Choosing a card
Credit Card vs Debit Card in Canada: Which Should You Use?
When to pay with a credit card and when to use debit in Canada: rewards you give up (about $396 a year on $2,000 a month with the best no-fee card we track), fraud protection, interest, and building credit.
Is it better to use a credit card or a debit card?
A credit card, if you pay the statement in full every month: you earn rewards, keep the money in your account until the due date, and build credit. Debit is the safer choice if you tend to carry a balance, because interest at about 20% wipes out rewards of 1% to 2%.
How much do you give up by paying with debit?
On WalletReturn’s example spending of $2,000 a month, the best no-fee cards we track return $396, $396, $364 a year. Most debit cards earn nothing.
| No-fee card | Annual fee | Rewards a year on $2,000/month |
|---|---|---|
| TopCapital One Quicksilver World Elite Mastercard | $0 | $396 |
| Capital One Quicksilver World Mastercard | $0 | $396 |
| Scotiabank American Express | $0 | $364 |
Values are net annual rewards at our published point values and example spending; your own spending changes the numbers.
Which is safer if my card is stolen or used for fraud?
For credit cards issued by a bank, your maximum liability for unauthorized use is $50 unless you were grossly negligent. With debit, you’re not responsible for losses beyond your control, but the money leaves your account first and your liability can reach your withdrawal limits.
| Credit card | Debit card | |
|---|---|---|
| Most you can lose to fraud | $50 at banks, unless grossly negligent | Not liable for losses beyond your control; otherwise up to withdrawal limits |
| Whose money is at risk while it’s investigated | The lender’s | Yours |
| Interest | None if you pay in full; about 20% on balances | None |
| Builds credit history | Yes | No |
Keep your PIN private, report a lost card or suspicious transaction without delay, and check transactions in your banking app.
When does a credit card cost me interest?
Only when you don’t pay the full statement balance. Federal rules give at least a 21-day interest-free grace period on new purchases when you pay the balance in full. Cash advances usually charge interest from day one.
Does using a debit card build credit?
No. Debit spends your own money, so no credit is involved and nothing is reported to Equifax or TransUnion. A credit card paid on time every month builds your credit history.
Should I use both?
Many people do: a no-fee credit card for everyday spending they pay off in full, and debit for cash withdrawals and for stores that don’t take credit. If you’re carrying a balance, pause card spending until it’s paid off.
Keep reading
Choosing a cardSecured Credit Card vs Prepaid Card in CanadaThe difference between a secured credit card and a prepaid card in Canada: which one builds credit, what each costs, your protections, and which to choose if you’re new to credit or rebuilding.
BankingWhat to Do If Your Credit Card Is Used Fraudulently in CanadaSpotted charges you didn’t make? Call your card issuer right away, then report the fraud. Your liability is capped by law at $50, and the major networks say you won’t pay anything for unauthorized charges.
RankingsBest Credit Cards in CanadaThe 149 Canadian credit cards we track, ranked by what they’re worth in dollars in year one. Top pick right now: TD First Class Travel Visa Infinite Card at $1,251.- RankingsBest No Annual Fee Credit Cards in CanadaNo-fee Canadian credit cards ranked by how much they earn in a typical year. Top earner: Capital One Quicksilver World Elite Mastercard at about $396 a year.
Official sources and further reading
- FCAC: unauthorized credit and debit transactions ↗
- Government of Canada: credit card regulations (21-day grace period) ↗
Terms vary by product. Confirm the provider’s current terms before acting. This guide does not predict approval, realized value or credit-score changes. How WalletReturn calculates value