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Best Credit Cards for New Immigrants

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Last updated on August 4, 2019 Views: 547 Comments: 6
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For new immigrants to Canada, it’s important to start building healthy credit as soon as possible. Credit is how banks measure your ability to spend and save responsibly. If you can build up a good credit score, banks will be more likely to loan you their money for significant financial investments later on, like buying a house.

One of the easiest ways to gradually improve your credit score is to obtain a credit card and pay off its balance each month. Credit cards can also help you make purchases online or over the phone, access money in case of an emergency, and earn cash back and rewards. Though most Canadians without any credit history might struggle to obtain a credit card, Canada makes life easier for new immigrants by providing them with special opportunities to easily obtain credit cards. It’s important to give new arrivals a helping hand, because it benefits the Canadian economy and promotes equality among all Canadian citizens.

How Can Immigrants Get a Credit Card with No Canadian Credit History?

It’s important to keep in mind that banks offer two main types of credit cards: secured cards, which require an initial deposit to cover any unpaid balance, and unsecured cards, which can be obtained without any deposit requirements. Canada’s top banks offer special programs specifically designed for the needs of immigrants, including providing them with access to unsecured credit cards. Access to unsecured credit cards is a privilege that other Canadians without credit history typically do not have.

If a new immigrant is only interested in obtaining a credit card and does not wish to join a bank’s complete banking program for new immigrants, they can obtain a secured card instead.

Unsecured Credit Cards Via Special Bank Programs for New Immigrants

Becoming familiar with the Canadian banking system, choosing the right credit products, and setting up a solid financial plan can be intimidating tasks for a new immigrant. Thankfully, Canada’s top banks offer special bank programs specifically designed for the needs of immigrants, including providing them with unsecured credit cards.

Scotiabank

Scotiabank credit card offers for new immigrants include introductory cash back and rewards cards.

scotia momentum no feeThe Scotia Momentum No-Fee VisaAs its name would suggest, the Momentum No-Fee Visa is inexpensive because it does not come with an annual fee. It’s unsecured, meaning you won’t need to give the bank a cash deposit in exchange for a credit limit. The card’s advantages include:

  • 7.99% monthly interest on purchases for the first six months after approval (only for new accounts opened by June 30th, 2018)
  • 1.00% cash back on purchases at gas stations, drug stores, and grocery stores
  • 0.50% cash back on all other purchases

The Scotiabank American ExpressThe Scotiabank American Express Card: This unsecured card is a good introduction to Scotia Rewards, which are points you earn that can be spent on a variety of travel benefits, merchandise and gift cards. When you are approved for the Scotiabank American Express Card, you gain the following benefits:

  • Earn 1 Scotia Reward Point for each $1 spent on everyday purchases
  • Collect a 5,000 Reward Point bonus after spending $500 within the first three months of approval

Scotiabank SCENE VisaThe Scotiabank SCENE Visa: SCENE points are specialty rewards system, and are best for cardholders who enjoy entertainment. When approved, you gain the following benefits:

  • Redeem your points for movies, music, and other events
  • Obtain 1 SCENE point for every dollar spent on regular purchases
  • Get 5 SCENE points for every dollar spent at Cineplex Entertainment Theatres or for online tickets
  • Receive 2,000 bonus SCENE points when you spend $500 within 3 months of account approval (offer valid only for new accounts opened by June 30th, 2018)

New immigrants interested in these cards should contact Scotiabank about joining their StartRight program. To be accepted for the StartRight program, applicants must have been in Canada 3 years or less.

BMO

bmo cash back mastercardThe BMO Cash Back Mastercard: The card offers new members the following benefits:

  • Receive 5% cash back for the first 3 months of your membership
  • Collect 1% cash back after introductory rate expires
  • Gain an impressive 25.00% discount when renting a car from National Car Rental or Alamo
  • Take advantage of purchase protection and extended manufacturer warranties for applicable purchases

New immigrants interested in the BMO Cash Back Mastercard should contact BMO about its Newcomers to Canada program, which is designed for foreign workers, new immigrants and international students residing in Canada. People who plan on moving to Canada soon can also create bank accounts and execute wire transfers in advance of their arrival.

RBC

RBC offers new immigrants both a cash back and rewards card.

rbc_cash_back_no_annual_feeThe RBC Cash Back Mastercard: This simple credit card allows you to earn cash back at a competitive rate, without paying an annual fee. Other benefits include:

  • Collect 2.00% cash back for every $1 spent on grocery store and gas station purchases
  • Receive 1.00% on all other purchases

rbc_rewards_plusThe RBC Rewards+ Visa: Also without an annual fee, this card introduces you to the RBC Rewards program, which offers several great advantages for new subscribers:

  • Collect points that you can redeem toward travel, gift cards, merchandise, and more
  • Receive 1 RBC point for every $1 spent on gas, groceries, and gas station purchases
  • Earn 1 RBC point for every $2 spent on other purchases

The above cards are available to Permanent or Temporary Residents, international students, refugees and those who plan on moving to Canada soon via the RBC Newcomer Advantage Plan.

TD

TD offers a variety of unsecured credit cards to new immigrants, but the cards offered are ultimately the bank’s decision on a case-by-case basis for each applicant. Immigrants can find out which cards they can choose from by visiting a TD branch near them and expressing interest in the TD New to Canada Banking Package.

There are general requirements that you must meet before joining the above banking programs for immigrants. For example, you must provide proof that you’re a new immigrant—usually a Permanent or Temporary Resident Card. Also, these programs are for new immigrants only, so you must have recently moved to Canada—though the specific amount of time in the country varies for each program—and be at least 18 years old.

