping track of your credit score is good for a number of reasons.

Knowing your credit score will give you an idea of how likely it is that you’ll be accepted for a credit card.

If you’ve applied for any sort of credit in Canada then you’ll have a credit report.

So even if you’re fairly new to Canada you might have a decent credit score which would allow you to get credit cards that you might otherwise think wouldn’t be possible. 

Monitoring your credit report is also a simple way to spot any fraudulent activity of someone trying to use your name to apply for credit.

It’s simple to join and once you’re signed up, you can see your score and credit report.

You can also set notifications for score or report changes which is handy for spotting in fraudulent activity.

Given that it’s free, it really is worth having.

Canadian credit card landscape

As with banking in general, the landscape for credit cards in Canada is dominated by the Big 5 banks. Those are:

• Scotiabank
• TD Canada Trust
• CIBC
• RBC
• BMO

Each of these banks have a range of credit cards to cater to different customer profiles and preferences.

The Big 5 are by no means the only entities who issue credit cards however, there are a whole bunch of other financial institutions who issue credit cards.

These smaller players can provide cards with better rewards than the Big 5 banks so they shouldn’t be ruled out.

What credit cards are accepted in Canada?

Visa and Mastercard are the most widely accepted credit cards in Canada and most places take card.

American Express is less widely accepted but is still accepted in many places.

I have an American Express as my main spending card and I’d say it’s accepted in about 70% of the places I spend in.

But you will ideally want to have a secondary card for the sizeable chunk of places that don’t take American Express.

Discover card is less widely accepted than American Express and is not available in Canada anyway.

Canadian credit card features

In this section we’ll cover some of the differentiating factors between credit cards.

It’s these features, and which options work for you, that will allow you to decide which is the best credit card for you.

No-fee or fee

You can get a credit card with no annual/monthly fee or one with a fee.

Generally the fee credit cards include extra benefits such as insurance (travel insurance and car rental insurance for example) and more generous cashback or reward points.

The no-fee credit cards won’t normally include enhanced benefits but you can (and should) still get a card that offers some benefits like cashback or points which can be redeemed for rewards.

Regardless of whether you have a no-fee or fee card, the same protections from unauthorized use provided by the payment card networks (like Visa or Mastercard) apply.  

Rewards or cashback

Most credit cards in Canada (and all the best credit cards for newcomers to Canada recommended in this article) have some sort of cashback or rewards schemes:

Cashback

Cashback basically means that for every dollar you spend on your card you get a percentage back in credits that you can use to reduce your credit card bill.

So if you see that a card has 2% cashback that means for every dollar you spend you get 2 cents in statement credit.

One thing to watch out for with cashback offers is that sometimes the bank that issues the card, the card issuer, will put a limit on how much cashback you can actually get.

They might word this as the maximum actual cashback you can get or the maximum spend you will get cashback on.

Another thing is there can often be special joining offers with a higher percentage cashback. So 4% instead of the regular 2% for 3 months, but up to a maximum cashback of x dollars.

Some card issuers give you options of what you can do with your cashback beyond just using it as credit against your monthly statement. You might be able to transfer the credit to your chequing or savings account, for example.

Most credit cards have different cashback rates for different categories of spend. You might get 2% for grocery spending but only 1% for gas and dining and only 0.5% for everything else.

So the best card for you will depend on what kind of purchases you will be putting on card.

Also, keep an eye on what the minimum cashback you have to accumulate is before you can redeem it. If you don’t spend very much money on the credit card it could take a while before you can redeem your cashback.

Rewards

Rewards are similar to cashback in that the number of rewards you get is linked to how much you spend on your card.

So you get a percentage number of points for how much you spend on card.

What you can actually then do with these reward points varies from card to card.

Flights, hotels, physical goods, experiences and cinema tickets are some of the common ways you might be able to redeem reward points. Each credit card will have details of the reward scheme and what your points can be used for.

The reward scheme might either be a standalone scheme run by the bank or it could feed into other loyalty programs like Scene+ or PC Optimum.

Many reward programs also allow you to redeem your reward points as statement credits. So essentially the act like cashback if you want them to.

It important that you look at how many points are needed for each redemption option so you can figure out if it’s a good deal for you. A lot of points might not translate to a lot of rewards!

Welcome bonuses

Many of the best Canadian credit cards for newcomers will have welcome bonuses for new customers.

These offers can often be really quite compelling and be the differentiator in what is the best credit card for newcomers to Canada. 

