A credit card for bad credit is a type of credit card that is specifically designed for people with poor credit scores or limited credit histories. These cards typically have higher interest rates and fees compared to other credit cards, as they are considered to be higher risk by the card issuer. However, they can be a useful tool for rebuilding or establishing credit if used responsibly.

Credit cards for bad credit may also have lower credit limits and may require a security deposit as collateral to protect the card issuer against potential losses. Some may also offer rewards or other benefits, but these are generally not as generous as those offered by cards with better credit requirements.

If you are considering a credit card for bad credit, be sure to read the terms and conditions carefully and choose a card that fits your needs and budget. Make all your payments on time and keep your balances low to help improve your credit score over time.

List of the Best Credit Cards for Bad Credit Canada

Here are some of the best credit cards for bad credit in Canada:

1. Capital One® Guaranteed Mastercard®: This card is designed for people with poor or no credit history, and requires a security deposit that is fully refundable when the account is in good standing. The card has no annual fee, and offers a credit limit increase after six months of responsible use.
2. Home Trust Secured Visa Card: This card requires a security deposit that is fully refundable when the account is closed in good standing. It has a low annual fee, and offers a credit limit up to $10,000. The card also offers purchase protection and extended warranty coverage.
3. Refresh Financial Secured Visa: This card requires a security deposit, and has no income or credit score requirements. It has a low annual fee, and offers a credit limit up to $10,000. The card also offers credit score monitoring and financial education resources.
4. Peoples Trust Secured Mastercard: This card requires a security deposit, and has no income or credit score requirements. It has a low annual fee, and offers a credit limit up to $25,000. The card also offers purchase protection and extended warranty coverage.
5. No-Fee Scotiabank Value® Visa Card: This card is designed for people with limited or no credit history, and has no annual fee. It has a low interest rate, and offers a credit limit up to $1,000. The card also offers optional insurance coverage for travel and rental cars.
6. Affirm Financial Mastercard: This card is designed for people with poor credit, and has no income or credit score requirements. It has a low annual fee, and offers a credit limit up to $3,000. The card also offers optional insurance coverage for travel and rental cars.
7. Canadian Tire Triangle Mastercard: This card is designed for people with fair or limited credit, and has no annual fee. It offers rewards points for purchases made at Canadian Tire, Mark’s, and Sport Chek stores, as well as other retailers. The card also offers optional insurance coverage for travel and rental cars.
8. Guaranteed Trust Approval Visa: This card is designed for people with poor credit, and requires no credit check or income verification. It has a high annual fee and interest rate, but offers a credit limit up to $10,000. The card also offers purchase protection and extended warranty coverage.
9. PC Financial Mastercard: This card is designed for people with limited or no credit history, and has no annual fee. It offers rewards points for purchases made at President’s Choice stores, as well as other retailers. The card also offers purchase protection and extended warranty coverage.
10. BMO Preferred Rate Mastercard: This card is designed for people with fair or limited credit, and has a low annual fee. It offers a low interest rate on purchases and balance transfers, as well as optional insurance coverage for travel and rental cars. The card also offers a credit limit up to $10,000.
11. Capital One® Low Rate Guaranteed Mastercard®: This card is designed for people with fair or limited credit, and requires a security deposit that is fully refundable when the account is in good standing. It has a low interest rate, and offers a credit limit up to $7,000. The card also offers purchase protection and extended warranty coverage.
12. RBC Cash Back Mastercard: This card is designed for people with fair or limited credit, and has no annual fee. It offers cash back rewards on purchases made at eligible grocery stores, gas stations, and drugstores. The card also offers optional insurance coverage for travel and rental cars.
13. CIBC Dividend® Visa* Card: This card is designed for people with fair or limited credit, and has no annual fee. It offers cash back rewards on purchases made at eligible gas stations, grocery stores, and drugstores. The card also offers optional insurance coverage for travel and rental cars.
14. Capital One® Classic Mastercard®: This card is designed for people with fair or limited credit, and has no annual fee. It offers a low interest rate on purchases and balance transfers, as well as a credit limit up to $7,000. The card also offers purchase protection and extended warranty coverage.
15. Capital One® Secured Mastercard®: This card is designed for people with bad or limited credit, and requires a security deposit that is fully refundable when the account is closed in good standing. It has no annual fee and offers a credit limit up to $7,000. The card also offers purchase protection and extended warranty coverage.
16. Home Trust Preferred Visa Card: This card is designed for people with fair or limited credit, and has no annual fee. It offers a low interest rate on purchases and balance transfers, as well as optional insurance coverage for travel and rental cars. The card also offers a credit limit up to $10,000.
17. RBC Rewards+ Visa Card: This card is designed for people with fair or limited credit, and has no annual fee. It offers rewards points for purchases made at eligible gas stations, grocery stores, and drugstores. The card also offers optional insurance coverage for travel and rental cars.
18. BMO CashBack Mastercard: This card is designed for people with fair or limited credit, and has no annual fee. It offers cash back rewards on purchases made at eligible gas stations, grocery stores, and drugstores. The card also offers optional insurance coverage for travel and rental cars.
19. TD Emerald Flex Rate Visa Card: This card is designed for people with fair or limited credit, and has a low annual fee. It offers a low variable interest rate on purchases and balance transfers, as well as optional insurance coverage for travel and rental cars. The card also offers a credit limit up to $50,000.
20. MBNA True Line® Mastercard®: This card is designed for people with fair or limited credit, and has no annual fee. It offers a low interest rate on purchases and balance transfers, as well as optional insurance coverage for travel and rental cars. The card also offers a credit limit up to $10,000.

