Just walking into your bank and taking whatever cash back credit card they offer you could be a major rip off. If your family spends a reasonable $25,000 annually on credit, you would earn $125 in cash with the worst cards. The top ranked card on my list would earn you $411 - that's more than 3x the cash - big difference, eh?
Travel rewards have become increasingly complicated and less rewarding over time, so Canadians everywhere are starting to embrace the simplicity of cash and their credit card reward of choice.
Simplicity doesn't mean that choosing a cash back card is easy though!
There are still annual fees, different bonus spending categories, insurance coverage, and other perks to consider. Not to mention subtle details like how the cash back is paid to you (statement credit, cheque, direct deposit), caps and tiers, and how often your cash is paid out. I've taken all these things into account with my comprehensive rating system - you won't find that anywhere else.
Canadian Cash Back Credit Card Rankings for 2016
48 cash back credit cards were considered for this comparison - the top 10 are listed in the table below from best to worst. Please note that the table scrolls horizontally by using the slider at the bottom.
|Apply||MBNA Rewards World Elite MasterCard|
|Apply||BMO CashBack World Elite MasterCard|
|Apply||Scotia Momentum Visa Infinite|
|Apply||CIBC Dividend Visa Infinite|
|Apply||Rogers Platinum MasterCard|
|Apply||SimplyCash Preferred Card from American Express|
|Apply||Capital One Aspire Travel World Elite MasterCard|
|Apply||Tangerine Money-Back Credit Card|
|Apply||President's Choice Financial World Elite MasterCard|
|Apply||SimplyCash Card from American Express|
|Overall Score||Cash On $25,000 Spend1||Cash On $100K Spend2||Annual Fee||Sign Up Bonus Value3||Insurance Score||Perks Score|
* Limited time promotion ending soon.
1. $25,000 in annual spending works out to $2,083 in monthly spending which is achievable for a typical Canadian family funneling most of their spending through their credit card. The cash back shown is calculated by splitting spending sensibly across spending categories like groceries, gas, drugstore, travel, bills, and everyday spending. All spending bonuses, tiers, limits, and caps are taken into account in these calculations. Sign up bonuses are NOT included in these numbers, so that will be an extra perk for you. Finally, the annual fee is deducted from the cash back earned giving you the true cash back earned for the year.
2. $100,000 in annual spending works out to $8,333 in monthly spending which is too high for most families. I have included these numbers to better evaluate cards and give an advantage to cards who don't have spending caps or limits. It also allows cards that have a good tier system to shine at higher spending levels. The cash back shown is calculated by splitting spending sensibly across spending categories like groceries, gas, drugstore, travel, bills, and everyday spending. All spending bonuses, tiers, limits, and caps are taken into account in these calculations. Sign up bonuses are NOT included in these numbers, so that will be an extra perk for you. Finally, the annual fee is deducted from the cash back earned giving you the true cash back earned for the year.
3. The sign up bonus value is the maximum possible dollar value you can get from the bonus if you take full advantage of it. So, with a 5% gas and grocery bonus for 6 months with a $250 cap - $250 would be the value.
The Top 3 In Detail
1) MBNA Rewards World Elite MasterCard
This card has been around since 2011, but is often overlooked. It is actually so good that it is the secret weapon of cash back credit card holders - a straight 2% cash back on all purchases with no strings, bonuses, limits, or caps and you can get paid whenever and however you want - SWEET.
Why then is it overlooked? Maybe it's because it is marketed as a travel rewards card - but why would you redeem your points for travel when you can redeem them at the same 2% rate for cash? Or, maybe it's because it doesn't have a flashy 4% bonus on gas and groceries like the Scotia Momentum Visa Infinite. But, when you crunch the numbers, it turns out a flat 2% cash back earning rate is almost always better anyway.
If you look closely at the scores above, you'll see many of the top cards are very closely ranked. Then, you'll see that this card beats them all by a wide margin - that's because it is hands down the best cash back credit card in Canada!
Why You Want It:
- Top flat cash back rate of 2%, the highest of any card.
- 10,000 bonus points as a sign up bonus which equates to $100 in free money.
- Extra cardholders are free so your whole family can rack up the rewards quickly.
- No limits, tiers, or restrictions on how much cash you can earn.
- Unlimited flexibility on how you get your rewards: cheque, bank deposit, statement credit, travel, gifts, gift cards, and more.
- Strong insurance package including rare Price Protection that allows you to get refunded if you see a cheaper price on any product you might purchase anywhere.
- Redeem your cash any time you want instantly.
I've had this card in my wallet since it launched in 2011 and use it as my primary credit card every day. In 2015, I redeemed $1052 myself from using it - you could do the same.
2) BMO CashBack World Elite MasterCard
At first glance, this newer card from BMO looks like a slightly lesser version of the #1 ranked card. It gives you a slightly lower 1.75% cash back rate on all purchases and a slightly higher $120 annual fee.
That's where the similarities end though because this card is extremely strong in insurance coverage and perks. It has double the extended warranty and purchase protection of most of its competitors, includes travel medical and trip cancellation insurance - which are both rare, and even comes with complimentary roadside assistance. The roadside assistance in particular is a great value if you are a road warrior and can ditch CAA or another paid coverage you might have. It also has top notch car rental insurance if you happen to rent vehicles frequently for work or another reason.
