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The majority of Canadians (85%) say their primary credit card offers some type of reward, according to the 2023 Canadian Payment Methods and Trends Report from Payments Canada[1]. Plus, more than half of credit card users listed rewards as their main reason for using a credit card frequently.
Compare our picks for the best rewards credit cards in Canada, offering travel rewards, cash back, gift cards and more so that you can find the optimal card for your goals and spending habits.
COMPARE THE BEST REWARDS CREDIT CARDS IN CANADA
Use our filter to narrow down your credit card options by the features you care about most.
You won’t need a strategy to make the most out of this bonus-category card. The BMO CashBack® World Elite®* Mastercard®* spends like a flat-rate card thanks to stellar rates on four popular daily spending categories.
Pros
- Score generous cash-back rates for popular spending categories: 5% on groceries, 4% on transit, 3% on gas, 2% on recurring bills, and 1% on everything else.
- Feel protected with 13 types of insurance and fantastic travel benefits.
Cons
- Spending categories come with easily-hit spending caps, but the 1% base rate still earns you value once you hit your monthly bonus rate limits.
- The $120 annual fee is pretty steep. While we think you’ll more than make up for it through cash back savings, the no-fee BMO CashBack® Mastercard®* is a great alternative.
- Welcome offer: Get up to 10% cash back in your first 3 months and the $120 annual fee waived in the first year.*
- Earn more cash back on the categories that mean the most: 5% on groceries.* 4% on transit including ride sharing, taxis and public transportation.* 3% on gas and electric vehicle charging.* 2% on recurring bill payments like your monthly phone bill or favourite streaming service.* 1% unlimited cashback on all other purchases.*
- Get the highest cash back earn rate on groceries in Canada.†
- Get valuable benefits and offers for digital everyday services from a variety of on-demand apps and subscription services.
- Extended Warranty Plus.*
- Purchase Protection Plus.*
- Complimentary membership in Mastercard Airport Experiences provided by LoungeKey.*
- Access over 1 million Wi-Fi hotspots around the world – all at no added cost, and no added fees or roaming charges.*
- Complimentary Roadside Assistance Program.*
- BMO CashBack World Elite Travel and Medical Protection.*
- BMO Concierge Service.*
- Unlock Mastercard Travel Rewards cashback offers when you travel and shop outside of Canada.
- *Terms and conditions apply.
- †Statement based on a comparison of the non-promotional grocery rewards earn rate on Canadian cash back credit cards as of January 4, 2023.
- BMO is not responsible for maintaining the content on this site. Please click on the Apply now link for the most up to date information.
Get rewarded at the gas station and grocery store with 4% cash back, plus enjoy a high ongoing flat-rate of 2% cash back on everything else.
Pros
- The unlimited 2% cash-back earn rate is among the highest we evaluated.
- You can earn up to $400 in the first ten months.
Cons
- The bonus rewards rate on gas and groceries drops down to 2% after a $30,000 annual spend.
- In your first 10 months as a new SimplyCash® Preferred Card from American Express Cardmember, you can earn a $40 statement credit for each monthly billing period in which you spend $750 in purchases on your Card. This could add up to $400 in statement credits in the first 10 months.
- Earn accelerated earn rates on eligible gas and grocery purchases.
- Earn 4% cash back on eligible gas station purchases in Canada, 4% cash back on eligible grocery store purchases in Canada (up to $1,200 cash back annually) and 2% cash back on all other purchases.
- Access events and special offers curated for Cardmembers with American Express® Experiences.
- Extensive insurance coverage and 24/7 Customer Service.
- American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information click the Apply now link. Conditions apply.
Pros
- A small $50 minimum deposit makes this card accessible to consumers of all budgets.
- Cashback rate of up to 4%.
Cons
- Interest rates could be as high as 29.99% for some users.
- Build credit history with on-time payments.
- Set your credit limit and get started with as little as $50.
- Guaranteed approval with no credit score needed to apply.
- 0.5% guaranteed monthly minimum cashback.