Here is a table summarizing the 20 credit cards for bad credit in Canada that we have discussed:

Pros of Credit Cards for Bad Credit

Here are a few potential benefits of using credit cards for bad credit:

1. Opportunity to Build or Rebuild Credit: Credit cards for bad credit can be a good tool to help establish a credit history or improve a damaged credit score. By using the card responsibly and making timely payments, you can demonstrate to lenders that you can manage credit effectively.
2. Access to Credit: For people with limited credit history or a low credit score, it may be difficult to obtain credit. Credit cards for bad credit typically have more relaxed eligibility requirements, which may make it easier for some people to get approved for credit.
3. Rewards Programs: Some credit cards for bad credit offer rewards programs that allow you to earn points or cash back on purchases. While the rewards may not be as generous as those offered by premium credit cards, they can still be a nice perk if you use your card regularly.
4. Financial Flexibility: Credit cards for bad credit can provide a financial safety net in case of unexpected expenses. By having access to credit, you can cover unexpected bills or emergencies without having to dip into your savings or borrow from friends and family.

Cons of Credit Cards for Bad Credit

Here are a few potential drawbacks of using credit cards for bad credit:

1. Higher Interest Rates: Credit cards for bad credit often come with higher interest rates than traditional credit cards. This means that if you carry a balance on the card, you’ll end up paying more in interest charges, which can make it harder to pay off your debt and improve your credit score.
2. Fees: Credit cards for bad credit may also come with fees, such as annual fees, application fees, or transaction fees. These fees can add up quickly and increase the cost of using the card.
3. Lower Credit Limits: Credit cards for bad credit may also have lower credit limits than traditional credit cards. This can limit your purchasing power and make it harder to use the card for larger expenses.
4. Risk of Overuse: Because credit cards for bad credit typically have higher interest rates and lower credit limits, there is a risk of overusing the card and accumulating more debt than you can afford to pay off. This can further damage your credit score and financial health.

Credit Cards for Bad Credit Facts

Here are a few facts about credit cards for bad credit:

1. Credit Cards for Bad Credit are Designed for People with Poor or Limited Credit: These cards are designed for people who have a low credit score or limited credit history. They offer a way for these individuals to obtain credit and begin building or rebuilding their credit history.
2. Eligibility Requirements May Be More Lenient: The eligibility requirements for credit cards for bad credit are often more lenient than traditional credit cards. This means that people with poor credit or limited credit history may have a better chance of getting approved for these cards.
3. Higher Interest Rates and Fees: Credit cards for bad credit often come with higher interest rates and fees than traditional credit cards. This is because the credit card issuer is taking on a higher risk by lending to someone with poor credit.
4. Secured Credit Cards are an Option: Secured credit cards require a security deposit to be placed with the card issuer, which acts as collateral for the credit limit. This type of credit card can be a good option for people with bad credit who are having difficulty getting approved for an unsecured credit card.
5. Credit Cards for Bad Credit Can Help Improve Credit Scores: By using a credit card for bad credit responsibly and making timely payments, individuals can begin to build or improve their credit score. This can make it easier to obtain credit in the future and may lead to lower interest rates and better credit card offers.

Credit Cards for Bad Credit FAQs

Here are some frequently asked questions about credit cards for bad credit:

1. What credit score do I need to get a credit card for bad credit?

Credit scores required for credit cards for bad credit vary depending on the issuer and the specific card. Some cards may accept individuals with scores as low as 300, while others may require a score of 550 or higher.

2. Can using a credit card for bad credit help improve my credit score?

Yes, using a credit card for bad credit responsibly can help improve your credit score over time. By making timely payments and keeping your balances low, you can demonstrate to lenders that you are capable of managing credit effectively.

3. What are the fees associated with credit cards for bad credit?

Credit cards for bad credit may come with fees such as annual fees, application fees, or transaction fees. These fees can add up quickly and increase the cost of using the card.

4. Are secured credit cards a good option for people with bad credit?

Secured credit cards can be a good option for people with bad credit who are having difficulty getting approved for an unsecured credit card. Secured credit cards require a security deposit to be placed with the card issuer, which acts as collateral for the credit limit.

5. How can I find the best credit card for bad credit?

To find the best credit card for bad credit, compare the features, fees, and interest rates of multiple cards. Look for cards with lower interest rates and fees, as well as rewards programs or other benefits that may be valuable to you.

6. Can I use a credit card for bad credit to make large purchases?

Credit cards for bad credit may have lower credit limits than traditional credit cards, so it may be difficult to use them for large purchases. Additionally, high interest rates can make it expensive to carry a balance on the card, so it’s important to keep your balances low and pay off your bills in full each month.

7. Can I get a credit card for bad credit with no annual fee?

Yes, there are credit cards for bad credit available with no annual fee. However, these cards may have higher interest rates or other fees, so it’s important to read the terms and conditions carefully.

8. How do I apply for a credit card for bad credit?

You can apply for a credit card for bad credit online or in person. To apply, you will need to provide personal and financial information, such as your name, address, income, and credit history.

9. Can I use a credit card for bad credit to withdraw cash?

Yes, you can use a credit card for bad credit to withdraw cash, but it’s not recommended. Cash advances typically come with higher interest rates and fees than regular purchases, which can make them expensive. Additionally, interest begins to accrue immediately, so there is no grace period as there is with regular purchases.

10. How can I use a credit card for bad credit to improve my credit score?

To improve your credit score with a credit card for bad credit, use the card responsibly by making timely payments and keeping your balances low. It’s also important to avoid applying for too many credit cards or loans at once, as this can negatively impact your credit score.