Canadian cash back credit cards with no annual fee have been struggling in recent years. Many of the better ones have had their rewards slashed and the features downgraded...
That's why when Tangerine launched their new credit card in 2016, people were tripping over themselves to apply for it. No other card was giving unlimited 2% cash back on bonus categories at all anymore, let alone categories you could choose and change yourself. Back then, spending outside your bonus categories would still net you a pretty decent 1% cash back as well.
It was an amazing deal and, as it turns out, a little too good to stay true.
Exactly 13 months after its initial launch, Tangerine has dropped the 1% cash back rate on non-bonus spending to 0.5%. That's a major reduction in rewards. They've also increased their great 1.5% foreign currency exchange rate to the usual 2.5%, and increased some balance transfer and other fees on top of that.
The real question here is: is the Tangerine Money-Back Credit Card still good?
The short answer - Yes.
The flexible unlimited 2% cash back categories still exist as they were, and that by itself makes the card worth having. You just now have to get creative with how you use it and combine it with another card to maximize your rewards. Check out the How To Maximize Your Rewards section below for more on that.
That said, the card will be dropping from the #1 spot in our no fee cash back credit card rankings all the way down to the #7 spot.
|Min. income||No set minimum|
|Reward type||Cash Back|
|Reward||0.5% unlimited cash back on regular purchases
2% unlimited cash back on up to 3 bonus categories you choose
|HTS reward return||1.1% of spending for a typical person|
- 2% cash back on 2 bonus spending categories of your choosing - the only card on the market to offer this.
- 3rd bonus category if you choose to deposit your money back into a Tangerine savings account.
- You can switch your bonus categories once every 90 days in case your spending habits change.
- Automatic monthly cash back redemption as a statement credit or deposit into your Tangerine Savings Account.
- No caps or limits to the amount of cash back you can earn.
- No annual fee for both primary and secondary cardholders.
- 0.5% cash back on regular purchases is lower than many other cash back credit cards.
- Poor insurance package when compared to other top no-fee cards.
- No sign up bonus like some other top cards have.
- Extended warranty - up to one year.
- Purchase protection - 90 days.
How The Bonus Categories Work
There are currently 10 bonus spending categories that you can choose from right away when you apply. Then later, you can change your categories as often as you want, but changes will only come into effect after 3 billing cycles of having used the previously selected categories. This is to prevent people from constantly adjusting their categories moment to moment as they're making purchases.
Here's what's currently available:
- Drug Store
- Recurring Bills
- Home Improvement
- Public Transportation and Parking
You automatically get 2 bonus spending categories when you sign up for the card and choose to get your money back as a monthly statement credit to your credit card account. But, if you opt to deposit it into a Tangerine Savings Account instead, you'll permanently get a 3rd bonus category.
How To Maximize Your Rewards
Use A Second Top Card For Everyday Spending
With the regular spending rate dropping to 0.5%, the first thing you should do is only use your Tangerine card when shopping at stores that give you the increased 2% bonus cash back rate.
What do you do for the rest of your purchases?
I suggest applying for The SimplyCash Card from American Experss. It's another no-fee cash back credit card that gives you 1.25% cash back on ALL your purchases. Not only that, but you get an increased 5% cash back on gas and grocery purchases for the first 6 months.
Get Your 3rd Bonus Spending Category
The next thing you're going to want to do is make sure you have a Tangerine savings account so you can get that 3rd bonus category.
Tangerine offers no-fee banking with easy electronic transfers to all other Canadian banks via online banking. You can even email money for free using their own email money transfer solution so you don't have to worry about getting your money in and out. It all works seamlessly with your current bank - I know because I'm a Tangerine client myself but use another bank for my primary chequing. Even if you don't use the account for anything else but securing the 3rd bonus category, it's still worth it.
Right now, you can get a ton of extra bonuses like 2.4% interest for 6 months, a $75 bonus for opening a chequing account, and an extra $50 bonus for using my Orange Key (you'll only get $25 if you use theirs). That's $125 in bonuses just for opening free accounts.
Open A Tangerine Account: Click Here
Use This Orange Key: 41502230S1
Choose Your Bonus Spending Categories Wisely
After that, you need to figure out where you spend your money so you can decide which 2% bonus categories to select to maximize your cash. The FREE Monthly Budget Planner I offer to everyone who joins my money saving tips newsletter can help you do this. Be sure to check back every now and then to see if your spending habits change so you can adjust your categories.
Maximize Your Bonuses
Finally, be sure to maximize your 2% bonus spending.
One way to do this is to choose Grocery as one of your categories and then go to a grocery store that has a gift card mall where you can buy gift cards to your favourite stores and restaurants. Stock up on gift cards for stores where you regularly shop anyway and the increased 2% rate still applies.
That means you are effectively earning 2% on all those future purchases made with your gift cards that would normally only qualify for the 0.5% rate. Just make sure you only buy what you will spend money on anyway and that you don't lose your gift cards.
Wrapping It Up
It's sad to see this innovative new card lose some of great benefits so early in its life, but the good news is there is still lots left to love. As long as they stop the changes here, I still think this is a card many Canadians should consider having in their wallets.
You may have to jump through a few more hoops now to maximize your rewards by combining it with the SimplyCash card - but the good news is that you will actually be earning more cash than before if you take the time to do just that.