Hey there, Hamish here from safexbudget.com, your go-to blog for credit cards and personal finance tips. Today, I’m going to show you how you can save money with credit card 0 interest Canada offers.
You might be wondering: what is a credit card 0 interest Canada offer and why should I care?
Well, it’s a special deal that some credit card issuers make to attract new customers or retain existing ones. It allows you to transfer your balance from another credit card and pay no interest on that balance for a promotional period.
How Credit Card 0 Interest Canada Offers Work
The promotional period varies depending on the card, but it’s usually between 6 and 12 months. During this time, you only have to pay the minimum payment each month, which is usually around 2% or 3% of your balance.
However, once the promotional period ends, the interest rate jumps back to the regular rate, which can be anywhere from 12.99% to 22.99%, depending on the card. This means that any remaining balance will start accruing interest at a high rate.
Therefore, it’s important to pay off as much of your balance as possible before the promotional period ends, or transfer it again to another credit card with zero interest if you can.
Another thing to keep in mind is that most credit card 0 interest Canada offers charge a balance transfer fee, which is usually around 1% or 3% of the amount transferred. This fee is added to your balance and also accrues interest if not paid off in full.
For example, if you transfer $10,000 to a card that charges a 3% balance transfer fee and offers 0% interest for 12 months, you’ll end up with a balance of $10,300. If you don’t pay off this balance by the end of the promotional period, you’ll start paying interest on it at the regular rate.
So, before you apply for a credit card with zero interest, make sure to do the math and see if the balance transfer fee is worth it. You can use this handy calculator to compare different scenarios and see how much you can save with a balance transfer.
Also note that most credit card 0 interest Canada offers only apply the promotional rate to balance transfers, not new purchases or cash advances. This means that if you use your card for anything other than paying off your transferred balance, you’ll be charged interest at the regular rate right away.
So, unless your card also offers a low or zero interest rate on new purchases or cash advances (which is very rare), don’t use it for anything else until you pay off your balance transfer in full.
Best Credit Card 0 Interest Canada Offers
Now that you know how credit card 0 interest Canada offers work and what to watch out for, let’s take a look at some of the best ones available in Canada right now.
As I mentioned earlier, these cards are not very common in Canada, so there are only a few options to choose from. Here are my top picks based on their promotional periods, regular rates, balance transfer fees and other features:
| Card | Promo Period | Regular Rate | Balance Transfer Fee | Annual Fee |
|---|---|---|---|---|
| MBNA True Line Mastercard | 12 months | 12.99% | 3% | $0 |
| CIBC Select Visa Card | 10 months | 13.99% | 1% | $29 |
| Scotiabank Value Visa Card | 6 months | 12.99% | 1% | $29 |
Let’s take a closer look at each of these cards and see what they offer.
MBNA True Line Mastercard
The MBNA True Line Mastercard is my top choice for a credit card with zero interest in Canada, because it offers the longest promotional period of 12 months, and has no annual fee.
This card lets you transfer your balance from another credit card and pay no interest for up to 12 months, as long as you make the transfer within 90 days of opening your account. The balance transfer fee is 3%, which is on the high end, but still reasonable considering the length of the promo period.
After the promotional period ends, the regular interest rate is 12.99%, which is lower than the average for Canadian credit cards. This rate applies to both balance transfers and purchases, so you’ll save money on interest even if you carry a balance from month to month.
However, this card does not offer any rewards or perks, so it’s best suited for people who want to focus on paying off their debt and saving money on interest.
CIBC Select Visa Card
The CIBC Select Visa Card is another good option for a credit card with zero interest in Canada, because it offers a decent promotional period of 10 months, and has a low balance transfer fee of 1%.
This card lets you transfer your balance from another credit card and pay no interest for up to 10 months, as long as you make the transfer within 60 days of opening your account. The balance transfer fee is only 1%, which is one of the lowest in the market.
After the promotional period ends, the regular interest rate is 13.99%, which is slightly higher than the MBNA True Line Mastercard, but still below the average for Canadian credit cards. This rate applies to both balance transfers and purchases, so you’ll also save money on interest in the long run.
However, this card does have an annual fee of $29, which is waived for the first year. It also does not offer any rewards or perks, so it’s best suited for people who want to pay off their debt quickly and don’t mind paying a small fee.
Scotiabank Value Visa Card
The Scotiabank Value Visa Card is another decent option for a credit card with zero interest in Canada, because it offers a low balance transfer fee of 1%, and has some perks that the other cards don’t have.
This card lets you transfer your balance from another credit card and pay no interest for up to 6 months, as long as you make the transfer within 30 days of opening your account. The balance transfer fee is also only 1%, which is one of the lowest in the market.
After the promotional period ends, the regular interest rate is 12.99%, which is lower than the CIBC Select Visa Card, and equal to the MBNA True Line Mastercard. This rate applies to both balance transfers and purchases, so you’ll also save money on interest in the long run.
However, this card does have an annual fee of $29, which is not waived for the first year. It also offers a shorter promotional period than the other cards, so you’ll have less time to pay off your debt without interest.
On the bright side, this card does offer some perks that the other cards don’t have, such as:
- Avis Rent A Car discount of up to 25%
- Save on Car Rentals program with Budget Rent A Car
- Optional Scotia Credit Card Protection Insurance
- Access to My Mobile Wallet and Apple Pay
So, if you’re looking for a credit card with zero interest that also offers some benefits and discounts, this card might be a good fit for you.