So it could be a bonus of x number of reward points when you open the card. Or x number of reward points if you spend x dollars in the first 3 months.

For cashback the new customer offer is often a higher cashback percentage in your first x months. Often up to a maximum amount of cashback.

Secured and unsecured credit cards

Credit cards can either be secured or unsecured.

An unsecured credit card is one in which you, the customer, doesn’t need to put down any money as a deposit or security.

A secured credit card is where you, the customer, need to pay the financial institution a sum of money as security in order to get the credit card.

The security you put down is just a deposit, it should be returned by the financial institution when you close your account.

Normally the sum of money that you need to put down is the credit limit you’ll get on the credit card. So if you have to pay a $500 security then your credit limit will be $500.

So why would anyone want a secured credit card?

A secured credit card allows people with bad or no credit history to get a credit card and start building their credit score.

Since you’re putting down money to cover the credit, secured credit cards are lower risk for the financial institution issuing the credit card.

Because of this lower risk, secured credit cards are often the only option for people with no or bad credit history who are struggling to get an unsecured credit card.

Secured credit cards allow you to improve your credit score because the usage gets reported to the credit bureaus. So if you pay your credit card each month your credit score will improve.

This is why you might want a secured credit card rather than just paying for things with your bank account debit card. Debit card usage is not reported to the credit bureaus and so does not affect your credit rating.

Apart from the security you put down they work in the same way as an unsecured credit card. The card will be Visa or Mastercard so you can pay with them at all the same places you would an unsecured card.

In terms of new immigrants to Canada, if you don’t want to get a credit card through one of the Big 5 banks’ newcomer programs, secured credit cards could be an option.

They’re also an option if you’re just looking for a supplementary credit card (maybe to help grow your credit rating faster) and you don’t have a good enough credit rating for another unsecured card yet.

I’ve recommended a couple of secured credit cards in the recommended cards below.

Foreign transaction fees

Most credit cards in Canada will charge you a percentage fee for every transaction you make that is not in Canadian dollars.

Normally the fee is between 2.5% and 3%. That means that the bank will charge you an additional 2.5% – 3% on top of the amount you’re putting on your card.

So if you’re going to be travelling outside Canada frequently or buying things online in non-Canadian dollars, then it’s worth seeking out a card with better rates.

Our pick of the best credit cards for newcomers to Canada that charge zero percent foreign transaction fees are:

• Scotiabank Gold American Express® Card. Our full review of this card is below.
• Scotiabank Passport ™ Visa Infinite Card.
• Home Trust Preferred Visa. This one is a good option if you just want a card for travel in that it has no annual fee so you can keep it just for that.

If you are going to be spending in non-Canadian dollars another great option is to get a Wise multi-currency account. Wise is an online specialist currency service that allows you to spend in foreign currencies without hidden fees.

The account if free and basically you sign up for a Wise account, they send you a Visa card, you load a Canadian dollar amount onto your Wise card online, and then you transfer that balance to whatever currency you want to spend in. They’ll charge a small onetime fee for that bulk transfer to a foreign currency. But then you can spend using your Wise card as normal in that foreign currency without any fees – you’ll get the real exchange rate.

Wise isn’t a credit card and they won’t do a credit check on you. So it’s a good option if you’re struggling to get a credit card.

We have a Wise account and we use it a lot.

You can check the detail here. *

Best credit cards for newcomers to Canada

Every newcomer and new immigrant to Canada will be in different position as relates to credit score so the options open to you will vary. So the best credit cards for newcomers to Canada will vary from person to person.

Therefore the range of credit cards we recommend are best considered in three categories:

1. Best first credit card Canada

These are the credit cards that you can get as part of a newcomer banking package. So these are your options if you’re brand new to Canada, have no credit history and are joining one of the bank’s newcomer programs.

The best first time credit card might very well be the deciding factor in which newcomer banking package you go with overall.

2. Some credit history required credit cards

These are credit cards that are suited to immigrants who aren’t brand new to Canada and already have a credit report.

If you are employed, even if you’ve only been in Canada a couple of months, your credit score could be good enough to have access to more of the Canadian credit card market.

So it’s a good idea to get a credit card with better features than what you were limited to when you first arrived.

It’s unlikely that your credit score will be in the “excellent” range within your first few months in Canada but it should be good enough to apply for some of the credit cards that offer good rewards.

You can easily find out what your credit score is for free. Check out the section above to see how to do it.

Armed with the knowledge of what your credit score is, you can make a determination of what cards you might be able to get.