- Only $5 / Month
- Depending on your Required Everyday account balance, customers can earn cashback up to 4% on gas, 4% on groceries, and 1% on all other purchases (up to a yearly spend cap).
- Personalized Insights AI generates tailored information and recommendations designed specifically for you.
The BMO CashBack® Mastercard®* for Students has impressive earn rates — including 3% on groceries — and valuable perks, all without an annual fee.
Pros
- Earn flexible and easy-to-redeem cash rewards on everyday purchases.
- There’s no minimum threshold for redeeming your cash-back rewards. Redeem as little as $1 if you want.
Cons
- Accelerated earn rates for groceries and recurring bills are capped at $500 per billing cycle.
- Insurance is limited to extended warranty and purchase protection.
- Welcome offer: Get 5% cash back in your first 3 months.*
- Then get 3% cash back on grocery purchases, 1% cash back on recurring bill payments and 0.5% unlimited cash back on all other purchases!*
- Now earn the highest cash back on groceries in Canada without paying an annual fee!†
- Get cash back every time you spend, plus start building a healthy credit history.
- Want to get your cash back ASAP? Now you can redeem your cash back anytime through direct deposit, as a credit on your statement or into your BMO InvestorLine account.*
- No Annual fee.*
- Extended Warranty.*
- Purchase Protection.*
- Receive a discount on car rentals.*
- *Terms and conditions apply.
- †Statement based on a comparison of the non-promotional grocery rewards earn rate on Canadian cash back credit cards as of January 4, 2023.
- BMO is not responsible for maintaining the content on this site. Please click on the Apply now link for the most up to date information.
Earn up to $1,000 in cash back on grocery shopping and recurring bill payments with a 4% rewards rate in both categories.
Pros
- It’s rare for a credit card to offer 4% cash back on two major spending categories. It’s even rarer to set a $25,000 annual limit to that 4% — a $1,000 value — before reverting to the healthy 1% base rate.
- You can waive the $120 annual fee every single year by using the Scotiabank Ultimate Package.
Cons
- The cash back earned is hands-off. You have to wait until November, and then it’s only redeemable as a statement credit. If you have a Scotiabank account, that annual payout can be deposited into your bank account.
- The 4% rate won’t mean much to you if you don’t buy a lot of groceries or often buy your food at somewhere that Visa doesn’t classify as a grocery store or supermarket, such as Canadian Tire, FreshCo, London Drugs, Walmart and No Frills.
- SPECIAL OFFER: Earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). No annual fee in the first year, including on supplementary cards. Offer ends October 31, 2024.
- Earn 4% for every $1 you spend on grocery store purchases, recurring bill payments, and subscription purchases.
- Earn 2% for every $1 you spend on gas purchases and daily transit purchases.
- Earn 1% cash back on all other purchases with no cash back limit.
- Redeem cash back as a statement credit in November.
- Visa Infinite benefits, including Visa Infinite* Concierge, Visa Infinite* Luxury Hotel Collection, Visa Infinite* Dining Series, and entertainment and lifestyle offers.
- Save up to 25% off base rates at participating AVIS locations and at participating Budget locations in Canada and the U.S.
- Access to Scotia SelectPay™.
- To be eligible, $60,000 (individual) or $100,000 (household) annual income is required, or $250,000 minimum assets under management. Also, you must have a Canadian credit file and be a Canadian resident that is the age of majority in the province or territory where you live.
- Terms and Conditions Apply. Click ‘Apply Now’ for complete details.
With a large welcome bonus and accelerated earn rate on travel booked through ExpediaForTD.com, the TD First Class Travel® Visa Infinite* Card is perfect for travellers aiming to score free flights and hotel visits.
Pros
- A generous welcome bonus worth up to $700 in value.
- Travel expenses eligible for redemption include more than just hotel stays and flights – baggage fees, airport parking, car rentals, cruises, travel attractions, entertainment and more are all fair game.
Cons
- This card doesn’t have as many travel perks as others on the list, but you can quickly earn free flights and hotel stays.