Secured Credit Cards for New Immigrants

If you’re not interested in signing up for a complete immigrant banking program, but still wish to improve your credit score, we recommend getting a secured credit card. A secured credit card is an easy way to get access to credit without a credit history, or with bad credit. Banks simply ask applicants to match their desired credit limit (the maximum amount of money you can spend with the credit card) with a cash deposit beforehand.

Secured cards are great for improving your credit score, because their card issuers frequently report repayment performance to Equifax and TransUnion, the two Canadian credit bureaus that track Canadians’ credit histories. However, secured credit cards do have some drawbacks: they rarely offer the same level of rewards or cash back as unsecured cards, and they don’t have high credit limits unless you have a lot of spare cash to offer as the deposit. Some of the best secured credit cards in Canada are listed below:

Home Trust

Home Trust Secured Visa Low-Rate credit cardThe Home Trust Secured Visa No Annual Fee Card: Of the two Secured cards offered by Home Trust, we recommend the ‘no annual fee’ option, though it has a higher purchase interest rate (19.99%) than its $59 annual fee cousin (with 14.9% interest) A higher interest rate isn’t detrimental as long as applicants are serious about paying off their card balances in full each month. The card’s key features are:

  • $0 annual fee
  • Credit limit matched by cash deposit ranging between $500 and $10,000
  • Cash withdrawals from Visa-friendly ATMs around the world

Refresh Financial

refresh financial visaThe Refresh Financial Secured Visa: A nice middle ground for secured cards given its low annual fee and mid-level interest rate. The card’s key features are:

  • $12.95 annual fee, or $3 monthly fee
  • $200 minimum deposit, maximum deposit of $10,000
  • 17.99% interest rate

Welcome to Canada!

Canada is one of the most friendly and welcoming places in the world, and this characteristic extends to its treatment of new immigrants. Any of the above credit cards and banking programs will help you establish a healthy financial future in this country.

Interested in additional personal finance tips for new immigrants? We’ve set up a page that provides an overview of all the major financial concerns for new immigrants. Check it out and let us know if you have any other questions that we didn’t cover.

Article comments

6 comments
SAJ says:

Hi,
Is it possible to have to Credit Card from a bank (like Scotia or CIBC) without having any Chequing A/C in these banks ?
In my case, I have well managed handsome salary (more than average) account in RBC plus well managed RBC Credit Card from 3-months (Score 730) plus well managed saving account in RBC with very good amount. But still Scotia & CIBC did not approve the Credit Cards, at least online.
Do you think if I open Chequing A/C in these Banks then it might increase the chances of Credit Cards approval ? BTW, I am interested in “Scotia Momentum Visa Infinite card” due to 4% cash back option.
Thanks.

The GreedyRates Team says:

Hey SAJ,

Thanks for the great question. You can absolutely get a credit card without having a chequing account from the same bank, as lenders really only care about your credit score, income, outstanding debt and other financial obligations. A credit score of 730 is good, but as you can see on our review of the Scotia Momentum Visa Infinite card, we recommend an ‘excellent’ score between 740 and 850 to be more certain of approval. Keep in mind that you’re applying for what is one of Scotiabank’s highest-tier cards, so applicants will be scrutinized more thoroughly.

You also didn’t mention if you’re carrying any balances on your RBC card or not, which is a factor that’s very relevant. Either way, you can always call Scotia and inquire why they didn’t approve your application, and in our experience the customer service representatives over there are polite and knowledgeable. If you want, we can also recommend some other alternatives that could work for you. The Tangerine card, for example, earns 2.00% cash back on two purchase categories of your choice, instead of being pigeonholed into just gas or groceries. However, if you’re set on the Infinite card, try to improve your credit score before reapplying. Best of luck!

GreedyRates

MXXX says:

Is the above information verified or just for marketing, coz I am a newcomer and I applied to RBC Cash Back MasterCard and they refuse – Unfortunately, you currently do not meet the requirements for the RBC Cash Back Mastercard at this time.

The GreedyRates Team says:

Hi MXXX,

Thanks for showing your concern and informing us about your need for a card like the RBC Cash Back Mastercard. If you’re a new immigrant then you should be working to build your credit score and establish a healthy credit history in Canada before taking on new debt. The RBC card you applied for in unsecured, meaning the bank will need to trust you with their money (credit limit) before approving your application. You need credit, so begin with a secured card like the Home Trust or Refresh Financial secured cards on this page.

You’ll deposit a few hundred dollars with either bank and then be given a matching credit limit, which you can use responsibly to improve your score over time. Banks report your behavior with the card to your credit bureau, who will start a file on you that banks can reference when determining your worthiness for their financial products. We recommend the Refresh Financial card primarily because you only need to put $200 as a minimum security deposit. Let us know if you need any further assistance!

The GreedyRates Team

Iwan Ng says:

Do i need to open bank accoint with them ? I have only TD bank but really interested with Scotiabank Card.

The GreedyRates Team says:

Greeting Iwan,
Good to have you on GreedyRates! If you’re looking to get a credit card in Canada, then the bank that approved your application and will send you your card will also open a revolving credit account for you. This isn’t exactly the same as a chequing account, which only draws cash from money that you already own. The credit account simply keeps track of how much credit the bank has entrusted to you, how much you’ve used, and how much to repay (as well as how much that will cost based on your timeliness). A credit account normally exists in the periphery of a chequing or savings account, because the bank wants to know that you can repay the money you’ve borrowed from them.

If you don’t have a bank account yet, but want a credit card, then open a chequing or savings account with the bank that issues your preferred card. They’ll be able to reference your finances during the application process, and will likely give you a greater chance of approval accordingly. If your account is with TD, then it won’t hurt you to apply for Scotiabank’s card, and it won’t mean you have two bank accounts. Let us know if we made sense or if you need any extra help, and we’ll be happy to provide.

GreedyRates Staff