3. Secured credit cards

These credit cards don’t require any credit rating at all.

They are secured credit cards where you have to put down a security deposit which basically becomes your credit limit on the credit card.

This might be a good option for you if you’re brand new to Canada and either don’t want to join a newcomer banking package, or already have joined one but want a second credit card right away to build your credit score more quickly, for example.

It’s also a good (or only) option if, for whatever reason, your credit report has been trashed and you need to build your credit rating back up.

You can read more about why you might want a secured credit card above.

Best credit cards for newcomers to Canada ranking criteria

Before we get onto our pick of the best credit cards for newcomers to Canada, it’s important to highlight the criteria we are using to selected the best. We’ve considered:

• The cashback or reward points schemes.
• The benefits provided by the credit card, like insurance.
• The fees charged for the card.

Our criteria does not include the interest rate charged by the card. So our pick of the best cards is based upon you paying off your credit card bill in full every month. If you won’t be paying your bill in full every month then the recommendations would be different – obviously the primary driver then becomes a low interest rate.

So with that said, here is our pick of the best credit cards for new immigrants to Canada. You can use the table for quick comparison then get more details on each in the sections below.

Tangerine World Mastercard

Category: 2. Some credit history

With the current special offer, we think this is the the best credit card for newcomers to Canada.

The card offers 10% cashback on purchases in the first two months which is the joint highest cashback rate of all the cards here (and the highest of the no-fee cards). That rate is capped at spending up to $1,000 however – so a maximum of $100 cashback from the promotional rate. To get the promotional rate you need to apply for the card by October 31, 2024.

After the promotional rate of 10% has been used up or comes to an end, you get 2% cashback on two spend categories. The spend categories are things like groceries, restaurants, gas, recurring bill payments – the usual ones.

It’s particularly good to be able to pick the two categories you want rather than have them set for you as most cards do. This gives you the best chance to maximise your cashback (depending on your spending habits).

You get 0.5% cashback on all other spending.

There are a couple of very useful benefits included with the card which is seriously good given the card is no-fee.

You get rental car collision/loss damage insurance and mobile device insurance when you pay the total cost for either on your card.

There are some income requirements that you need to meet with this card. So if you don’t meet them then the Tangerine Money-Back Credit Card is a good option – it offers the same cashback special offer and rates as the World Mastercard but doesn’t have the same benefits.

You can get more details and apply online here.

Fee
No-fee.

Cashback
10% on purchases within first two months up to a maximum of $1,000 [promotional offer for applications by October 31, 2024].
2% on purchases in two spend categories of your choice.
0.5% on other purchases.

Benefits
New Mobile Device Insurance.
Rental Car Collision/Loss Damage Insurance.
Mastercard Travel Pass by DragonPass – gives you dining, retail and spa offers in over 650 airports. And airport lounge access for $32 per visit at over 1,300 lounges.

Eligibility
You must have a minimum annual income of $50,000 or a minimum household income of $80,000, or $250,000 in Tangerine Savings Account(s) and/or Investment Fund Account(s).

Tangerine Money-Back Credit Card

Category: 2. Some credit history

Another sound offering from Tangerine and likely the next best credit card for new immigrants to Canada if you don’t meet the income requirements of the World Mastercard.

It’s got the same cashback offer and rates – so that’s 10% cashback on purchases made within the first two months up to $1,000. To get this promotional rate you need to apply for the card by October 31, 2024.

Once the promotional rate ends it’s 2% cashback on two spend categories and 0.5% on everything else. Again, you get to pick the spend categories you want.

There aren’t any significant benefits with this card but it is no-fee. And the income requirement is $12,000, making it more accessible than the World Mastercard.

You can get more details and apply online here.

Fee
No-fee.

Cashback
10% on purchases within first two months up to a maximum of $1,000 [promotional offer for applications by October 31, 2024].
2% on purchases in two spend categories of your choice.
0.5% on other purchases.

Eligibility
Minimum income of $12,000

Scotia Momentum® Visa Infinite Card

Category: 2. Some credit history

This is a really compelling card if you have some credit history.

It’s got a good cashback offer for the first three months. And even once the special offer period is up, the cashback rate is still one of the best out there.

It’s also got broad insurance coverage included with the card. In particular, we like the new mobile device insurance – you don’t see that with many credit cards.

The annual fee is not insignificant but it’s waived for the first year.

There is minimum income requirements that you have to meet however. So if you’re struggling to meet the income requirements or credit score then the Scotia Momentum® Visa Card is a good option.

