With the negative connotations given to credit cards and debt in many countries, there’s a good chance you may have actively avoided credit cards back in your home country.
Here in Canada, however, responsibly owing money is a necessity to build what’s called a credit history, which is needed for many other life tasks, such as signing a lease, taking out a mortgage for a house, or applying for a postpaid phone plan.
Credit cards are also your best tool in your Miles & Points journey, which will result in both savings and the ability to travel at a fraction of the cost.
As a newcomer to Canada without a credit history, the best way to get your first credit card is to apply with the same bank that you’ll open a newcomer bank account with. That bank will manually vet you as a client, and this gives you higher chance of being approved for a credit card.
In this guide, we explore how to get your first credit card as a newcomer, as well as discuss our picks for the best newcomer banks you can do business with.
Getting a Credit Card as a Newcomer
In Canada, most credit cards are an unsecured form of credit. This means that banks lend you money based on your risk level (amongst other factors).
As a newcomer, especially one with a temporary worker or student status, banks may understandably be hesitant to lend you any money. This is because the bank doesn’t know you, and as someone who just landed in Canada, you don’t have a credit history, which is quantified by what’s called a credit score.
Thus, it’s important for you to realize from the start that banks wouldn’t just give you a credit card. Instead, there’s a high probability that you’ll get your first credit card from the bank where you open your newcomer bank account.
At your appointment to open a newcomer bank account, the bank advisor will give you the option of also applying for a credit card. When this happens, you’ll definitely want to say yes, regardless of which credit card tier or product is being offered.
Applying for a credit card at this appointment is crucial since the bank advisor is empowered to send your application for “manual underwriting,” which means that it will be assessed manually by a human being rather than by a computer algorithm.
As a newcomer, you’re much likelier to be approved for a credit card when there’s a manual assessment since you’re being vetted as a client of the bank, and the advisor can potentially add notes to your application to improve your chances.
If you’re a student or a worker with no job offer yet, you’ll likely be offered an entry-level credit card, or in some cases, a secured credit card, which must be backed by a cash deposit.
Either way, don’t be discouraged, as you’re still taking your first step on your credit journey. You’ll have room to progress to more premium cards down the line, which afford better perks and benefits.
However, if you already have a job offer, you can bring your employment documents to your initial bank appointment, and based on these, you may be approved for a higher-tier credit card.
Given that your first bank as a newcomer will likely approve your first credit card, it’s crucial that you choose this bank wisely.
When choosing a bank, you should consider its newcomer offers and benefits, as well as its credit card line-up, and naturally, you should pick the bank that aligns with your financial goals and priorities.
To help you in choosing a bank and a first credit card, we’ve rounded up some newcomer-friendly banks and summarized what they have to offer in terms of credit cards.
Choosing a Newcomer Bank for Credit Cards
In choosing a bank to do business with, you should first consider if it’s a good bank for newcomers. After all, you’ll bank with this institution for at least the first year or so.
The best banks for newcomers feature a newcomer program that provides a no-fee bank account or an account fee waiver that makes your bank account free for a period of time. To sweeten the deal, these banks might also offer a welcome bonus or incentive, which could be cash, points, gift cards, or electronics.
Most newcomer bank programs also offer the option to sign up for a credit card, and some banks may even offer to waive the card’s annual fee for the first year.
In Canada, credit cards are a great tool for earning rewards (it’s what this whole website is about!) which can be used to offset various expenses.
With many banks and credit cards to choose from in Canada, banks try to compete and differentiate with their offerings through these reward programs, so the reason for choosing one credit card instead of another often comes down to which type of reward you’d prefer to collect.
Generally, banks and their credit cards offer four types of rewards:
- Cash back
- Fixed-value points
- Loyalty program points
- Transferrable points
Once you’ve got your first Canadian credit card in hand, you can further explore the world of Miles & Points and all that it has to offer.
To learn more about the four types of rewards and the potential of Miles & Points, check out our Miles & Points for Beginners series.
In the sections below, we’ll explore some of the best newcomer banks and their credit cards, with a focus on the rewards that you can earn from each.
Scotiabank
Scotiabank, also known as the Bank of Nova Scotia, is one of Canada’s Big Five banks and has around 900 branches scattered across Canada.
Scotiabank is a good choice if you’re new to Canada since it’s developed a program specifically for newcomers called StartRight. The program offers incentives on bank accounts, investments, money transfers, and credit cards.
With StartRight, you get your monthly fee waived for one year with the Preferred Package chequing account.
