Canadian banks love to gouge us with fees - even raising them while raking in record profits for themselves...
It's no wonder pretty much everyone hates fees!
I'm right there with you, I normally go out of my way to avoid fees too. I've been taking advantage of no-fee virtual banking basically since it began in Canada. I hopped right from a free student account into a no-fee President's Choice Financial account and have stuck with it ever since.
But, there are actually some times when it makes sense to pay a fee.
When dealing with cash back credit cards, simple math can show you if higher cash back rewards will cover the cost of a premium card's annual fee. If so, then it's absolutely worth it to pay the fee. Not only will you end up with more money in your jeans, but you'll also benefit from better insurance coverage and perks.
Even still, there are many people who want to completely avoid fees out of principal. Fees suck and you may even be worried that paying the fee will pressure you to overspend. If that's you, then this no fee cash back card analysis is just what you need.
Best Cash Back Credit Cards With No Annual Fee
To produce these rankings, 31 cash back credit cards with NO annual fee were compared. I've listed the top 10 in the table below from highest to lowest ranked.
Cards that aren't strictly cash back cards have also been included to increase your options. These cards allow you to convert your points to cash, statement credits, or investments in some way.
The table scrolls horizontally using the slider at the bottom.
|Apply||Tangerine Money-Back Credit Card|
|Apply||SimplyCash Card from American Express|
|Apply||HSBC Premier World MasterCard|
|Apply||MBNA Rewards MasterCard|
|Apply||President's Choice Financial World Elite MasterCard|
|Apply||Capital One Platinum MasterCard (Costco)|
|Apply||HSBC Advance MasterCard|
|Apply||Capital One Aspire Cash Platinum MasterCard|
|Apply||HSBC Premier MasterCard|
|Apply||Chase Amazon.ca Rewards Visa|
|Overall Score||Cash On $25,000 Spend1||Cash On $100K Spend2||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.
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.
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) Tangerine Money-Back Credit Card
Warning: Tangerine is devaluing the rewards for this card on April 29th, 2017 for all cardholders. The 1% cash back rate is being reduced to 0.5% but the 2% bonus system is remaining unchanged. Read the full details here.
With the MBNA Smart Cash World MasterCard/Visa now grandfathered and closed to new applications, there is no viable competition left for the Tangerine Money-Back Credit Card.
Why is it so great? It allows YOU to choose which spending categories give you bonus cash. No more forced gas and grocery bonuses that just don't work for everyone.
You choose your initial bonus categories (up to 3) when you apply for the card. Then, you can switch them up using your online banking account every 3 months if you discover your spending has changed and you could be earning more by choosing another bonus category.
This is a fantastic card to combine with another cash back card to maximize your rewards. For instance, you could get both the Tangerine card and the Amex SimplyCash to get 2% on your three top spending categories and 1.25% on everything else instead of the usual 1%.
Why You Want It:
- 2% bonus cash on up to 3 spending categories that YOU choose.
- 1% cash back on all other purchases.
- No limits, tiers, or restrictions on how much cash you can earn.
- Switch up your bonus categories every 3 months if you change your mind.
- Your cash is redeemed monthly automatically as a statement credit or deposit into a Tangerine savings account.
2) Simply Cash Card from American Express
They call it Simply Cash for a reason - this card is dead simple. You get 1.25% flat cash back on ALL your purchases with no caps or limits. That's the highest earning rate on all purchases of any no fee card with no limits.
The other big draw to this card is the very nice 5% bonus you get on gas and grocery purchases for the first 6 months you have the card. You can earn a maximum of $250 with this bonus. Getting this card just for the bonus alone is worth it, especially if you've already used up your bonus with the Tangerine card.
Why You Want It:
- 1.25% cash back on ALL purchases - the highest of any no fee card.
- 5% bonus cash on gas and groceries for the first 6 months - with a high $250 cap.
- No limit to how much cash back you can earn at the regular rate.