Fee
$120. Free for first year. Waived each year if you have a the Ultimate Package bank account.

Cashback
10% on all purchases for the first 3 months (up to $2,000 in total purchases)
4% groceries, recurring bill payments or subscriptions
2% gas stations and daily transit, including Uber
1% other everyday purchases

Benefits
New Mobile Device Insurance
Trip Cancellation and Trip Interruption Insurance
Travel Emergency Medical Insurance
Flight Delay Insurance
Delayed and Lost Baggage Insurance
Travel Accident Insurance
Rental Car Collision/Loss Damage Insurance
Purchase Security & Extended Warranty Protection

Eligibility
You must have a minimum annual income of $60,000 or a minimum household income of $100,000, or a minimum assets under management of $250,000.

Scotia Momentum® Visa Card

Category: 1. First credit card Canada & 2. Some credit history

If you don’t meet the income requirements or have a good enough credit score for the Infinite card above, then this could be an option.

The cashback rate of 2% applies to a number of broad categories and you get 1% on everything else.

Unlike the Infinite card however, this one doesn’t come with travel insurance and such.

It does have a small annual fee but at only $39 you’ll soon make that back with the cashback.

If you really don’t like paying an annual fee then the Scotia Momentum® No-Fee Visa Card is worth considering. Currently it’s got a promotion of 5% cashback for the first 3 months up to $2,000 spend.

Fee
$39.

Cashback
2% groceries, gas stations, drug stores, recurring bill payments or subscriptions
1% other everyday purchases

Benefits
Purchase Security & Extended Warranty Protection

Scotiabank Gold American Express® Card

Category: 1. First credit card Canada & 2. Some credit history

This card offers good rewards in the form of Scene+ points.

Scene+ can be redeemed against various categories like travel, dining out and going to the cinema (Cineplex).

The thing that might makes this card particularly attractive is the no foreign transaction fee. Instead of the standard for Canadian credit cards of around 2.5 – 3% per transaction.

So if you travel a lot or make online purchases in non-Canadian dollars then this might be a good choice for you.

The card comes with a broad range of insurance included.

There is an annual fee for the card but it’s worth it for the insurance, the reward points and foreign transaction savings.

Also the fee is waived every year if you have the Ultimate Package chequing account with Scotia. It’s waived only for the first year if you have the Preferred Package.

Fee
$120. Waived each year if you have a the Ultimate Package bank account. Waived for first year if you have the Preferred Package bank account.

Rewards
5 Scene+ points per $1 spent on grocery stores, restaurants, fast food, and drinking establishments. Including Skip the Dishes.
5 Scene+ points per $1 spent on entertainment purchases. Includes Cineplex movies, theatre, and ticket agencies.
3 Scene+ points per $1 spent on eligible gas and daily transit. Includes rideshare, buses, taxis, subway, and more. Including Uber.
3 Scene+ points per $1 spent on select streaming services
1 Scene+ points per $1 spent on everything else.

Benefits
No foreign transaction fees
Mobile device insurance
Travel Emergency Medical
Trip Cancellation/Trip Interruption
Flight Delay Insurance
Delayed and Lost Baggage Insurance
Travel Accident Insurance
Hotel/Motel Burglary Insurance
Rental Car Collision Loss/Damage Insurance
Purchase Security & Extended Warranty Protection

Simplii Financial Cash Back Visa Card

Category: 1. First credit card Canada & 2. Some credit history

This card offers good cashback rates. It’s particularly good if you spend a lot of money in restaurants, bars and coffee shops – 4% up to  $5,000 a year. And between 1.5% and 0.5% on other categories.

Simplii is an online only bank so the application process and everything is done online.

It’s a no-fee card with a manageable $15,000 minimum annual household income.

Fee
No fee

Cashback
10% cash back for first 4 months on eligible restaurant, bar and coffee shop purchases.
4% cash back after that on eligible restaurant, bar and coffee shop purchases. Up to $5,000 spend per year for this and the 10% offer.
1.5% cash back on eligible gas, groceries, drugstore purchases and pre-authorized payments, up to $15,000 per year – after that 0.5% unlimited.
0.5% cash back on all other credit card purchases with no limit on how much you earn.

Eligibility
Minimum household income of $15,000

CIBC Dividend Platinum® Visa Card

Category: 1. First credit card Canada & 2. Some credit history

This card is a good option if you’ve got the CIBC Smart Plus Account as the usual $99 annual fee for the card is waived.

The card has pretty solid cashback rates split between different categories.

