The best credit cards for expats in Canada (with crucial credit card factors to note)

So, you’ve moved to Canada. Or you haven’t yet, but you’re in the planning stage. Be that as it may, are you looking for a credit card to help you build your credit score in Canada affordably? Or would you rather get a card with travel rewards that make you want to go on a trip right away?

Just so you know, Canadian banks and credit card providers have plenty of cards to offer. But how do you choose the right one for yourself?

To help you out, we’ve described the best credit cards for expats in Canada, touching on building a credit score and some credit card factors that you should consider.

What’s a good credit score in Canada?

First things first, your credit history is a record showing how able and responsible you are in paying off your loans and debts. Canadian credit bureaus, including TransUnion Canada and Equifax Canada, use credit scores to grade your credit history.

Credit scores generally vary between 300 and 900. The higher your credit score or rating, the greater are your chances of getting approved for a Canadian credit card as an expat.

Again, the higher your credit score, the lower is the risk associated with you.

For example, a score of 800 would mean you’re a low-risk borrower, while a low credit score of about 350 would indicate that you’re a high-risk borrower (implying that you’re at a high risk of skipping your credit card payments, due to your poor credit history signified by your low credit score).

Credit scores sitting anywhere between 750 and 900 are typically considered good in Canada, although this differs from one credit bureau to another.

How can I build my credit history there as an expat?

Start with paying all your utility bills, insurance, and rent or mortgage, on time and in full, each and every month.

If you skip these payments even once, or pay these bills partially, you’ll be contributing towards an unhealthy or bad credit rating.

In case you’ve got one or more other credit cards, pay those bills off, too, just like the utility ones. This helps you build a good credit history, and consequently, a favorable credit score in Canada.

What are the requirements when applying for a credit card in Canada as an expat?

Each bank may list their own eligibility criteria for expats who want to qualify for a credit card in Canada, but you’ll generally need your:

• Valid residential address in Canada

• Permanent residency visa (some banks or credit card providers may allow you to apply even without a permanent residency visa, so long as you’ve got at least 9 to 12 months remaining on your current visa)

• Proof of income and assets

• Proof of employment

• Proof you’ve reached the age of majority in your territory or province in Canada

What credit card factors should I consider?

Consider these factors when applying for one of the best credit cards for expats in Canada:

Types of credit cards

As an expat in Canada, you can get 3 types of credit cards: secured, unsecured, and prepaid credit cards.

With a secured credit card, you can build a positive credit score by paying a minimum security deposit (usually $500 CAD, or approximately $413.02 USD). So, you don’t need a credit history in Canada to apply for a secured credit card.

If you want an unsecured credit card, though, that comes with a lot of flexibility and without any security deposit, you’ll require your Canadian credit history.

As for prepaid credit cards, you won’t be asked for a minimum deposit, a bank account, or your credit history in Canada to apply for one. You simply load any amount of money onto this credit card and start spending. It doesn’t involve any risk, since you can’t miss any payment or overspend.

However, prepaid credit cards won’t help you build a Canadian credit history or a credit rating. Ask yourself what type of credit card you’d like, and then proceed.

Rewards

Does your chosen credit card offer rewards? If so, what kinds of rewards does it have in store for you?

You’ll find a slew of rewards offered with some credit cards, ranging from cash-back and travel rewards to hotel and store points.

With cash-back rewards, you can save on anything you buy with your credit card, especially gas and groceries.

When you spend on hotels, flights, vacation packages, cruises, or other travel-related purchases, you may get entitled to travel rewards like miles or points that you can redeem for saving on future trips.

In this way, consider the kind of rewards you’d like, and choose a credit card accordingly. If you pay off your full card balance every month, then you might find rewards cards to be useful.

Annual fees

Annual fees on Canadian credit cards vary from $0 CAD to $120 CAD ($99.12 USD) or even more, depending on the perks offered to you.

Premium credit cards that come with great rewards and extra benefits typically charge higher annual fees than basic cards. Some Canadian banks may also ask you to maintain a minimum balance in your bank account in Canada to get a no-fee credit card.