How to Use a Credit Card with Zero Interest Wisely
A credit card with zero interest can be a great tool to save money on interest and pay off your debt faster, but only if you use it wisely. Here are some tips on how to make the most of your balance transfer offer and avoid common pitfalls:
- Compare different cards and choose the one that suits your needs best. Consider factors such as promotional period, regular rate, balance transfer fee, annual fee and other features.
- Transfer as much of your high-interest debt as possible to your new card, but don’t exceed your credit limit or you’ll be charged an over-limit fee.
- Pay off as much of your balance as possible before the promotional period ends, or transfer it again to another credit card with zero interest if you can. Aim to pay more than the minimum payment each month, and use this calculator to plan your payments and see how much you can save.
- Don’t use your card for new purchases or cash advances, unless it also offers a low or zero interest rate on them. Otherwise, you’ll be charged interest at the regular rate right away, and you’ll lose your grace period on purchases.
- Don’t miss any payments or pay late, or you’ll lose your promotional rate and be charged interest at the regular rate. You’ll also incur late fees and damage your credit score.
- Don’t close your old credit card accounts after transferring your balance, unless they have high annual fees or other costs. Keeping them open can help your credit utilization ratio and credit history, which are important factors for your credit score.
- Monitor your credit card statements and credit reports regularly, and report any errors or suspicious activity. You can get a free copy of your credit report from Equifax and TransUnion once a year, or use a free service like Borrowell or Credit Karma to check it more often.
Conclusion
A credit card with zero interest can be a lifesaver if you have high-interest debt and want to save money and pay it off faster. However, it’s not a magic bullet that will solve all your financial problems.
You still need to be disciplined and responsible with your spending and payments, and avoid falling into more debt. You also need to be aware of the terms and conditions of your balance transfer offer, and compare different cards to find the best one for you.
If you follow these tips, you can use a credit card with zero interest to your advantage and improve your financial situation.
I hope you found this article helpful and informative. If you have any questions or comments, feel free to leave them below.
- How to Consolidate Credit Card Debt: This is a guide from the Government of Canada that explains how to consolidate credit card debt using different methods, such as a balance transfer, a debt consolidation loan, a line of credit or a home equity loan.
- Credit Card Interest Calculator: This is a tool from Ratehub.ca that allows you to calculate how much interest you’ll pay on your credit card balance, based on your interest rate, balance, payment amount and payment frequency.
- How Balance Transfers Affect Your Credit Score: This is an article from Credit Karma that explains how balance transfers can affect your credit score, both positively and negatively, depending on how you use them.
FAQ – Credit Card 0 Interest Canada Offers
- What is a credit card 0 interest Canada offer?
- A credit card 0 interest Canada offer is a special promotion provided by certain credit card issuers to attract new customers or retain existing ones. It allows you to transfer your balance from another credit card and pay no interest on that balance for a limited time, usually between 6 and 12 months.
- How does the promotional period work?
- During the promotional period, you only need to make the minimum payment each month, typically around 2% or 3% of your balance. No interest will be charged on the transferred amount during this time.
- What happens after the promotional period ends?
- Once the promotional period is over, the interest rate reverts to the regular rate, which can range from 12.99% to 22.99%, depending on the card. Any remaining balance will start accruing interest at this regular rate.
- Are there balance transfer fees?
- Yes, most credit card 0 interest Canada offers charge a balance transfer fee, usually around 1% to 3% of the amount transferred. This fee is added to your balance and also accrues interest if not paid off in full.
- How can I maximize the benefits of a credit card with zero interest?
- To make the most of this offer, try to pay off as much of your balance as possible before the promotional period ends. Alternatively, consider transferring the balance again to another zero-interest card if available.
- Do these cards offer zero interest on new purchases or cash advances?
- Most credit card 0 interest Canada offers apply the promotional rate only to balance transfers. Using the card for new purchases or cash advances typically incurs interest at the regular rate right away.
- Which are some of the best credit card 0 interest Canada offers?
- Based on their promotional periods, regular rates, balance transfer fees, and other features, some top picks are:
- MBNA True Line Mastercard: 12 months promo period, 12.99% regular rate, 3% balance transfer fee, $0 annual fee.
- CIBC Select Visa Card: 10 months promo period, 13.99% regular rate, 1% balance transfer fee, $29 annual fee (waived for the first year).
- Scotiabank Value Visa Card: 6 months promo period, 12.99% regular rate, 1% balance transfer fee, $29 annual fee.
- Based on their promotional periods, regular rates, balance transfer fees, and other features, some top picks are:
- How can I use a credit card with zero interest wisely?
- To use the card wisely, transfer high-interest debt, pay more than the minimum each month, avoid new purchases, don’t miss payments, and keep old credit card accounts open to maintain a healthy credit score.
And if you’re looking for more credit card tips and reviews, check out some of our other articles on safexbudget.com:
- How to Choose the Best Travel Credit Cards
- How to Earn Aeroplan Points with Your Credit Card
- How to Get Instant Approval for a Credit Card in Canada
- How to Avoid Foreign Transaction Fees with Your Credit Card
- How to Deal with Credit Card Overpayment
- How to Save Money with MBNA Credit Cards
- How to Shop Smart with Walmart Credit Cards
- How to Find the Best Credit Card in Canada
- How to Avoid Foreign Transaction Fees with Your Credit Card
Thanks for reading and happy saving!