- No free airport lounge access — you only receive an annual discount on a Priority Pass lounge membership.
- Earn up to $1,000 in value†, including up to 135,000 TD Rewards Points† and no Annual Fee for the first year†. Conditions Apply. Account must be approved by January 6, 2025.
- Earn a welcome Bonus of 20,000 TD Rewards Points when you make your first Purchase with your Card†.
- Earn 115,000 TD Rewards Points when you spend $5,000 within 180 days of Account opening†.
- Earn a Birthday Bonus of 10% of the TD Rewards Points you have earned over the past year, up to a maximum of 10,000 TD Rewards points†.
- To receive the first-year annual fee rebate, you must activate your Card and make your first Purchase on the Account within the first 3 months after Account opening and you must add your Additional Cardholders by January 6, 2025.
- Earn 8 TD Rewards Points† for every $1 you spend when you book travel through Expedia® For TD†.
- Earn 6 TD Rewards Points† for every $1 you spend on Groceries and Restaurants†.
- Earn 4 TD Rewards Points† for every $1 you spend on regularly recurring bill payments set up on your Account†.
- Earn 2 TD Rewards Points For every $1 you spend on other Purchases made using your Card† plus earn an annual Birthday Bonus† of up to 10,000 TD Rewards Points.
- No travel blackouts†, no seat restrictions† and no expiry† for your TD Rewards Points as long as your account is open and in good standing.
- Each year, you will receive one $100.00 TD Travel Credit on your first Eligible Travel Credit Purchase of $500.00 or more made with Expedia For TD and posted to the Account in a calendar year.
- Interest Rates: 20.99% on purchases and 22.99% on cash advances.
- Go Places on Points: Your Points are worth more when you redeem through Expedia® For TD: Search over a million flights, hotels, packages and more! When you’re ready to book, you can redeem† your TD Rewards Points towards your travel purchase right away.
- Redeem your TD Rewards Points towards making purchases at Amazon.ca with Amazon Shop with Points. Conditions apply.
- Travel Medical Insurance†: Up to $2 million of coverage for the first 21 days. If you or your spouse is aged 65 or older, you are covered for the first 4 days of your trip. Additional top-up coverage is available.
- To be eligible, $60,000 (individual) or $100,000 (household) annual income is required. Also, you must have a Canadian credit file and be a Canadian resident of the age of majority in the province or territory where you live.
- †Terms and conditions apply.
- This offer is not available for residents of Quebec.
- The Toronto-Dominion Bank (TD) is not responsible for the contents of this site including any editorials or reviews that may appear on this site. For complete and current information on any TD product, please click the Apply Now button.
This card offers a competitive sign-up bonus and accelerated earn rates on useful categories like restaurant and grocery purchases and household utility bills.
Pros
- An impressive array of perks and insurance benefits for travellers, such as concierge services and rental car discounts.
- Flexible redemption options, including cash back, brand-name merchandise, gift cards, charitable donations and travel.
Cons
- Intro offer does not include a waived annual fee.
- The 5x bonus rewards rate on restaurants, groceries, digital media, memberships and utility drops down to a 1x flat rate after you spend $50,000.
- 20,000 bonus points†† (approximately $165 in cash back value) after you make $2,000 or more in eligible purchases within the first 90 days of your account opening.
- 10,000 bonus points††(approximately $80 in cash back value) once enrolled for paperless e-statements within the first 90 days of account opening.
- Earn 5 points‡ for every $1 spent on eligible restaurant, grocery, digital media, membership, and household utility purchases until $50,000 is spent annually in the applicable category. 1 point‡ for every $1 on all other eligible purchases.
- Each year, you will receive Birthday Bonus Points‡ equal to 10% of the total number of Points the Account earned in the 12 months before the month of your birthday, to a maximum Birthday Bonus each year of 15,000 Points.
- Redeem points‡ for cash back, brand-name merchandise, gift cards from participating retailers, charitable donations, and travel.