So, what’s more important to you: fees or rewards? Are the rewards on your chosen credit card enough to offset the high annual fees? Or are you okay with not being eligible for extra perks, so long as the fees are low?

Interest rates

Most rewards credit cards in Canada carry interest rates ranging from 19.99% p.a. to 22.99% p.a.

If you have a balance on your card, then such rewards cards with high interest rates aren’t the right fit for you. That’s because high interest charges can add up quickly, before you know what’s happening.

On low-interest credit cards, standard interest rates sit anywhere between 8.99% p.a. and 12.99% p.a. These cards give you time to pay off your card balance at lower rates.

Regarding perks or extra benefits, though, low-interest cards don’t have much to offer.

Balance transfer

Check if your chosen credit card in Canada offers balance transfers, and if it does, check the balance transfer rate.

When your debt keeps accumulating on your present credit card, you can transfer that debt to a low-interest card, that’s what balance transfer is about.

Some of these cards may allow little or no interest for a certain period of time (say, 0% interest for the first 6 months), giving you enough time to pay off your card balance at a promotional interest rate.

What are the best credit cards for expats in Canada?

Tangerine Money-Back Credit Card

Tangerine Bank, one of the most popular online banks in Canada, offers this credit card with a unique mix of cashback rewards on daily purchases and zero annual fees.

What makes it the best credit card in the no-fee category is that you can earn up to 2% cashback on any 2 categories of your choice (including groceries, gas, restaurants, and home improvement). On everything else, you’ll get 0.5% cashback.

You can choose to either have your cashback rewards deposited into your Tangerine savings account, or added to your credit card balance. Choosing the first option will let you apply for a third category eligible for 2% cashback rewards.

There’s a 19.95% p.a. interest rate on purchases and cash advances, with a dishonored payment fee of $25 CAD ($20.65 USD).

As for the balance transfer fee, you’ll need to pay at least $5 CAD ($4.13 USD), or 3% of the transferred balance. For the first 6 months, you can also pay a low interest rate of 1.95% on the balance transferred.

This is subject to 2 conditions; you must make balance transfers within 30 days of opening your Tangerine account, and you have to activate your Tangerine Money-Back Credit Card within 45 days of your Tangerine account approval. After the first 6 months, the balance transfer interest rate will jump to 19.95% p.a.

You can also add this credit card to mobile wallets like Samsung Pay, Apple Pay, and Google Pay.

However, to qualify for this card, you must be a permanent resident of Canada who has reached the age of majority.

Plus, you need to meet the gross annual income requirement of at least $12,000 CAD ($9,912.87 USD), and you mustn’t have gone bankrupt over the past 7 years.

Annual fee: None

Interest rate: 1.95% on balance transfer for the first 6 months, and 19.95% thereafter

MBNA True Line Gold Mastercard

If you’ve got a low amount of interest on your radar, the MBNA True Line Gold Mastercard is just the credit card you’re after.

While most other credit cards charge an average interest rate of 19.99%, MBNA’s Mastercard comes with a much lower interest at 8.99%.

Spending with this card won’t earn you any rewards, but you can save loads of money, as MBNA doesn’t charge interest on balance transfers for the first 6 months.

Annual fee: $39 CAD ($32.21 USD)

Interest rate: 8.99% on purchases

CIBC Aeroplan Visa Infinite Card

With this travel rewards credit card from Canadian Imperial Bank of Commerce (CIBC), you can get up to 20,000 Aeroplan points. More clearly, your first purchase will let you earn 10,000 Aeroplan points as a welcome bonus.

After that, spending $1,000 CAD ($826.09 USD) or more on eligible purchases during the first 4 months will make you eligible for 10,000 extra Aeroplan points, as well as for a one-time Air Canada Buddy Pass to bring anyone along with you on a trip.

The Buddy Pass is valid only on a new economy class booking for 12 months from the date it’s issued, but you need to book directly with Air Canada via their official website.

Keep in mind, though, that you can reap the benefits of the Buddy Pass only when you travel entirely within North America that is, the US (including Hawaii), Canada, and Mexico.

