More Canadians now qualify for credit cards with flexible approval

The Shift Toward Flexible Approval

Traditionally, credit card approval required a strong credit score (typically 660 or higher), stable income, and an established credit history. However, economic shifts, including rising living costs and diverse consumer needs, have prompted issuers to rethink their approach. In 2025, more Canadians qualify for credit cards due to:

• Lowered Barriers: Many cards now have minimal or no income requirements, making them accessible to students, part-time workers, and low-income individuals.

• Secured and Prepaid Options: Secured cards, requiring a refundable deposit, and prepaid cards, which don’t rely on credit checks, offer guaranteed or near-guaranteed approval.

• Fintech Innovation: Digital platforms like Neo Financial and KOHO use advanced algorithms and alternative data (e.g., banking activity) to assess creditworthiness, bypassing traditional credit score thresholds.

• Focus on Newcomers and Young Canadians: Issuers are targeting newcomers to Canada and young adults with tailored cards that don’t penalize limited credit history.

This shift aligns with a broader push for financial inclusion, helping more Canadians build credit and access rewards without facing stringent requirements.

Types of Credit Cards with Flexible Approval

Several credit card types now offer flexible approval, catering to diverse financial situations. Below are the most prominent options in 2025, based on recent trends and offerings.

1. Secured Credit Cards

Secured cards require a security deposit (e.g., $50-$10,000) that sets your credit limit, making them accessible to those with poor or no credit. They report to credit bureaus, helping build credit.

• Example: Neo Secured Mastercard

  • Features: Guaranteed approval with a $50 minimum deposit, no hard credit check (except in Quebec), up to 5% cashback at Neo partners, 1% on gas and groceries, no annual fee.

  • Eligibility: Canadian resident, age of majority, $50 deposit.

  • Benefits: Flexible credit limit (up to $10,000), instant approval, and digital card for immediate use via Apple Wallet or Google Pay.

• Pros: Near-guaranteed approval, rewards rare for secured cards, builds credit.

• Cons: Requires deposit, rewards limited outside Neo partners.

2. Prepaid Credit Cards

Prepaid cards, like reloadable debit cards, don’t require credit checks or credit history, making them ideal for those ineligible for traditional cards.

• Example: KOHO Essential Prepaid Mastercard

  • Features: 1% cashback on groceries, transportation, and dining, up to 6.5% at select retailers, no monthly fee, instant approval, free credit score monitoring.

  • Eligibility: Canadian resident, age of majority, no credit check.

  • Benefits: Virtual card for instant use, budgeting tools via app, no risk of debt.

• Pros: Accessible to all, no credit impact, rewards uncommon for prepaid cards.

• Cons: Doesn’t build credit, requires preloading funds.

3. No-Income-Requirement Credit Cards

Some unsecured cards have eliminated income thresholds, broadening access for students, retirees, or low-income earners.

• Example: American Express Cobalt Card

  • Features: 5x points on restaurants/food delivery, 3x on streaming, 2x on transit/gas, $12.99 monthly fee, instant approval for eligible applicants, no minimum income requirement.

  • Eligibility: Canadian resident, age of majority, decent credit score (typically 660+).

  • Benefits: High rewards on everyday spending, flexible redemption (travel, statement credits), travel insurance.

• Pros: Generous rewards, accessible to those without high income, instant approval.

• Cons: Monthly fee, limited acceptance at some retailers (e.g., Loblaws).

4. Store and Retail Credit Cards

Retail cards, often tied to specific merchants, have lower approval thresholds and are easier to obtain for those with fair credit (580-659).

• Example: Triangle Mastercard (Canadian Tire)

  • Features: 4% back in CT Money at Canadian Tire and affiliates, 1.5% on groceries (excludes Costco/Walmart), 5 cents per liter at Gas+, no annual fee, instant approval at stores or online.

  • Eligibility: Canadian resident, age of majority, fair credit score.

  • Benefits: Rewards for frequent Canadian Tire shoppers, no-fee financing on qualifying purchases ($150+).

• Pros: Easy approval, rewards for retail spending, mobile wallet compatibility.

• Cons: Limited redemption options, high interest rates (20.99%).

5. Student Credit Cards

Designed for young Canadians, these cards have relaxed criteria, focusing on building credit for those with minimal history.