- Standard Annual Interest Rates of 19.99% on purchases, 22.99% on balance transfers✪, and 24.99% on cash advances.
- Mobile Device Insurance*** With Mobile Device Insurance, you’ve got up to $1,000 in coverage for eligible mobile devices in the event of loss, theft, accidental damage or mechanical breakdown.
- $120 annual fee. $50 Additional Card Annual Fee for one authorized user (if you have one).
- To qualify, your personal annual income must be greater than $80,000, or your household annual income must be $150,000 or greater††††.
- ††, ‡, ✪, ***, ††††, Terms and Conditions apply.
- This offer is not available for residents of Quebec.
- Sponsored advertising. MBNA is a division of The Toronto-Dominion Bank (TD) and TD is not responsible for the contents of this site including any editorials or reviews that may appear on this site. For complete information on this MBNA credit card, please click on the “Apply Now” button.
You can earn unlimited cash back at a 2% rate in up to three categories of your choice and 0.50% back on other everyday purchases while benefiting from exclusive Tangerine World Mastercard® perks and insurance cover.
Pros
- Choose the best 2% rewards categories for you based on your spending.
- A variety of additional perks like savings on subscription services, rental car collision/loss damage, mobile device insurance, and more.
Cons
- Higher eligibility requirement for gross income.
- Apply for a Tangerine World Mastercard® by October 31, 2024 and earn an extra 10% back* (up to $100) when you spend up to $1,000 in everyday purchases within your first 2 months.
- Earn 2% Money-Back Rewards on purchases in two 2% Money-Back Categories of your choice, and 0.50% Money-Back Rewards on all other purchases.
- Have your Money-Back Rewards deposited into a Tangerine Savings Account, and get a 3rd 2% Money-Back Category.
- No limit on the amount of Money-Back Rewards you can earn.
- Change your 2% Money-Back Categories to suit your spending.
- With Mastercard Travel Rewards, you can unlock cashback offers and get a rebate applied directly to your statement, by using your Tangerine World Mastercard at select merchants that accept Mastercard while travelling outside of Canada.
- Save on the things you love with your Tangerine World Mastercard. Enjoy special benefits and offers from a growing lineup of on-demand apps and subscription services made available to you as a Tangerine World Mastercard cardholder.
- Make the most of your travel with Mastercard® Travel Pass Provided by DragonPass. Your complimentary membership gives you exclusive dining, retail and spa offers in over 650 airports worldwide, along with access to over 1,300 airport lounges at $32 USD per visit. Learn more at Mastercard® Travel Pass.
- Rental Car Collision/Loss Damage Insurance**: Damage and theft protection for your car rental when you rent for up to 31 consecutive days and charge the full cost of your rental to your Card.
- Mobile Device Insurance**: Protection on new cell phones, smartphones or tablets when you charge the full cost to your Card, or when you purchase it through a plan and charge all of your wireless bill payments to your Card. Covers up to $1,000 if your mobile device is lost, stolen, accidentally damaged or experiences mechanical failure.
- Preferred rates: 19.95% for purchases and cash advances.
- To be eligible, a $50,000 (individual) annual income is required. Also, you must have a Canadian credit file and be a Canadian resident of the age of majority in the province or territory where you live.
With airport perks, travel benefits, 24/7 concierge access, and an impressive standard earn rate — 1 AIR MILE for every $12 spent — the BMO AIR MILES®† World Elite®* Mastercard®* offers frequent flyers a luxury travel experience at a great value.
Pros
- Airport lounge access with a complimentary membership in Mastercard Travel Pass provided by DragonPass.
- Strong insurance policy, including up to $2 million in out-of-province/out-of-country emergency medical insurance.
Cons
- This card doesn’t offer accelerated earn rates on certain spending categories.
- Limited time offer: Get 3,000 AIR MILES Bonus Miles!* That’s enough for $310 towards purchases with AIR MILES Cash!* Plus, get the $120 annual fee waived for your first anniversary.
