Getting a credit card is, in some ways, a rite of passage. For young people, deciding what credit card best suits their needs can be a daunting task, as there are so many options to choose.
We’ve done our research and compiled a list of the best credit cards for youths in Canada. This article includes other relevant information you’ll need to make your decision.
So let’s get started;
1. American Express Cobalt Credit Card
Named one of the best credit cards for 2020 by Forbes magazine, this is our first pick for youths’ best credit cards, with impressive cashback returns for big spenders. If you dine out frequently or spend a lot on taxis or other forms of transportation, this card offers you significant rewards. Here’s what a cobalt card entails;
- Earn bonus points via your purchases. Up to 2,500 Membership Rewards points for each monthly billing period in which you spend $500 in purchases on your card. This could total 30,000 points in a year.
- Plus, you can earn 10x the points at Amazon.ca (up to $500) if you apply by January 13, 2021.
Young American Express cardholders can redeem these points for merchandise or travel, concerts, movie tickets, or just having drinks with friends.
- It requires no enrolment, and cashback is automatic
- High cashback in some categories
- No income requirement
- Good credit score required
This card is ideal for users who live in the cities and eat out often or order in.
2. CIBC Dividend Visa Infinite Card
The CIBC Dividend Visa Infinite Card rewards regular purchases, granting Canada’s best cashback rates. This card offers 4% cash back on eligible gas and grocery purchases and 1% on everything else. It comes with travel insurance (including medical) and access to luxurious dining, travel and entertainment.
While there’s no limit on the total cashback you can get, note that the 4% rate only applies to gas and grocery purchases up until the first of these annual spending milestones are met:
- $80K in total eligible card purchases (across all categories, for both primary and additional cardholders)
- $20K in grocery and gas purchases (for both primary and supplementary cardholders)
After reaching either of these limits, your purchases in the accelerated categories will earn 1% cashback until the card’s reset period in December annually.
Cardholders do not have the option of redeeming their cash back at any time; instead, accumulated cashback from all cards linked to the account will be added as a credit to the primary card holder’s card balance annually in December.
Other things you should know;
- It has an income eligibility of $60,000 for an individual or $100,000 for a household.
- It requires a good credit score, a first-year annual-fee rebate and a 10.99% introductory interest rate on all purchases until august 2021
This card is ideal for families and long-distance travellers, considering its high cashback rates on gas and groceries. If you spend at least $210 monthly on groceries, you’ll earn enough cash back over a year to make up for the card’s annual fee.
3. Scotia Momentum Visa Infinite Card
For the first three months, this card offers a 10% cashback on eligible purchases (up to $2,000 in total assets), granted you open a new customer Scotia Momentum Visa Infinite credit card account by February 28, 2021.
After the special offer, you keep earning a 4% cashback on everyday purchases such as groceries and recurring bill payments, 2% on gas and transit, and 1% on everything else.
The 4% cashback is applied until your purchases reach $25,000 in that category. The rate is then reduced to 1% for the remainder of the year, returning to 4% when the new year starts. For gas and transit (buses, subways, Ubers), any purchases which do not fall into these categories earn at the 1% rate.
Other things you should know:
- The Scotia Momentum Visa Infinite card has a comprehensive array of insurance or related benefits for travellers and consumers, including emergency travel medical.
- Your credit score needs to be “good to excellent” to get this card
- There’s also an income eligibility criterion; minimum annual income of $60,000 or a minimum household income of $100,000 or minimum assets under management of $250,000
- The yearly fee of $120 is waived off for the first year
This card is ideal for people who utilize public transportation frequently, spend a lot on groceries and recurring bills and people who intend to purchase an expensive mobile device soon.
4. TD Aeroplan Visa Infinite Card
This card offers perhaps the most efficient way to rack up Aeroplan points on your everyday spending, which can be redeemed for flights to almost anywhere in the world.
There’s currently a sign-on bonus,
“Earn 10,000 Aeroplan points and a Bonus Buddy Pass. Plus, the first year no Annual Fee for the Primary and first Additional Cardholder. Conditions Apply. Must apply by January 17, 2021”.
A buddy pass means you can bring along a person on a trip at no extra cost.
Purchases made at Aeroplan partners earn double the rewards when you pay with your Aeroplan credit card and present your Aeroplan membership card. This makes it easier and faster to accumulate Points. Other things you should know include;
- Income requirement: $60,000 annual personal income or $100,000 annual household income.
- Other benefits include travel insurance, priority boarding/check-in and free first checked bag on Air Canada flights, Auto Rental Collision/Loss Damage Insurance, etc.
- The Aeroplan points you earn on the TD Aeroplan Visa Infinite Card can only be redeemed for Air Canada flights.
This card is ideal for frequent travellers who can take advantage of the high earning categories. Its sign-up bonus immediately gives you value for your money, and it’s earning rate makes it a valuable asset long after the bonus is expired.
5. Tangerine World Mastercard
This card has no annual fee, $0! And you can earn up to 2% unlimited cashback across three categories of your choice, including groceries, restaurants, gas, parking and public transportation. Select two of Tangerine’s money-back types to earn 2% cashback, deposit your Rewards into a Tangerine Savings Account and get a third 2% Money-Back Category.
After choosing, you’ll earn 2% cashback on everything charged to your card that falls into these categories.
All purchases made outside of your chosen categories will earn 0.5% cashback. If that’s not enough, this card also features “Boingo WI-FI for MasterCard,” which gives you access to over a million WI-FI zones across the world. It also offers mobile device insurance when you charge your mobile phone or tablet’s full amount to your card.
Other things you should know;
- Cashback rewards are paid monthly and automatically deposited into the account of your choice or applied as a statement credit towards your credit card balance.
- Complimentary benefits include; rental car loss/damage insurance, shopping protection, and enjoy Mastercard Airport Experiences provided by LoungeKey for exclusive deals and offers at over 400 airports.
- Income requirement; $60,000 annually for individuals or $100,000 annually for households, or have a total balance of $250,000 or more in Tangerine Savings Accounts or Investment Fund Accounts.
- It requires a good credit score.
This is ideal if you’re searching for an efficient cashback card with rewards you can enjoy and exclusive experiences both at home and abroad.
|CARDS||Annual fee||Stand-out Features|
|American Express CobaltTM Credit Card||$10 per month($120 per year)||Earn up to 30,000 Membership Rewards® points in the first year|
|CIBC Dividend® Visa Infinite* Card||$99 (first-year annual fee rebate)||10.99% introductory interest rate on all purchases until August 2021†|
|Scotia Momentum® Visa Infinite* Card||$120 (first year free)||10% cashback for the first 3 months (up to $2,000 in purchases)|
|TD® Aeroplan® Visa Infinite* Card||$139 (Rebated first year)||A welcome bonus of 10,000 Aeroplan points after your first purchase.|
|Tangerine World Mastercard®||$0||2% cashback in up to 3 categories|
A summary of the best credit cards for youths in Canada.
Disclaimer: Rates and product offerings are always changing, so this article might not reflect the current market situation. Please contact your financial advisor before making any financial decisions.
Youth Credit Cards FAQs
What’s the difference between a credit card and a prepaid card?
A credit card allows you to borrow money, which you repay later, often with interest on top. In comparison, a prepaid card requires you to load up the card with cash in advance, and you can then only spend what’s on it.
How do these cards compare?
If you’re still unsure what card is best for you, then visit any of the websites; most credit card company websites offer comparison services between their cards to make your decision.
How much can I borrow?
The amount you can borrow with a credit card will depend on your credit limit, but this is often a few hundred or a few thousand pounds. Your card provider will decide this based on factors such as your credit score.