With this account, you’ll get unlimited Visa Debit card transactions and Interac e-transfers, a first-year annual fee waiver (up to $150) on select Scotiabank credit cards, and more.
In addition to having your monthly account fees waived, you’ll also receive a bonus of up to $350 (all figures in CAD) in cash upon meeting specific requirements.
In terms of credit cards, Scotiabank’s cards offer rewards mainly through the Scene+ program, which the bank co-owns.
Scene+ not only lets you earn points with Scotiabank products but also with a wide range of partners, such as Sobeys grocery stores, Cineplex theatres, and restaurants under the Recipe Unlimited company (e.g., Harvey’s, Swiss Chalet, and East Side Mario’s).
As a newcomer, you’ll likely be offered the no-fee Scotiabank® Scene+™ Visa* Card, which comes with the following earning rates:
- 2 Scene+ points per dollar spent at Empire grocery stores, such as Sobeys, IGA, Safeway, Foodland, and FreshCo
- 2 Scene+ points per dollar spent at Cineplex and Home Hardware
- 1 Scene+ point per dollar spent on all purchases
The good thing about Scene+ points is that you can redeem them in a multitude of ways. You can also use them to pay at affiliated grocery stores, cinemas, and restaurants. Most valuably, you can use them to offset any travel expense paid for with your credit card.
However, if you’d prefer to earn simple cash back instead of Scene+ points, you can opt for Scotiabank’s line of Momentum products.
As a newcomer, you’ll likely be qualified for the Scotia Momentum® No-Fee Visa* Card, which entitles you to cash back at the following rates:
- 1% cash back on all eligible gas stations, grocery stores, drug stores purchases, and recurring payments
- 0.5% cash back on all other eligible purchases
TD
The Toronto-Dominion Bank (TD), also known as TD Canada Trust, has more than 1,100 branches nationwide.
For newcomers, TD offers services in various languages and resources to help you navigate financial services in Canada.
Additionally, with its New to Canada program, TD offers newcomers one year with no monthly fees on its Unlimited Chequing Account, which features unlimited transactions, a Visa Debit card, and linking to Starbucks Rewards.
As a new client, you’re also eligible to receive up to $350 as a cash bonus when you complete a set of required tasks.
With regards to credit cards, TD offers the option to earn cash back, TD Rewards Points, or Aeroplan points.
TD Bank is one of the three financial institutions issuing Air Canada Aeroplan credit cards. With its suite of Aeroplan credit cards, you can earn Aeroplan points on all your purchases, and these Aeroplan points can, in turn, be used for flights around the world.
As a newcomer, you’ll likely qualify for the TD® Aeroplan® Visa Platinum* Credit Card, which carries an $89 annual fee that can be waived if you also have the Unlimited Chequing Account.
With the TD® Aeroplan® Visa Platinum* Credit Card, you’ll earn Aeroplan points on your purchases as follows:
- 1 Aeroplan point† per dollar spent on eligible Air Canada®, Air Canada Vacations®, gas, and grocery purchases†
- 1 Aeroplan point† for every $1.5 spent on all other eligible purchases†
If you’d prefer to earn more flexible reward points that you can use for any travel purchase, you can look into the range of TD Rewards credit cards.
Within this family of credit cards, as a newcomer, you’ll likely qualify for the TD Rewards Visa* Card, which offers the following earning structure:
- 4 TD Rewards Points† per dollar spent on eligible Expedia® for TD purchases†
- 3 TD Rewards Points† per dollar spent on eligible groceries and dining purchases†
- 2 TD Rewards Points† per dollar spent on eligible recurring bill payments set up on your account†
- 1 TD Rewards Point† per dollar spent on all other eligible purchases†
TD Rewards Points can be redeemed for travel products purchased through Expedia for TD at a rate of 0.5 cent per point, or they can be used to offset any travel purchase made on the card at a rate of 0.4 cent per point.
As a third option, TD also offers a range of cash back credit cards, and as a newcomer, you can ask for the TD Cash Back Visa* Card.
The TD Cash Back Visa Card earns 1% cash back on groceries, gas, and recurring bill payments, with a maximum of $5,000 spent per year for gas and groceries combined, and a maximum of $5,000 for recurring bills. It also earns 0.5% cash back on all other purchases.
CIBC
Among Canada’s Big Five banks, the Canadian Imperial Bank of Commerce (CIBC) arguably markets to newcomers the most. As soon as you land at a Canadian airport, you’ll be greeted with advertisements for CIBC’s newcomer products and its global money transfer service.