Once you book a Buddy Pass, CIBC will deposit the pass into your Aeroplan account within 3 calendar days.

Another way of earning Aeroplan points is to spend on daily credit card purchases. For every $1 CAD spent directly with Air Canada and on groceries and gas, you’ll earn 1.5 Aeroplan points. Every Canadian Dollar you spend on everything else will let you earn an Aeroplan point.

For example, during your first year, if you spend approximately $300 CAD ($247.83 USD) per month with your credit card on groceries and other purchases, you’ll receive 15,100 Aeroplan points, including the 10,000 welcome bonus points. And with 12,000 Aeroplan points out of those 15,100 ones, you can get a round-trip economy class ticket for traveling wholly in North America.

The credit card stands out from other travel rewards cards, as it lets you hold on to your Aeroplan points for as long as you keep holding your CIBC Aeroplan Visa Infinite card as the primary cardholder.

Other offers on this card include round-the-clock concierge services, hotel benefits, and dining events.

This credit card also offers comprehensive insurance coverage for your mobile device, trip cancelation, out-of-province medical needs, flight delays, and hotel burglaries, so you don’t have to worry while traveling.

You can apply for this card only if your minimum annual income is $60,000 CAD ($49,566 USD), or your annual household income is at least $100,000 CAD ($82,610 USD). CIBC also offers a one-time annual fee rebate for the primary cardholder, but only for the first year.

Annual fee: $139 CAD ($114.82 USD)

Interest rate on purchases: 19.99% on purchases and 22.99% on cash advances (21.99% if you reside in Quebec)

Home Trust Secured Visa

For expats who are completely focused on building credit in Canada, the zero-fees Home Trust Secured Visa may be just the thing you need.

It’s a secured credit card, for which you can get approved easily all that’s required is to have a minimum deposit (starting from as low as $500 CAD) and to be residing in Canada (except Quebec).

Basically, the amount of your deposit is your credit limit, ranging between $500 CAD and $10,000 CAD ($8,260.88 USD). This is how the card controls your spending limit, letting you achieve a healthy credit score.

You can improve your credit rating by keeping up-to-date with your payments. If you want to use this credit card without any annual fees, though, the interest rate would grow to 19.99%.

The card offers a lower interest rate of 14.90%, too, but only if you’re okay with an annual fee of $59 CAD ($48.73 USD).

Annual fee: $0 CAD or $59 CAD

Interest rate: 19.99% (with no annual fee) or 14.90% (with $59 CAD annual fee)

When you spend on hotels, flights, vacation packages, cruises, or other travel-related purchases, you may get entitled to travel rewards like miles or points that you can redeem for saving on future trips. Check out Frugal Flyer to learn all about miles, points, and loyalty programs in Canada.

Is there any way to send money abroad from Canada?

Yes, there is. You can send money from Canada to more than 130 countries, using an online international money transfer service called Xe (that’s us). Or you can send money to Canada from the US, the UK, Australia, and New Zealand.

This is how you set up a money transfer between Canada and any other country:

1. Sign up for a new or present Xe account for free.

2. Type the amount you wish to send to or from Canada, as well as the currency you’d like to exchange.

3. Enter your name, your Canadian bank account, and your residential address in Canada. You can save these details for processing future payments quickly.

4. Choose a payment method. You can use your new Canadian credit card to fund your transfer, or you can use a direct debit or bank transfer.

5. Check whether you’ve entered all the info correctly, and confirm the money transfer.

Get Started

Some of the best credit cards for expats in Canada let you make international payments, as well. However, there’s a slight catch - the foreign transaction fees on these cards can add up to a lot, slowly but surely.

With Xe, though, you can make international money transfers at cost-effective rates. Plus, our free currency converter shows you live exchange rates for any currency, anytime and anywhere, so you’ll know what the best time is for making an international payment.

That being said, find out what you want the most from a credit card in Canada, and choose one according to your needs.

All currency conversions mentioned are based on the mid-market rate from Xe as on June 10th, 2021, at 11:45 PM PT.