Many people assume that a no-fee credit card gives them the most value when it comes to credit card rewards, but it’s not so simple. If you maximize your credit card spending, premium credit cards can actually earn you more, even after paying an annual fee.
If you’re on the fence about paying for a premium card, look for first year free credit cards. These give you the card to use for a full year before you’re charged the annual fee. We’ll show you cards that currently have this offer and explain when it makes sense to pay an annual fee.
Key Takeaways
- A first year free credit card is a low-stakes way to determine if a credit card is right for you.
- To find the best card for you, take a detailed look at your spending habits.
- If you find that you don’t use a premium card enough, you can cancel the card to avoid paying an annual fee.
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The best first year free credit card offers
| Card | Annual fee | Average earn rate | Insurance | Welcome offer | Learn more |
|---|---|---|---|---|---|
| BMO eclipse Visa Infinite Card | $120 | 1.59% | 6 types |  $150 GeniusCash + Up to 80,000 bonus points, first year free (terms) | Learn more |
| BMO CashBack World Elite Mastercard | $120 | 2.02% | 13 types | $125 GeniusCash + Up to $480 cash back in the first year, first year free (terms) | Learn more |
| Scotia Momentum Visa Infinite Card | $120 | 2.08% | 11 types | $20 GeniusCash + 10% cash back for the first 3 months, first year free (terms) | Learn more |
| TD First Class Travel Visa Infinite Card | $139 | 1.94% | 12 types | $20 GeniusCash + Up to 165,000 bonus points (terms) | Learn more |
| TD Aeroplan Visa Infinite Card | $139 | 2.33% | 12 types | Up to 40,000 bonus points (terms) | Learn more |
| BMO Ascend World Elite Mastercard | $150 | 1.03% | 14 types | $150 GeniusCash + Up to 100,000 115,000 bonus points, first year free (terms) | Learn more |
| BMO Preferred Rate Mastercard | $29 | 0% | 2 types | $100 GC Boost + 0.99% interest on balance transfers for 9 months (terms) | Learn more |
Best for flexible rewards and unique perks: BMO eclipse Visa Infinite* Card
GC: $150
To earn flexible rewards and get some unique perks, there's the BMO eclipse Visa Infinite* Card.
Here's what you'll earn for rewards:
- 5 BMO Rewards points for every $1 spent on dining ($6,000 per year), groceries ($6,000 per year), gas, and transit
- 1 point per $1 spent on all other purchases
But beyond that are the perks, including 2 unique ones not found elsewhere: First, you'll earn 10% bonus points when you add an authorized user. Then, every year you have the card, you'll get a $50 lifestyle credit that's automatically applied to your first purchase of $50 or more.
Plus, it includes rare mobile device insurance that covers your cell phone for accidental damage, loss, or theft.
Best cash back for everyday purchases: BMO CashBack® World Elite®* Mastercard®*
×1 Award winner GC: $125
1x Award winner To cast a wide net when it comes to earning bonus cash back, the BMO CashBack® World Elite®* Mastercard®* offers a variety of earn rates.
Here's what you'll get on your purchases:
- 5% cash back on groceries, up to $500 in monthly spend
- 4% cash back on transit, up to $300 in monthly spend
- 3% cash back on gas, up to $300 in monthly spend
- 2% cash back on recurring bills, up to $500 in monthly spend
- 1% cash back on all other purchases
The best part is you can get your cash back on demand once you've earned just $1 in rewards. Some other cash-back credit cards make you wait a full year to get your rewards, so this is a more accessible treat. Please note, though, that there are monthly caps for each cash back category.
To top it off, it includes free roadside assistance, one of the rarest perks found on credit cards, and 13 types of insurance coverage.
Best for groceries and recurring bills: Scotia Momentum® Visa Infinite* Card
×2 Award winner GC: $20
2x Award winner If you're looking to save money on groceries and recurring bills, some of the most common and expensive budget items for most Canadians, you'll earn some nice bonus cash back with the Scotia Momentum® Visa Infinite* Card.
Here's what you'll earn with this card:
- 4% cash back on groceries and recurring bill payments
- 2% cash back on gas and transit
- 1% cash back on all other purchases
This premium credit card also includes 11 types of insurance coverage and access to premium Visa Infinite perks. These include exclusive access to food and dining events, convenient concierge services, complimentary and/or discounted GigSky mobile plans, and much more.