If you don’t have the CIBC Smart Plus Account then whether this card is worth the $99 annual fee would depend on your spending habits as there are no-fee cards with almost-as-good cashback rates as below.

Fee
$99 rebated in the first year. Rebated every year if you have a CIBC Smart Plus Account.

Cashback
10% for the first 4 statements on purchases up to $3,000
3% on gas and groceries
2% on transport, dining and recurring payments
1% on everything else

Eligibility
Minimum household income of $15,000

RBC Cash Back Mastercard

Category: 1. First credit card Canada

This is a nice and simple no-fee credit card.

It’s got a straightforward decent cashback structure.

If you open a newcomer chequing account with RBC you’ll also get an additional 10% cashback for the first three months on spend of up to $2000.

And that’s all there is to say about this one – a good simple choice!

Fee
No-fee

Cashback
2% on grocery store
1% on everything else
extra 10% cashback for 3 months if you have a newcomer chequing account. Up to $2000 spend.

BMO Cashback Mastercard

Category: 1. First credit card Canada

Another potential no-fee cashback card.

It has a 5% cashback for the first 3 months offer. But only up to a maximum of $125 cashback.

Fee
No-fee

Cashback
5% in first 3 months up to a maximum of $125 cash back
3% on groceries
1% on recurring bill payments
0.5% on everything else

Best secured credit cards

All the secured credit cards recommend here do not do a hard credit check.

And they all give you a credit limit equal to the security deposit you put down.

Neo Secured Card

This is a pretty compelling card that provides good cashback with a monthly fee of $5.

You get 4% cashback on gas and groceries and 1% on everything else – up to a maximum cashback of $680 per year.

Any cashback at all for secured credit cards is rare so given the good cashback and the low monthly fee, this really is a good option for a secured credit card.

The minimum security deposit is only $50 so you don’t need to put down a lot of money to open your account.           

Neo guarantees approval for the card if you’re a Canadian resident, the age of majority in your province or territory and provide the required security deposit.

You can get more details and apply online here.

Fee
$5 monthly fee

Cashback
4% on gas and groceries.
1% on everything else.

Get more details or apply online here. *

Home Trust Secured Visa

Another option for a secured credit card is the Home Trust Secured Visa.

However the card isn’t available to residents of Quebec.

It is a no-fee card which is good but it doesn’t have any cashback.

To qualify for the card you have to be a non-Quebec Canadian resident, have a source of income, be the age of majority in your province or territory and not be in bankruptcy.

Fee
No-fee

Cashback
None

Top 10 tips: getting the best credit card

1. Don’t rule out credit cards that charge a fee

At first impression it may seem foolish to pay for a credit card when there are so many you can get that have no monthly or annual fees.

But if you dig into what is included for the fee, it’s often a compelling offer, with the value of the benefits exceeding what you pay in fees.

For example the card may include travel insurance or rental car insurance that you would otherwise have to pay for separately.

Just watch here that to be covered by credit card insurance policies, the flight, hotel, rental car, whatever, has to have been purchased on the credit card that offers the insurance.

The other way that the credit card fee might be worth it is if you’re getting a significantly better cashback/reward points rate than you would for a free credit card. In this instance the fee could pay for itself in extra cashback/points.

So do the math and figure out if the fee card is worth it for you!

Do take note of tip 8 however.

2. Welcome bonuses are your friend

Many credit cards offer welcome bonuses like a higher rate of cashback for the first three months or a bonus number of reward points when you’re accepted for the card.

If you’re smart then these welcome bonuses can be used to good benefit. If you’ve got a big purchase coming up then have a look for a card that has an introductory cashback rate – that kind of thing.

3. Watch the maximum cashback amount

Some cards will try and draw you in with seemingly amazing cashback rates. But make sure you understand what the maximum amount you can earn at that rate is.

This will be worded either as a maximum dollar amount back or maximum spend at that rate.

It may well end up that a card that offers 1% unlimited cashback earns you more cashback over the course of a year than one that provides 5% up to $2,000 spend then 0.5%.

So figure out how you’re going to use the card and then see which will actually give you the most back.

4. Take the maximum credit limit

You should take the maximum credit limit you’re offered on the credit card. Even (especially) if you’re not intending on using the maximum.

The card company might also offer you a lower credit limit at first at then send you an offer to increase it after a number of months. Again, take the increased credit limit.

This is because a factor of your credit score is how much of your available credit you use. If you’re always at or near your credit limit it’s not as good for your score as if you’re only using around a third.