- Free access to Front Of The Line that gives you access to advanced event and concert ticket sales exclusive to Amex cardholders.
- 1.99% introductory interest rate on balance transfers for the first 6 months (limited time).
3) HSBC Premier World MasterCard
The HSBC Premier World MasterCard is a really good cash back credit card that I don't talk about very much for one simple reason: to qualify for one you must also have one or more active HBC accounts with more than $100,000 worth of assets under management.
Even though many people do have $100,000 in assets, plenty of those people want to hold their investments, mortgages, and savings accounts at other financial institutions. That makes qualifying for this card quite difficult. If you're open to doing your everyday banking with HSBC though, it's a good choice.
The good news is it has a higher cash back payout than most other cards with no annual fee. You get 1.5% on gas, groceries, and drugstores with no limits and 1% on everything else. It also has a rare 2% bonus on foreign currency purchases which makes it perfect for world travellers or business owners than make frequent purchases in different currencies.
Why You Want It:
- 2% bonus cash on all purchases in a foreign currency.
- 1.5% bonus cash on gas, grocery, and drugstore purchases.
- 1% cash back on all other purchases.
- Amazing insurance coverage for a no-fee cash back credit card:
- 1 Million travel accident.
- 17 days emergency medical.
- $2,000 trip cancellation & interruption.
- $750 lost or delayed baggage & personal effects.
- Rental car theft, damage, accident, and personal effects.
- 1 year extended warranty + 90 day purchase protection.
What's Important To You?
Ranking cards by their features is all well and good, but you might have specific needs when it comes to your credit card. I've broken down the top cards by popular features to help you choose the one that is the best fit for you.
Maximizing Your Cash
The best way to get the most money with no fee cash back cards is to split your spending across multiple cards. I recommend using the Tangerine Money-Back Credit Card for purchases in the 3 categories you spend the most like groceries, recurring bills, and gas to earn 2% on those purchases. Then, put the rest of your spending on the Simply Cash Card from American Express to earn 1.25% instead of the usual 1%.
With this strategy, you'll earn 2% cash back on your top 3 spending categories while getting an increased 1.25% cash on the rest of your purchases. When Amex isn't accepted, you can simply fall back to your MasterCard as a backup.
Very Specific Spending Habits
Again, the Tangerine Money-Back Credit should be your go-to card if you spend a lot at certain stores or certain things. Even if spending habits change, you can change your increased bonus cash categories every three months to account for that.
Low Income Requirements
Many no annual fee cards have low income requirements to qualify. If you avoid World editions and the HSBC cards that require you to have a minimum of $100,000 in assets at HSBC, then you're all set. The best choices are the Tangerine Money-Back Credit Card (no set minimum) and the SimplyCash from American Express ($15,000 minimum).
Get Paid When And How You Want
If you want flexibility, then any card from MBNA can't be beat!
They allow you to redeem your cash any way you want. You have the following options: statement credit, direct deposit, cheque, charity donation, travel redemption, gift cards, merchandise, and more. You can also redeem as often as you want for as much as you want. There is a $50 minimum, but you'll get there in no time.
Many of the other cards only allow you to redeem as a statement credit once per year in a specific month. Nothing like holding your cash hostage and then having it disappear amongst your regular purchases, eh?
Great Insurance And Perks
The HSBC Premier World MasterCard has the best insurance package by far. That pesky requirement of having $100,000 of assets under management by HSBC to qualify keeps being a major problem though.
The top alternative is the MBNA Rewards MasterCard which has a total of 7 types of free insurance included.
Why not get no-fee banking to go with your no-fee credit card?
To Fee Or Not To Fee?
What do you think about paying fees for a credit card? Are you willing to spend money to make money in this area? Why or why not?
Finally, please remember that letting credit cards entice you into debt with rewards is NEVER worth it. Credit card rewards are only worth it if you plan to pay off your card in full every month to avoid debt and interest charges.