The 3 Best Credit Cards for Bad Credit in Canada

The wild world of credit scores is wacky and nonsensical, where credit-challenged people have a hell of a time getting off the struggle bus. In order to build a credit history you need to use credit. But in order to use credit, you need to have a good credit history. People with bad credit,? or worse – no credit at all -need a hero. Luckily, there are plenty of credit cards for bad credit in Canada.

1. Neo Secured Mastercard: Best Secured Card For Cash Back

The Neo Secured Mastercard is hands down the best secured credit card on the market. Not only does it come with the lowest minimum security deposit requirement of just $50, but it earns incredible cash back rewards. Neo customers earn an average of 5% cash back at participating restaurants and retailers and you can earn up to 15% cash back for each first purchase you make at a Neo partner merchant.?

There is no credit check required and approval is guaranteed regardless of your credit score, as long as you are the age of majority in your province or territory of residence. Your credit limit is equal to your security deposit, which means if you want a higher limit you’ll need to submit more than the minimum $50.??

2. KOHO Prepaid Mastercard: Best Prepaid Card for Credit Building

Top spot goes to the KOHO Prepaid Mastercard because this one actually can help improve your credit – indirectly. KOHO is a fintech company that offers essential financial services like a hybrid spending and savings account with free unlimited transactions. A prepaid Mastercard comes free when you sign up, and you can choose from several different colours to fit your personal style.?

The KOHO app helps you track spending, stay on budget, and set savings goals. Every dollar you deposit can earn up to 4.5% interest (depending on your plan), and eligible purchases with your KOHO Prepaid Mastercard can earn up to 2% cash back, with bonus cash back offers from KOHO partner merchants.?

Now for the good part. With a KOHO Easy plan, you have access to the Credit Building program for just $10 a month. The same program costs $7 on the Essential and Extra plans or $5 on the Everything plan. When you subscribe, KOHO will open a tradeline on your credit file and report the monthly subscription payment to Equifax each month for 6 months. You also have the option to pay for the full 6 months upfront in a single payment.?

3. EQ Bank Card: Best Prepaid Card for ATM Withdrawals

EQ Bank is one of the best digital banks in Canada and they recently launched the EQ Bank Card, which just made them even better. This online-only bank offers a full range of financial products and services on par with traditional banks. The EQ Savings Plus Account is free, offers free everyday transactions, and earns 2.5% interest.?

New and existing customers can now order a prepaid Mastercard that earns 0.5% cash back on every purchase and offers free withdrawals from any Canadian ATM. EQ will even reimburse you any network fees they charge.?

The EQ Bank Card is not directly linked to your Savings Plus Account, which makes it easier to stay on budget and not overspend from your main account. To use it, you need to load it by transferring money to the card account. This is a great feature if you struggle with discipline and don’t want easy access to your entire bank balance.?

This article is the shortened version of an article originally published on Hardbacon.ca by Heidi Unrau under the title "The Best Credit Cards for Bad Credit in Canada".