• Example: BMO CashBack Mastercard – Student

  • Features: 3% cashback on groceries, 1% on recurring bills (capped at $500/month), 0.5% on other purchases, no annual fee, instant approval.

  • Eligibility: Canadian resident, age of majority, enrolled in post-secondary education.

  • Benefits: Rewards on essentials, flexible redemption (statement credit or savings account).

• Pros: No income requirement, student-friendly, builds credit.

• Cons: Low base earn rate (0.5%), capped bonus categories.

Benefits of Flexible Approval Credit Cards

• Wider Access: Canadians with low or no credit, including newcomers, students, or those recovering from financial setbacks, can qualify.

• Credit Building: Secured and unsecured cards report to credit bureaus, helping improve scores with responsible use (e.g., on-time payments, low utilization).

• Rewards and Perks: Many cards, like Neo Secured and Amex Cobalt, offer cashback or points, rare for low-threshold cards.

• Instant Approval: Online applications often provide decisions within 60 seconds, with virtual cards for immediate use via digital wallets.

• Financial Inclusion: Prepaid and secured options ensure even those with poor credit can participate in the credit system without risking debt.

Challenges and Considerations

• Higher Costs: Secured cards require deposits, and some unsecured cards have fees (e.g., Amex Cobalt’s $12.99/month). Prepaid cards may have loading fees.

• Limited Rewards: Cards like KOHO or BMO Student have caps or lower earn rates outside bonus categories.

• Credit Checks for Unsecured Cards: While secured and prepaid cards avoid hard inquiries, unsecured cards (e.g., Triangle Mastercard) may require a credit score of 600+, potentially impacting scores if rejected.

• Restricted Acceptance: American Express cards, like Cobalt, aren’t accepted everywhere, such as Loblaws-owned stores.

• Risk of Overspending: Easy approval can tempt overuse, leading to high-interest debt (19.99%-29.99% APR) if balances aren’t paid in full.

Tips for Choosing and Using Flexible Approval Cards

1. Match Your Needs: Choose a card based on your spending habits. For groceries, BMO CashBack or Triangle Mastercard excel; for dining, Amex Cobalt is ideal.

2. Start with Secured or Prepaid: If credit is poor, opt for Neo Secured (to build credit) or KOHO Prepaid (to avoid debt). Transition to unsecured cards as your score improves.

3. Pay Balances in Full: Avoid interest charges (often 20.99%+) by paying off your balance monthly, especially on unsecured cards.

4. Monitor Credit Utilization: Keep balances below 35% of your limit (e.g., $350 on a $1,000 limit) to boost your credit score.

5. Check Eligibility: Use pre-qualification tools (e.g., Ratehub’s CardFinder) to assess approval odds without affecting your score.

6. Limit Applications: Multiple hard inquiries can lower your score. Apply for one card at a time, focusing on those with flexible criteria.

7. Track Your Credit: Use free tools like KOHO’s credit score monitoring or Borrowell to measure progress and ensure accurate reporting.

Why More Canadians Qualify in 2025

The expansion of flexible approval cards reflects market and societal changes:

• Fintech Growth: Companies like Neo and KOHO leverage technology to offer instant approvals and virtual cards, reducing reliance on traditional credit checks.

• Newcomer Support: Cards like Neo Secured and Triangle Mastercard cater to newcomers, who often lack Canadian credit history but need access to credit.

• Student Focus: Issuers like BMO target students with no-income cards, recognizing their potential as long-term customers.

• Economic Pressures: With rising costs, issuers are offering low- or no-fee cards to attract budget-conscious consumers, including those with fair credit.

Data from TransUnion Canada (2024) shows that 26% of Canadians have subprime credit (scores below 600), highlighting the demand for accessible credit options. Flexible approval cards address this gap, enabling more people to build financial stability.

Conclusion

In 2025, more Canadians qualify for credit cards thanks to flexible approval processes that prioritize accessibility and inclusion. From secured cards like Neo’s to prepaid options like KOHO and no-income cards like Amex Cobalt, there’s a card for nearly every financial situation. These cards not only provide access to credit but also offer rewards, instant approvals, and credit-building opportunities. By choosing the right card, paying on time, and managing spending wisely, Canadians can leverage these tools to improve their credit and achieve financial goals. Explore options carefully, align them with your needs, and take advantage of this era of expanded credit access.