Best for travel insurance coverage TD First Class Travel® Visa Infinite* Card:
GC: $20
The TD First Class Travel® Visa Infinite* Card gives cardholders some of the most robust insurance coverage of any card on our list. It offers 12 different types, including 21 days of emergency medical coverage – 4 days for seniors over age 65.
Take a look at what cardholders earn on purchases:
- 8 points per $1 spent on travel booked online through Expedia For TD
- 6 points per $1 spent on groceries, restaurants, and public transit
- 4 points per $1 spent on recurring bill payments, streaming, digital gaming, and media
- 2 points per $1 spent on all other purchases
This card also includes airport lounge access via the Visa Airport Companion program, and cardholders get a sweet annual travel credit of $100 when they make a $500+ purchase through Expedia For TD.
Best for earning Aeroplan points: TD® Aeroplan® Visa Infinite* Card
Loyal Air Canada travellers will find the TD® Aeroplan® Visa Infinite* Card a valuable choice. Along with Air Canada-specific perks, the card also earns these rewards:
- 1.5 points per $1 spent on eligible gas, electric vehicle charging, grocery and direct through Air Canada purchases
- 1 point per $1 spent on all other purchases
When you book an Air Canada flight with this card, you’ll enjoy free checked bags and preferred pricing on your Aeroplan reward flights. Plus, if you’re trying to maximize your Aeroplan points, this card gives you a boost with the ability to earn a 45,000-point welcome bonus.
Best for Mastercard travel perks: BMO Ascend™ World Elite®* Mastercard®*
GC: $150
The BMO Ascend™ World Elite®* Mastercard®* provides the user with a Mastercard Travel Pass membership and, therefore, airport lounge and travel perks. These lounge perks include complimentary drinks, free wifi, shower access, spa treatments, and much more.
It also has solid insurance coverage, offering 14 types of coverage. This extensive travel insurance is particularly impressive given the card's low $150 annual fee.
For everyday use, though, here are the rewards you'll earn with this Mastercard:
- 5 points per $1 spent on travel
- 3 points per $1 spent on dining, entertainment, and recurring bills
- 1 point per $1 spent on all other purchases
Best for low interest rates: BMO Preferred Rate Mastercard®*
GC: $20 + $80
If you're hoping to save on interest as well as that first-year fee, the BMO Preferred Rate Mastercard®* is an excellent choice. You'll pay 13.99% on purchases and 15.99% on cash advances, plus there's a promo balance transfer offer of 0.99% for 9 months.
Wondering how much money the BMO Preferred Rate Mastercard could save you? Try using our handy interest calculator to determine the amounts:
Credit Card Interest Calculator
Low interest cards like this one don't usually offer much for rewards or perks, and this one isn't much different. It does, however, provide extended warranty and purchase protection insurance. And even after your first fee-free year is over, the annual cost is a mere $29, which saves you even more money in the long run.
How a first year free card can benefit you
Some offers might seem too good to be true, but first-year free offers often benefit both the cardholder and the card issuer.
Taking advantage of these offers is your chance to take a premium credit card for a test drive and answer the following questions before making an annual fee commitment:
- Will my spending justify the fee?
- Does the card suit my needs and my spending?
- Will I get any use out of the card's perks?
- Does the bank have a user-friendly website and mobile app?
- Is the credit card's customer service helpful?
With a free year of card ownership, you'll hopefully be able to answer all these questions and get a good idea of whether you want to take on the annual fee.
This free period is also good for the issuer – it's a way for them to reach customers who wouldn't normally apply for a card with an annual fee.
And at the end of the year, they either hope you're impressed enough with the card that you'll want to stick around, or that you won't be bothered enough to cancel your card.
My first year is over, now what?
A year without an annual fee is great, but what should you do when your free year is up?
First, you'll need to decide whether to keep the card or not.
If you answered the above questions and feel pretty good about the card, you might see that the annual fee is worth it – you're probably getting more rewards in the long run anyway.
Or maybe you're not super happy with the card and think you'd be better off with a lower annual fee. Either way, the free trial year is clearly helpful.
Here are some tips on how to proceed after that first year:
Negotiate your annual fee
If you want to hang on to the card, you could try using the power of persuasion. Simply call customer service and see if you can negotiate your annual fee.
Be honest – let them know you like the card, but you're not sure you can justify the high annual fee. Remind them that you always pay your bills on time and would be happy to remain a loyal customer.
Be friendly and sincere – the worst that could happen is they say no.