- Earn over 10x faster than other AIR MILES collectors: Get 3x the Miles for every $12 spent at participating AIR MILES Partners and 2x the Miles for every $12 spent at any eligible grocery store*.
- 2x the Miles for every $12 spent at any eligible wholesale clubs, membership-based retailers and alcohol retailers.*
- Plus, 1 Mile for every $12 that you spend with your credit card everywhere else.*
- Plus, you now have the flexibility to move your Miles between Cash and Dream with our new Transfer Miles feature, so if you want to turn your Cash Miles into a dream vacation, go for it!
- Enjoy a 7¢/L discount on Shell V-Power®± premium fuel and 2¢/L on all other Shell fuel every time you fuel up!
- Complimentary membership in Mastercard Travel Pass provided by DragonPass.*
- Use less Miles with our exclusive 25% discount on one worldwide AIR MILES flight redemption during the calendar year.*
- BMO AIR MILES World Elite Travel and Medical Protection.*
- Unlock Mastercard Travel Rewards cashback offers when you travel and shop outside of Canada.
- *Terms and conditions apply.
- BMO is not responsible for maintaining the content on this site. Please click on the Apply now link for the most up to date information.
The BMO CashBack® Mastercard®* offers attractive earn rates on everyday purchases like groceries and utility bills, making it easy to quickly rack up rewards that you can turn into cold hard cash.
Pros
- Attractive introductory offer, especially if you’re interested in a balance transfer.
- No minimum threshold for redeeming your cash-back rewards. Redeem as little as $1 if you want.
Cons
- Accelerated earn rates for groceries and recurring bills are capped at $500 per billing cycle, a ceiling that might be easy to hit if you have a family or higher monthly balances.
- Offers fewer travel perks and types of insurance than some other cards.
- Welcome offer: Get 5% cash back in your first 3 months.*
- Then get 3% cash back on grocery purchases, 1% cash back on recurring bill payments and 0.5% unlimited cash back on all other purchases!*
- Now earn the highest cash back on groceries in Canada without paying an annual fee!†
- Get a 0.99% introductory interest rate on Balance Transfers for 9 months, 2% fee applies to balance amounts transferred.*
- No Annual fee.*
- Want to get your cash back ASAP? Now you can redeem your cash back anytime through direct deposit, as a credit on your statement or into your BMO InvestorLine account.*
- Extended Warranty.*
- Purchase Protection.*
- Receive a discount on car rentals.*
- *Terms and conditions apply.
- †Statement based on a comparison of the non-promotional grocery rewards earn rate on Canadian cash back credit cards as of January 4, 2023.
- BMO is not responsible for maintaining the content on this site. Please click on the Apply now link for the most up to date information.
If this card doesn’t seem like a good fit for your wallet, take a look at NerdWallet’s selection of the best newcomer credit cards to help find the right option for you.
Comprehensive travel insurance, Air Canada benefits, impressive earn rates and unlimited rewards make the American Express Aeroplan Reserve Card a strong choice for frequent travellers.
Pros
- Strong earn rates with unlimited rewards.
- Air Canada airport benefits, like Maple Leaf Lounge access, a free checked bag, Priority Airport Check-In, Priority Boarding for you and up to eight travel companions.
Cons
- A high $599 annual fee.
- The highest earn rate only applies to Air Canada travel purchases, so this card might not be a good fit if you prefer another airline.
- New American Express® Aeroplan®* Reserve Cardmembers can earn up to 85,000 Aeroplan points.
- Earn 60,000 Aeroplan points after spending $7,500 in purchases on your Card within the first 3 months.
- Plus, earn an additional 25,000 Aeroplan points when you spend $2,500 in purchases in month 13.
- That’s up to $2,600 or more in value when you combine your welcome bonus points and card benefits.
- New Offer: Cardmembers can now get an extra night free for every 3 consecutive hotel nights redeemed with Aeroplan points. Offer ends December 31, 2024.
- Highest Air Canada earn rate on an Aeroplan payment card in Canada: Earn 3X the points on eligible purchases made directly with Air Canada®* and Air Canada Vacations®*.
