Canadians love their rewards — nearly 90% of households own at least one credit card, and 55% of rewards cardholders pay an annual fee to unlock perks like travel points, cash back, and insurance, according to a report released by the Canadian Bankers Association. With fees ranging from $24 to $699, these costs can quickly add up.
Tip #1 – Banking plans that waive annual fees
Many Canadian banks offer banking plans that waive the annual fee on a selection of their premium credit cards. For example if you open an RBC VIP bank account, you can get a full waiver on a premium credit card’s annual fee, such as the RBC® British Airways Infinite Visa — that’s a $165 value. TD also offer an annual rebate with its All-Inclusive Banking Plan (with a $29.95 monthly fee, or waived if you keep a $5,000 monthly balance), as does Scotiabank with its Ultimate Package at a cost of $30.95 per month (or waived with a $5,000 monthly balance). Other banks to check are National Bank, CIBC as well as BMO.
Tip #2 — Call and ask for your annual fee to be waived
You know the old saying “squeaky wheels get the grease”? It’s true. As our very own Wayne Gretzky said, “you’ll miss 100% of the shots you never take.”
Turns out these cliches are based in truth. A J.D. Power Canada survey found that 26% of cardholders successfully negotiated fee waivers just by calling and asking. This is a particularly powerful strategy if you’re a long-time client or a big spender — or your card issuer anticipates that you’ll become a big spender (like when you graduate). That’s because credit card issuers will prefer to keep your business rather than lose you and, as a result, will waive annual fees now for committed cardholders in the future.
Even if you’re a new cardholder, call and let them know you’ve received an offer with a fee waiver from a competitor, or that your checking account with your retail bank waives the annual fee for one of their premium credit cards. You never know if that squeak can end up greasing the no-annual-fee wheel.
Tip #3 — Get a credit card with a first year annual fee waiver
You don’t buy a new pair of jeans without first trying them on do you? Why pay for a new rewards credit card before trying it out?
Many premium cards in Canada will waive the annual fee for the first year. For example, Scotiabank offers an American Express card with its first year fee waived. BMO also offers a Mastercard with the first year fee waived. Keep in mind these first-year fee waivers change frequently. To keep up to date, be sure to comparison shop. Use the Money.ca credit card comparison tool to compare more than 140 cards in just 5 seconds. Who knows, you may end up with a premium card for free for one year (or decide on a premium card that offers other perks, such as the free annual companion fare offered through the RBC® British Airways Visa Infinite).
Remember, with so much fine print in the industry, credit card issuers should have to earn our trust, before we shell out a dime.
Tip #4 — Downgrade your card
If you have a premium credit card and you find it’s not worth the annual fee, you may be able to ask for a downgrade to one of the credit card issuers no fee cards.
Downgrading instead of cancelling a credit card helps preserve your credit history, which is an important factor in your credit score. Since length of credit history makes up about 15% of your score, according to Equifax Canada, keeping a credit card account active — even at no fee — can go a long way to maintaining a good credit history and a strong credit score.
Tip #5 — Cancel your card
If you found yourself another premium credit card, it may not make sense to have multiple credit cards with different annual fees at the same time. That’s especially true if you’re focused on exploiting welcome bonus offers throughout the year.
But there are a few considerations before you cancel your card. According to Equifax Canada, cancelling a card can temporarily lower your score if it raises your utilization ratio. A credit card utilization ratio (sometimes called credit utilization rate) is a measure of how much of your available credit you’re actually using. For example, if you have two cards each with a limits of $5,000 (so a total credit limit of $10,000) and you carry a balance of $2,000 on one card and $500 on another card, then your utilization ratio 25% ( $2,500 ÷ $10,000 = 25%).
Your utilization ratio is one of the most important factors in calculating your credit score in Canada. Lenders — including credit card issuers — look for utilization ratios below 30%, which is considered a safe threshold according to Equifax Canada. To minimize impact of a cancelled card on your credit score, be sure to pay down loan balances before cancelling.
Why does your credit utilization ratio matter?
Major credit bureaus in Canada, including Equifax Canada and TransUnion, consider utilization a strong predictor of risk. The lower the ratio the better because it shows you’re not relying too heavily on credit. A high ratio (typically above 30%) can drag down your credit score, even if you always make payments on time.
To help your chances of getting a premium credit card and low or no annual fee, consider keeping your credit utilization ratio below 30% — under 10% is ideal. A great way to do this is to pay down balances before the statement date as this can lower reported utilization, since lenders usually report balances at statement time.
Tip #6 — Compare cost vs value
Before applying for a new card or downgrading or cancelling, do the math.
If your $150 annual fee card earns you $400 in cash back or covers $200 in travel insurance you’d otherwise buy, the card could be worth keeping.
What is the best credit card in Canada? It might be the RBC® British Airways Visa Infinite, with a $1,176 first-year value. Compare more than 140 cards in just 5 seconds. Sign up for the RBC® British Airways Visa Infinite before February 1, 2026 and get up to 60,000 in Avios† Welcome Bonus points — worth more than $1,000 in value.
Bottom line
Annual fees don’t have to be a sunk cost. By exploring banking packages that rebate fees, negotiating directly with your issuer, or strategically using first-year offers, Canadians can keep more money in their pockets while still enjoying valuable credit card perks.
The key is to regularly assess whether the rewards you’re earning outweigh the fees you’re paying — and to make changes when they don’t. A little planning can save you $100 or more each year, without giving up the benefits that make credit cards worthwhile.
Sources
1. Canadian Bankers Association: Credit cards: Use and benefits (June 24, 2025)
2. J.D. Power: Declining Financial Health Puts Strain on Credit Card Customers in Canada, J.D. Power Finds (September 12, 2024)
2. Equifax Canada: Credit Scores
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.