The Scotia Momentum Visa Infinite has been one of the best cash back credit card available to Canadians for the past couple of years after the MBNA Smart Cash was slightly devalued, but there were two big things stopping many Canadians, including myself, from applying for one.
- The $99 annual fee.
- No sign up bonus for applying, so why switch?
Starting in 2014 Scotiabank has been having regular promotions that really make applying for this card worthwhile. At first it was the annual fee waived for the first year and a $100 gift card if you applied through RateSupermarket. The current 2017 offer is also worth a look:
- Increased 5% cash back on the first $3,000 in purchases on the card - worth up to $150.
To get the latest deal, use the link below.
Why It's One Of The Best Cash Back Cards In Canada
It's all in the numbers. This card from Scotia offers 4% cash back on gas and groceries and gives you 2% cash back on drug store purchases and recurring bills. Then you earn 1% cash back on all other purchases with no spending caps or limits on that 1% at all. There are no tiers or other nonsense to deal with either.
This card is the only card that I know of to offer any sort of bonus for recurring bill payments like phone bills, utility bills, insurance, gym membership, subscriptions, etc. Essentially anything that is charged to your card on a monthly basis. This is a huge perk that no other card can compete with.
The only minor downside to the card that I can think of is there is a very reasonable spending cap of $25,000 on both the 4% and 2% bonus categories for a combined total of $50,000 in spending across those two categories. I don't know many people who spend $25,000 on gas and groceries and another $25,000 on drug store and recurring bill payments. If you do, you're definitely not an average Canadian!
Scotia Momentum Visa Infinite vs. MBNA Smart Cash MasterCard
One of its competitors is the MBNA Smart Cash World MasterCard that offers 2% cash back on gas and groceries and 1% cash back on all other purchases after the initial 5% bonus on gas and groceries for 6 months has expired (this is the Smart Cash sign up bonus). However, the big drawback with MBNA is that there is now a $400 per month spending cap on the gas and groceries bonus equating to only $4800 in spending that qualifies for the 2% bonus per year, which is pretty low. There's also a $1250 monthly spending cap on regular purchases that don't qualify for a bonus.
So not only do you earn twice as much with the Momentum Visa at 4%, you can earn the full 4% on up to $25,000 in spending instead of $4800. Quite a difference. Even without the $99 annual fee being waived for the first year, it still usually makes more financial sense for most people to choose the Momentum over the Smart Cash.
Example Of The Cash Back Potential
When I do credit card comparisons, I like to run examples that involve $25,000 in annual spending applied to the card. The reason I choose this number is because I feel that it is a number that most middle income families in Canada can easily achieve if they funnel all their purchases and expenses through the card. It isn't that hard when you use one primary credit card for everything you buy.
The other parameters I usually apply are 30% of the annual spending allocated to the gas and grocery bonus category and, for this card, I'm going to say that 20% of the spending would go towards recurring bills and drug store purchases. Those percentages could in reality be even higher, but I think they are fair enough estimates to give a decent picture of cash back earning potential.
|Spending Category||Annual spending||Momentum Visa Cash Back||Smart Cash MasterCard Cash Back|
|Gas & Groceries||$7500||$300||$123 (over cap)|
|Drugstore & Recurring Bills||$5000||$100||$50|
|Other Purchases||$12,500||$125||$73 (over cap)|
So you can see the Momentum is the clear winner with $279 more cash back earned every year . Even if you account for the $99 annual fee from year 2 onward you're still $180 ahead each year. Also, $7500 isn't actually that much in terms of gas and groceries. It equates to about $310 per month if it is split evenly across both gas and groceries. Many families would spend much more than that in both categories, so the cash back numbers get significantly better for the Momentum Visa if that is the case.
The Best Card For Gas & Groceries
The bottom line is that this is the best card out there if you make a lot of gas and grocery purchases. If your job or day to day life involves driving, then it's a no-brainer. If you've got a large family or buy a lot of food, then it's an equally good choice. The current bonus 5% cash back offer is just a nice bit of extra icing on the cake!