5. All credit cards provide zero liability

All the major credit cards, like Visa, Mastercard or American Express, provide a guarantee that you won’t be liable for unauthorized transactions on your card. So any financial institution that issues a Visa, Mastercard or American Express has that guarantee.

So don’t be overly drawn in by marketing that tries to differentiate itself by talking about worry free online shopping or whatever – they all have the same guarantee which is required by the card network (Visa, Mastercard, AMEX).  

6. Know the value of reward points

Make sure you understand the actual value of reward points that a credit card may be offering and how that compares against other cards.

Clearly one point on one reward program will not always equal one reward point on another.

Understand how reward points convert to various uses and figure out on what your points will go furthest. Whether that is air-miles, statement credits, cinema tickets or whatever.

You might only get $200 worth of statement credits but the same amount of points might buy a flight with a value normally $300.

7. Have a zero percent foreign transaction fee card

If you’re going to be travelling outside Canada or spending online in non-Canadian dollars then it makes financial sense to get a card that doesn’t charge foreign transaction fees.

Most Canadian credit cards will change somewhere between 2.5% and 3% for any transaction not in Canadian dollars. That means that the bank will charge you an extra 2.5 – 3% on top of the amount your putting on your credit card.

But there are a few cards out there that don’t do this so it is sensible to have one card that you can use for foreign spend.

You can see our pick of the best zero percent foreign transaction fee credit cards here.

Another great, non-credit card, option for foreign spending is to get a Wise multi-currency account *. Wise is an online specialist currency service that allows you to spend in foreign currencies without hidden fees. You can get more detail about Wise above.

8. Don’t overlap on credit card insurance

While it’s sensible to have one premium credit card (as per tip 1), it might not be so sensible to have multiple. Many of the premium cards include very similar insurance coverage so the fee for a second card might not be worth it.

It may well be that one card offers a type of insurance that the other doesn’t, and that combined with a good cashback rate it’s still worth having two or more fee cards. But just make sure you’ve done the math!

9. Have more than one credit card and use the right one

It’s a good idea to have a couple of credit cards. Just as long as you’re not paying fees for them all.

Firstly, it means that you can spend on the card that is going to give you the best benefit for that transaction.

If it’s a flight you’ll want to put it on the card that includes travel insurance.

If it’s in non-Canadian dollars you’ll want to put it on your zero percent foreign fee card.

If it’s gas then you’ll want to put it on the card that you get a fuel discount with or that offers the best cashback rate for fuel.

As you can see in our overview of the best credit cards for newcomers to Canada above, the cashback rates vary by type of spend, so it makes sense to know when to use what card.

The other reason why it’s a good idea to have more than one card is it generally helps to grow your credit score having more than one source of credit. Just as long as you’re always paying it off each month!

Many cards have no monthly or annual fees so you can have multiple cards without paying fees.

10. A secured credit card might be a good option

If you’re struggling to get approved for a regular credit card then a secured credit card could be a good solution.

Most secured credit cards guarantee approval even if you have no or a poor credit score, so often they’re a great way to start building your credit score. They’re often the best credit card for new immigrants Canada.

You can get more details on secured credit cards here and our pick of the best secured credit cards here.

Transferring your existing American Express

A final point that might be useful to some…

A great option for a credit card for new immigrants to Canada that already have an American Express in their home country is global card transfer.

Global card transfer is basically if you already have an American Express in your home country you can apply for a Canadian American Express card and they’ll use your home country status with them to issue a Canadian American Express card.

That’s what we did when we moved to Canada and it was really straightforward. We got a premium credit card even though we didn’t have a great credit rating yet.

That’s our summary of the Canadian credit card market and our pick of the best credit cards for newcomers to Canada. We hope you’ve found it useful.

Remember you’re a good catch for the bank! The financial services market is crowded with a lot of players going after pretty a fixed size pool of customers. So new immigrants to Canada represent a great opportunity for finance companies – you’re fresh meat!

Banks expect to make a lot of money from newcomers as they get settled in Canada. So you should expect a compelling reason to let them make money from you! They’re not doing you a favour by giving you a credit card!

Please do drop us a comment below with anything you think we’ve missed or any questions; we’d love to hear from you.

* All of the products and services I recommend on Canada for Newbies are independently selected based upon what I’ve personally found to be useful. When you sign up to something I recommend in this article I might earn a small affiliate commission. Rest assured it won’t cost you anything and I would never recommend something I don’t believe in or use myself.