- Standard Earn Rate: Earn 2X the points on eligible Dining and Food Delivery purchases in Canada and earn 1.25X the points on everything else.
- Get through the airport quicker with Air Canada Priority Check-In, Air Canada Priority Boarding and Air Canada Priority Baggage Handling.
- Enjoy access to select Air Canada Maple Leaf Lounges™* and Air Canada Café™ in North America for you and a guest, with a same day ticket on a departing Air Canada or Star Alliance flight.
- Enjoy your eligible first checked bag free for up to 9 people travelling on the same reservation on Air Canada flights.
- Roll over any unallocated Aeroplan Elite™* Status Qualifying Miles and unused eUpgrade Credits to the following year to enjoy during your travels.
- Get access to more than 1,200 Priority Pass™ airport lounges and enjoy an oasis of comfort before your flight, regardless of your airline or cabin class.
- Insurance Coverage: whether you’re shopping nearby or travelling abroad, you can feel confident knowing you can be taken care of.
- American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information click the Apply now link. If you apply and get approved for an American Express Card, NerdWallet may receive compensation from American Express, which can be in the form of monetary payment.
The Neo Money™ Card is a no-fee prepaid Mastercard linked to the online bank’s popular high interest savings account. Earn 0.1% interest on your funds in the Neo Money account and enjoy up to 3% cashback on spending (up to a yearly spend cap).
Pros
- Build your savings with competitive interest on funds held in the Neo Money account.
- Free Interac e-Transfers, bill payments and mobile bank-to-bank transfers.
- Earn up to 3% cashback on spending (up to a yearly spend cap).
Cons
- The cashback you receive will vary depending on where you shop.
- Get high interest on your savings and high cashback when you spend with your Neo Money™ card.
- Depending on your account balance, customers can earn cashback up to 3% on gas, 3% on groceries, and 1% on all other purchases (up to a yearly spend cap).
- Instant access to your balance with no card loading required.
- Free everyday transactions and no monthly fees.
- Withdraw from any ATM worldwide.
- 0.1% interest on every dollar.
- Enable the Auto-Save feature to set up automatic savings and register your email to instantly deposit Interac e-Transfer® requests in your Neo Everyday account.
- Take the pain out of bill pay by setting up automated payments from your Neo Everyday account.
You can earn some extremely attractive rates on gas and groceries with the CIBC Dividend Visa Infinite Card — up to a $3,200 cash-back value.
Pros
- Flexible and easy redemption. You can redeem cash back anytime through CIBC Online and Mobile Banking.
- Generous cash back rates on five popular spending categories.
Cons
- You’ll only earn 1% cash back after spending $80,000 across bonus categories. Most credit cards have specific limits for each category, but the CIBC Dividend Visa Infinite collectively caps all bonus rates with an $80,000 limit.
- Insurance offerings are limited compared to what you might expect from a card with a $120 annual fee. However, you can avoid this cost every single year with a CIBC Smart Plus™ Account.
- 4% on groceries, gas, and electric vehicle charging, and 2% on transportation, dining and recurring payments. Accelerated rates apply to the first $80,000 spent per year.
- 1% on everything else, and after spending $80,000.
- 0.25% cash back for every $1 spent on a CIBC Global Money Transfer, with no foreign transaction fees.
- Redeem a minimum of $25 cash back at any time through CIBC Online and Mobile Banking.
- $120 annual fee.
- Visa Infinite benefits, including Visa Infinite Concierge, Visa Infinite Luxury Hotel Collection, Visa Infinite Dining Series, and entertainment and lifestyle offers.
- Save up to 10 cents per litre at Chevron, Ultramar and Pioneer gas stations when you link your card with Journie Rewards.
- Access to CIBC Pace It.
- Five types of insurance provided, including 10-day out-of-province/out-of-country emergency medical benefits — up to $5 million in coverage.
- Preferred rates: 20.99% for purchases, 22.99% for cash advances.