With CIBC’s Smart Arrival program, you get up to 24 months of waived monthly fees with the signature Smart Account. This account type offers unlimited transactions and a one-time annual fee rebate on selected credit cards.
Additionally, a new account qualifies you for a $400 Costco Shop Card upon meeting the required conditions.
When it comes to credit cards, CIBC offers a few different reward types, including Aeroplan, Aventura Points (with the bank’s in-house program), and cash back.
In terms of the bank’s range of Aeroplan credit cards, as a newcomer, you might be offered the CIBC Aeroplan® Visa* Card, which earns Aeroplan points as follows:
- 1 Aeroplan point per dollar spent on eligible Air Canada purchases and Air Canada Vacations, as well as on gas, electric vehicle charging, and grocery purchases
- 1 Aeroplan point per $1.50 spent on all other eligible purchases
If you’d rather accumulate a flexible points currency, CIBC offers a range of Aventura cards. For newcomers, the CIBC Aventura® Visa* Card is the most likely to be offered.
This card earns Aventura Points as follows:
- 1 Aventura Point per dollar spent on eligible travel purchases via the CIBC Rewards Centre†
- 1 Aventura Point per dollar spent on eligible gas, grocery stores, electric vehicle charging, and drugstores†
- 1 Aventura Point per $2 spent on all other eligible purchases†
Aventura Points can be redeemed for any pending travel purchase made with the credit card at a rate of 1.25 cents per point, or they can be redeemed for flight tickets purchased through CIBC’s Rewards Centre.
If you’d rather earn cash back on your purchases, the CIBC Dividend Platinum® Visa* Card is worth consideration.
With this card, you’ll earn cash rebates as follows:
- 3% cash back on eligible groceries, gas, and electric vehicle charging†
- 2% cash back on eligible transportation, dining, and recurring payments†
- 1% cash back on all other eligible purchases†
BMO
The last bank we’ll explore is the Bank of Montreal, better known as BMO, which owns around 900 branches nationwide.
BMO prides itself on being an ideal choice for newcomers, and this is showcased through its NewStart program that caters to permanent residents, foreign workers, and international students.
Through NewStart, BMO features one of its flagship products, the Performance Chequing Account. As a newcomer, your monthly fees on this account type are waived for the first year.
In addition, you may receive up to $350 in cash as a welcome bonus, upon meeting certain conditions.
BMO offers a wide range of credit cards, and the rewards they offer are either BMO Rewards points, AIR MILES, or cash back.
BMO Rewards points can be redeemed a number of ways, including as a rebate against any travel purchase made on the card.
Within the BMO Rewards family of cards, you’ll likely be offered the no-fee BMO eclipse rise Visa* Card, which earns points at the following rates:
- 5 BMO Rewards points per $2 spent on eligible recurring bill payments, groceries, and restaurants
- 1 BMO Rewards point per $2 spent on all other eligible purchases
Each BMO Rewards point can be exchanged to offset travel purchases at a rate of 0.67 cent per point.
Another rewards currency that can be earned with BMO credit cards is AIR MILES.
Despite the name, AIR MILES isn’t a loyalty program for an airline. Instead, it’s a program that allows you to earn points on purchases and then redeem them for not only travel but also for groceries, gift cards, merchandise, gas, and more.
The AIR MILES card you will likely acquire as a newcomer is the BMO AIR MILES®† Mastercard®*. It earns AIR MILES at the following rates:
- 3 AIR MILES®† per $25 spent at eligible AIR MILES®†Partners†
- 2 AIR MILES®† per $25 spent on eligible purchases at grocery stores, wholesale clubs, and alcohol retailers†
- 1 AIR MILE®† per $25 spent on all other eligible purchases†
AIR MILES can be redeemed at a value of 95 AIR MILES = $10, whether for gift cards, travel, gas, or groceries.
BMO’s third rewards option is its range of cash back-earning cards, and for newcomers, the bank recommends the BMO CashBack® Mastercard®*, which earns cash back as follows:
- 3% cash back on groceries
- 1% cash back on recurring payments
- 0.5% cash back on all other purchases
Conclusion
As a newcomer with no credit history, it’s indeed tricky to get your first credit card.
However, as discussed above, the key is to apply at the bank at the same time that you open your first bank account. By doing this, the bank manually vets you as a client, giving you a higher chance of approval.
It’s therefore important for you to do some research to choose the best newcomer bank to do business with. You should consider its newcomer program and offerings, as well as its credit card line-up, and you’ll want to select the bank that best aligns with your financial goals and priorities.
In featuring the best newcomer banks above, we hope we’ve helped you in this crucial part of your financial journey in Canada.
