It's pretty much universal - everyone hates fees!
I go out of my way to avoid fees whenever possible. For instance, I haven't paid any bank fees for nearly my entire life. I hopped right from a free student account into a no-fee President's Choice Financial account and haven't looked back.
But, there are actually some times when it makes sense to pay a fee.
As you can see from my all-inclusive cash back credit card rankings, most of the top ranked cards have an annual cost. The light bulb moment happens when you do the math and realize that any money you pay in fees quickly gets refunded to you and more through increased cash back earnings. As long as you funnel all your spending through your credit card and pay it off every month, you can earn at least 50% more than a no fee card will net you.
That said, there are still many people who still want to completely avoid fees. Fees suck and you may even be worried that paying the fee will pressure you to overspend. If so, then the following list of top no fee cash back cards is just the thing for you.
Canadian No Fee Cash Back Credit Card Rankings for 2016
29 no fee 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||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||President's Choice Financial World MasterCard|
|Apply||Capital One Aspire Cash Platinum MasterCard|
|Apply||Canadian Tire Cash Advantage MasterCard|
|Apply||Collabria Cash Back MasterCard|
|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
The card just launched with a bang in March 2016 and has brought a breath of fresh air to cash back credit cards. What's different? It allows YOU to choose which spending categories earn you bonus cash instead of being forced into the standard gas and groceries.
You get up to 3 bonus categories that you choose when you apply for the card and then you can switch them using their online interface roughly once every three months if your spending habits change. This is a fantastic card to combine with another cash back card to maximize your rewards. For example, you could apply for both this card and the SimplyCash to get 2% on your three highest spending categories and 1.25% on all your other purchases.
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.
- Low 1.5% foreign currency transaction fee - most other cards charge 2.5%.
- 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.
You can read my full Simply Cash review here.
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) MBNA Rewards MasterCard
The MBNA Rewards MasterCard is a straight 1% cash back credit card with a few important differences: There are no caps, tiers, or limits on the amount of cash back you can earn. It has much more free insurance coverage than no fee credit cards usually have. And, it is extremely flexible in how you can redeem your rewards for cash with none of the usual restrictions.
If you want a really simple and flexible rewards program on a card that can potentially save you much more when you take advantage of the included insurance, then this is the right choice for you.
Why You Want It:
- 1 point per dollar spent which equals 1% cash back on spending.
- Redeem your points any time you want online or by phone.
- Redeem your points any way you want:
- cheque, bank deposit, statement credit, travel, merchandise, and charity.
- 90 days purchase protection & 1 year extended warranty.
- 1 Million in travel accident insurance.
- Car rental theft and damage coverage.
- Additional car rental accident and personal effects coverage.
What Matters To You?
My rankings, although fair and balanced, might not take into account your unique situation or what means the most to you. So, if one of the features listed below is of great importance to you, then consider applying for a card which has that strength.
Getting The Most Money
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%. When Amex isn't accepted, you simply fall back to your MasterCard as a backup.
That way you'll earn 2% cash back on a full five categories while getting an increased 1.25% cash on the rest of your purchases. If that's too much for you, I'd just stick with the Tangerine card because it gives you the most flexibility and up to 3 bonus spending categories instead of 2.
Where You Spend Your Money
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.
Lower Minimum Income Needed
Many no 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 Perks And Insurance
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?
Fee or No 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, 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.