The Best Credit Cards for Beginners

If you’re new to credit or you just moved to Canada, you’ll find yourself looking into credit cards for beginners soon enough. Establishing a credit history is one of the best things you can do for your personal finances.

A good credit score makes it possible to borrow the likes of a personal loan affordably. But having a solid credit profile could also help you get into an apartment or land a job.

It’s also important to note that being a credit newbie is a sort of catch-22. It’s hard to get credit without a credit history and its impossible to establish a credit history without getting credit.

Fortunately, there are some credit cards for beginners that can help you establish a credit profile without too much hassle. Read on to learn more.

What it Takes to Build Credit as a Beginner

There are five main factors that impact your credit score. How you handle this will either help or hurt you as you work to build credit. Take a look:

1. Payment History

The best way lenders can determine whether you’ll make your payments on time every month is whether you’ve paid your bills on time in the past. As such, your payment history is key in determining your credit score.

You can build a positive payment history by using a beginner credit card (we’ll cover some options in a bit) and paying at least the minimum due each month. You can go even further and pay off the bill in full and avoid interest charges.

Best credit cards for beginners

Even one late payment can hurt your credit score. So, consider setting up automatic payments to avoid forgetting to pay your bills on time.

2. The Types of Credit You Have

Lenders like to see that you can handle more than one type of credit. This might include credit cards, a mortgage, car loans, a personal loan, or a student loan.

While it can be tough to get all of these credit types as a beginner and when you have no credit history, you can certainly start building up your credit profile with a credit card.

That said, it’s important to avoid borrowing money unless you absolutely need it. For example, you should avoid taking out a loan or paying interest just for the sake of building credit.

3. How Much You Owe

While credit cards for beginners often have low credit limits, it’s not a great idea to max out your card every month. In fact, the lower your credit utilization — aka your balance divided by your credit limit — the better.

In general, try to keep your credit utilization below 35% to improve your credit score. For example, if you have a $500 credit limit, keep your balance below $175.

4. The Length of Your Credit History

The longer you’ve been using credit responsibly, the more lenders are willing to trust you. Unfortunately, this means that you need to be patient as you use your credit card and other credit types. It’s also important to avoid taking out new debts too often, like a personal loan.

In addition to looking at how long you’ve been using credit, your credit score also considers the average age of your accounts. So, the more accounts you open in a short period, the lower your average account age will be.

A great long-term tip for building your credit history is to keep your old credit card accounts open. After a couple of years, you might want to abandon your beginner credit card and go with a different option. Rather than closing the account, just put it in a drawer and forget about it.

This will increase your average account age and show lenders that you’re a reliable account holder.

5. New Credit Inquiries

Another reason why it’s important to avoid taking out debt too often is that you’ll get a hard hit inquiry every time you apply for credit. Too many of these inquiries in a short period can signify that you’re desperate or you can’t manage your finances without debt.

The Best Credit Cards for Beginners

Scotiabank Gold American Express Card

All things considered, the Scotia Gold American Express Credit Card is the best option available for credit newbies. It offers a minimum credit limit of $5,000 and has a decent rewards program.

For starters, you’ll earn 15,000 points with your first $1,000 in everyday purchases in the first three months.

You’ll also get 4 Scotia Rewards points for every dollar you spend at eligible gas stations, grocery stores, and on dining and entertainment; plus 1 point per dollar spent elsewhere. You can use your points to book travel arrangements with no restrictions.

Scotiabank Gold American Express Card

The card requires no credit history, but you will pay a $99 annual fee which eats into the value you get from the card’s rewards program.

Considering the card’s annual fee and high-interest rate, it’s best if you can manage to use the card without carrying a balance from month to month.

HomeTrust Secured Visa (Low Rate)

The HomeTrust Secured Visa Credit Card charges an annual fee of $59 but makes up for it with a much lower interest rate than you can expect from other credit cards for beginners.

According to the card issuer, virtually everyone who applies gets approved. The main reason that your application could be denied is if you have a bankruptcy that hasn’t been discharged. But since you’re new to credit, that’s unlikely to happen.

Another reason for denial would be if you are a resident of Quebec, where the card isn’t available.

Because this is a secured card, you’ll need to put down a security deposit of $500 to $10,000 to get approved. You can choose your deposit amount and your credit limit will be equal to your deposit.

Keep in mind, though, that you won’t be able to access that cash again until you close the account. So, it’s not a good idea to put down all of your savings just to get a higher credit limit on your beginner credit card.

Refresh Secured Visa

If you’re looking for a lower annual fee, the Refresh Secured Visa is worth considering. It isn’t difficult to get approved for this card and the interest rate is slightly lower than the rate at the Scotiabank Gold American Express Card.

That said, it does require a security deposit. That deposit can be as little as $200 or as high as $10,000, depending on how much cash you have on hand.

With this card, your credit limit may or may not be equal to your deposit. The card issuer will determine your limit based on your application and credit information.

In addition to helping you build credit, Refresh Financial also offers the Refresh f.i.t. program. This program provides a set of online courses that can help you improve your money management skills which can make managing your beginner credit card easier.


If you’re searching for credit cards for beginners, the cards here will give you a few solid options to consider. While two of our top choices require a security deposit, there is no deposit required if you are approved for the Scotia Gold American Express Credit Card.

So, as you consider these cards and other credit cards, think about your preferences. For example, would you rather pay a high annual fee or put up a security deposit with cash you don’t need right now? Are you a big enough spender that you can result in a higher annual fee with extra rewards? Or do you plan to use the card sparingly, in which case it makes more sense to get a card with a lower fee?

There’s no right answer to any of these questions. As you think about your answers to these important questions, you’ll soon find the right beginner card to help you build your credit.

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