Why You Want It:
- A high flat cash back rate of 1.75%.
- 4% cash back for the first 4 months - capped at $250.
- Free roadside assistance is included - BMO is the only issuer to offer this.
- No limits, tiers, or restrictions on how much cash you can earn.
- The best insurance package of any cash back card.
- Amazing card for heavy drivers because of all the car rental and driving related perks.
3) Scotia Momentum Visa Infinite
Often hailed as the best cash back card in Canada, this card is still nothing to sneeze at. It really shines if you spend a lot on gas and groceries because the 4% bonus on those purchases is unmatched by any of its competitors. The 2% bonus on recurring bills is also quite unique and makes a good portion of most people's everyday spending applicable for a bonus.
The 1% regular rate for purchases is what drags it down in the rankings, but not by much. The only way to determine if this is the right card for you is to crunch your gas and grocery numbers and see if the bonus you earn there outweighs the straight 2% you'll earn with MBNA.
Why You Want It:
- 4% cash back on gas and grocery spending - no one else comes close.
- First year annual fee of $99 is often waived so you can try it out at no cost.
- Good insurance package including 15 days travel medical - the highest of any in the top 3.
- Very high $25,000 spending limits on bonus gas and grocery cash back.
- First year annual fee of $99 is being waived for a limited time.
What Matters To You?
What you think is the most important feature of a credit card might not match my rankings exactly. So, I've broken down the top cards by popular features below to help you choose one that's right for you.
Getting The Most Money
If you want a cash back credit card, then chances are the amount of money it pays out to you on a yearly basis is pretty high up there on the importance scale. For some people, that may be all that matters - flexibility, fees, income requirements, perks, and insurance probably mean very little to you.
If this is the case, then you definitely want the MBNA Rewards World Elite MasterCard. A typical family spending $25,000 annually (about $2000/mth) will net $411 in cash after the annual fee is paid for. That's a very high 1.64% return on spending. In the first year, you'd earn $511 because of the $100 sign up bonus.
The Scotia Momentum Visa Infinite is a solid second choice. The 1% on regular purchases is a real bummer, but it turns out those massive 4% bonuses on gas and groceries really do lift the overall payout. A typical family spending $25,000 annually will earn net $401 in rewards annually.
Where You Spend Your Money
Many cards listed here give you bonus cash back on certain types of spending like gas, groceries, drugstore, bills, restaurants, and travel. If you spend most of your money on a small group of things that fit into these categories, then you could end up further ahead choosing a card that gives you a matching bonus.
The most popular card with good spending bonsues is the Scotia Momentum Visa Infinite. It gives you 4% cash back on gas and grocery purchases and 2% cash back on recurring monthly bills - which is a very rare bonus. It only offers 1% cash back on everyday spending though, so it's best if you spend heavily on gas, groceries, and bills.
The new Tangerine Money-Back Credit Card is another great choice because it is the first and only card that allows you to choose which categories you earn bonus cash in. You can choose up to 3 categories to double your regular cash back from 1% to 2%. It also has no annual fee and no caps or limits on cash earned making it a great choice for many.
As much as I try to convince people that annual fees aren't necessarily a bad thing if you get a much bigger reward return to make up for it, there are those who are dead set against ever paying a fee. I can understand that and fortunately there are still some good no-fee options.
If you went the most cash and a lot of extra flexibility being able to choose your own 2% bonus categories, then the Tangerine Money-Back Credit Card is what you want. Another major perk is that there are no limits to the amount of cash back you can earn - even in the bonus categories.
You can see my complete no fee cash back credit card rankings here.
Lower Minimum Income Needed
The SimplyCash Preferred from American Express is a great choice here. Most of the other top cards require at minimum $35,000 in personal income while the World and World Elite cards ask for $60-$70,000. The SimplyCash only requires $15,000 - so pretty much anyone with a job can qualify. Another possible choice would be the Rogers Platinum MasterCard that has no specific minimum - but that card only really shines if you have a Rogers or Fido service to pair with it.
One thing to remember about minimum incomes is that you can often still be approved for a credit card that has a minimum that is higher than what you are currently earning. As long as you have good credit and a good payment history, then they will usually assess your application on a case by case basis. If you don't appear to be high risk, they will likely approve you anyway. Your chances will vary by bank but if there is a card you really want, you might as well give applying a shot.
Great Perks And Insurance
The BMO CashBack World Elite MasterCard is the clear winner here. It offers 13 different types of insurance and is better than all the other cards in 6 of those categories - no small feat. Not only that, but it has complimentary roadside assistance, which very few other cards offer and concierge service.
The Capital One Aspire Travel World Elite MasterCard is another solid choice. It makes sense because it is a travel rewards card first and a cash back card second. It offers 11 different types of insurances with 4 of them being best in class along with great perks like a 40,000 point sign up bonus (worth $300 in cash or $400 in travel), concierge service, and it is one of the few cards that offers price protection on your purchases. It also comes with the priciest annual fee at $150. You can also redeem your cash any time as a statement credit, not just once per year.
Which One Will You Choose?
I'm wondering which of these cards you'd pick? If you have a cash back card already, would you consider upgrading to one of those listed above?
Finally, always remember that letting credit cards with rewards entice you into much higher spending and debt is NEVER worth it. Please only apply for these cards if you plan to pay them off in full every month.