Credit Building Credit Cards in Canada 2024

Credit building is essential for financial stability and access to credit. One way to build credit is by using credit cards, but for those with no credit history or a bad credit score, getting approved for a traditional credit card can be challenging. This is where credit building credit cards come in. In Canada, there are several credit building credit cards available to help individuals build or rebuild their credit scores. This article will explore what credit building credit cards are, how they work, and the top credit building credit cards available in Canada.

What are Credit Building Credit Cards?

Credit building credit cards are designed for individuals who have little or no credit history, or those who have a bad credit score. These cards have lower credit limits and higher interest rates compared to traditional credit cards. The goal of these cards is to help individuals establish or improve their credit scores by making regular payments and staying within their credit limit. Once the credit score improves, individuals can apply for traditional credit cards with better terms and benefits.

How do Credit Building Credit Cards Work?

Credit building credit cards work similarly to traditional credit cards. Individuals are given a credit limit, which is the maximum amount they can spend on the card. They can use the card to make purchases, and they are required to make regular payments. The payments are reported to the credit bureaus, which helps to establish or improve the credit score.

Top Credit Building Credit Cards in Canada

Capital One Guaranteed Secured Mastercard
The Capital One Guaranteed Secured Mastercard is a popular credit building credit card in Canada. It requires a security deposit, which acts as collateral for the credit limit. The credit limit is typically equal to the amount of the security deposit. This card has an annual fee of $59 and an interest rate of 19.8%.

Refresh Financial Secured Visa
The Refresh Financial Secured Visa is another popular credit building credit card in Canada. It also requires a security deposit, and the credit limit is equal to the deposit. This card has a monthly fee of $6.95 and an interest rate of 17.99%.

Home Trust Secured Visa Card
The Home Trust Secured Visa Card is a good option for those who want to build their credit score without a security deposit. This card has no annual fee and an interest rate of 14.9%. The credit limit is based on the applicant’s income and credit history.

Affirm Financial Mastercard
The Affirm Financial Mastercard is a credit building credit card that requires no security deposit. It has an annual fee of $30 and an interest rate of 29.99%. The credit limit is based on the applicant’s income and credit history.

Neo Secured Mastercard
Get a Neo Secured Credit Card. Guaranteed Approval, Without A Hard Credit Check. Guaranteed Approval. No hard credit check. Get started with $50. Earn Exclusive Offers.

Tips for Using Credit Building Credit Cards

Here are some tips for using credit building credit cards to build or rebuild your credit score:

Use the card regularly but make sure to stay within the credit limit.

Make all payments on time and in full.

Keep your credit utilization low by not using more than 30% of the credit limit.

Monitor your credit score regularly to track your progress.

Apply for a traditional credit card once your credit score improves.

Credit building credit cards are an excellent option for individuals who want to establish or improve their credit scores. They are designed to help those with little or no credit history or bad credit scores. There are several credit building credit cards available in Canada, each with its own benefits and drawbacks. By using these cards responsibly, individuals can improve their credit scores and gain access to better credit opportunities in the future.