Downgrade to the no-fee version
If you're happy with the rewards you've earned and want to keep letting them pile up, you could simply switch to the no-fee or lower-fee version.
This way, you can keep the rewards you earned in your first year, and although you won't earn as many rewards with your lower fee card, you'll continue to earn on every purchase you make.
Here are some popular premium credit cards and their no-fee counterparts:
| Premium version | No-fee version |
|---|---|
| MBNA Rewards World Elite Mastercard | MBNA Rewards Platinum Plus Mastercard |
| Scotiabank Gold American Express Card | Scotiabank American Express Card |
Shop around for a card that suits you better
Or maybe you want a new credit card – one that's the perfect fit for you.
Not sure how to find the perfect card?
We've developed a credit card quiz that:
- Takes less than 3 minutes
- Takes your personal preferences and spending into account
- Makes recommendations based on your choices
- Lets you earn up to $25 when you refer your friends
Would you like to know which credit cards are right for you?
Take our ceditcardGenius Quiz to find out.
When it makes sense to pay an annual fee
How do you know when it's time to switch from a low-fee to no-fee credit card? Or whether to skip the no-fee phase altogether? It may seem counterintuitive to spend money in order to use a credit card, but cards with annual fees typically offer more valuable rewards, better insurance, and more premium perks.
The most important thing is to use your card enough that the value you get from it exceeds the annual fee.
For instance, if you pay for a premium travel card, but don’t use it to earn free flights or enough cash back to justify the fee, then you should probably stick with a traditional no-fee credit card.
As you’re shopping for cards, consider how much you would have to spend to break even with the card’s fee. This is known as the tipping point, and it’s when upgrading to the premium version would make sense.
For most of these cards, the tipping point is surprisingly low:
| No-fee version | The tipping point | Premium version |
|---|---|---|
| SimplyCash Card from American Express | $917 per month | SimplyCash Preferred Card from American Express |
| Scotia Momentum No-Fee Visa Card | $746 per month | Scotia Momentum Visa Infinite Card |
| MBNA Smart Cash Platinum Plus Mastercard | $878 per month | MBNA Smart Cash World Mastercard |
| National Bank Allure Mastercard | $379 per month | National Bank ECHO Cashback Mastercard |
Please note: These numbers were calculated based on a typical spend breakdown without maximizing any spending categories.
Depending on your spending, these numbers could be even lower.
Take the Scotia Momentum Visa Infinite Card and the Scotia Momentum No-Fee Visa Card, for instance. If you spend $746 a month on your credit card, having the premium Visa Infinite version would be better for you. That's only $186.50 per week.
But, wait – there's more! If you're only using your Scotiabank cash-back card on recurring bills or grocery purchases, the tipping point number goes down to only $306 a month. At that point, you might as well upgrade to the Scotia Momentum Visa Infinite Card
FAQ
Which credit cards have first-year free offers?
There are quite a few credit cards that offer no annual fee for the first year, including the BMO eclipse Visa Infinite Card, BMO CashBack World Elite Mastercard, and Scotia Momentum Visa Infinite Card. Cardholders can still enjoy all the usual benefits and perks of the credit card during this first year.
What's the best credit card offering the first year free?
We hesitated to select a single best credit card with the first year free, as the best card for individuals depends on personal preferences and spending habits. That said, the BMO Ascend World Elite Mastercard has the highest annual fee, tons of insurance, and World Elite Mastercard benefits, making it one of the best.
What is the best credit card with no fees?
If you’re looking for a no-fee cash back credit card, the best card is the Rogers Red World Elite Mastercard as it has impressive cash back rates and other perks. If you prefer a no-fee travel card, the More Rewards RBC Visa Infinite is best, providing exclusive Visa Infinite benefits.
Should I get a no yearly fee credit card?
If you find that you don’t use a premium fee enough to justify the annual fee, then a no-fee credit card is probably a better option. However, keep in mind that you might lose valuable perks or insurance coverage by making this switch.
What do I do when my first year free credit card promo is over?
If you decide to keep the card once your free year is over, you’ll see a charge appear for the annual fee on your credit card’s statement. If you don’t want to keep the card, contact customer service (ideally before the charge hits).
creditcardGenius is the only tool that compares 126+ features of 228 Canadian credit cards using math-based ratings and rankings that respond to your needs, instantly. Take our quiz and see which of Canada's 228 cards is for you.
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