- To be eligible, $60,000 (individual) or $100,000 (household) annual income is required. Also, you must have a Canadian credit file and be a Canadian resident of the age of majority in the province or territory where you live.
The $0-annual-fee Simplii Financial Cash Back Visa Card earns bonus cash-back on the purchases you make almost every day.
Pros
- Earn up to 4% cash back on eligible purchases in restaurants, bars and coffee shops.
- Get cash back on fee-free global money transfers.
Cons
- The 0.5% base rate isn’t exactly impressive, but it only applies after you hit the annual spending limits of bonus categories.
- It only includes purchase security and extended protection insurance.
- Sign up for a Simplii Financial Cash Back Visa* Card by October 31, 2024 and get a $100 Skip Digital Gift Card after you spend $100 with your new Simplii Cash Back Visa card by November 30, 2024†.
- Plus, for your first 4 months with a Simplii Financial Cash Back Visa* Card, enjoy 10% cash back on eligible restaurants, food delivery and bar purchases (Up to $500 spend†).
- Earn 4% on eligible restaurant, bar and coffee shop purchases up to $5,000 spend per year†.
- Earn 1.5% on eligible gas, groceries, drugstore purchases and pre-authorized payments, up to $15,000 per year†.
- Earn 0.5% on all other credit card purchases with no limit on how much you can earn†.
- For your first 4 months with a Simplii Financial Cash Back Visa* Card, enjoy 10% cash back on eligible restaurants, food delivery and bar purchases. Up to $500 spend †.
- Redeem cash back as a statement credit in December.†
- No annual fee.
- Cash back when you send money abroad with a Simplii Financial Global Money Transfer. No transaction fees and no interest charges.†
- Purchase security and extended protection insurance provided.†
- Interest rates: 20.99% for purchases‡, 22.99% for cash advances‡.
- To be eligible, a $15,000 (individual/household) annual income is required. Also, you must have a Canadian credit file and be a Canadian resident (excluding Quebec) that is the age of majority in the province or territory where you live.
- †Terms and conditions apply. Click ‘Apply Now’ for complete details. This offer is not available for residents of Quebec.
- ‡ “Purchase” means any Transaction other than a Cash Advance, Balance Transfer or Convenience Cheque. “Cash” means a Cash Advance, Balance Transfer and Convenience Cheque. Interest rates may change from time to time.
The TD Aeroplan Visa Business Card impresses with its obtainable welcome bonus, low interest rate and increased earn rate on essential business purchases.
Pros
- A 14.99% interest rate on purchases is unusual for a card packing this many benefits, including a healthy earn rate on business purchases like shipping and internet.
- Wide range of insurance provided.
- Travel perks include statement Credits For NEXUS Holders, free checked bags and Maple Leaf Lounge guest pass.
Cons
- Most travel perks require cardholders to hit spending thresholds before they can be claimed.
- Smaller businesses may not spend enough to score the full welcome bonus.
- Earn up to 60,000 Aeroplan pointsΓ. Conditions Apply. Account must be opened and approved by September 3, 2024.
- Earn 2 Aeroplan points for every dollar spent on eligible purchases made directly with Air Canada, including Air Canada Vacations.
- Earn 1.5 Aeroplan points for every dollar spent on eligible travel, dining and select business categories, such as shipping, internet, cable and phone services.
- Earn 1 Aeroplan point for every dollar spent on all other eligible purchases.
- Earn points twice when paying with a TD Aeroplan Visa Business Card and providing an Aeroplan number at over 150 Aeroplan partner brands and more than 170 online retailers via the Aeroplan eStore.
- Points can be redeemed for flights, hotels, merchandise, gift cards and more. They can also be used to pay down the card’s balance.
- Linked cards earn 50% more Aeroplan points and Stars at participating Starbucks stores.
- $149 annual fee — rebated in the first year.
- Free first checked bag for up to 9 people travelling on the same reservation on Air Canada flights.
- One free one-time guest pass to Maple Leaf Lounges for every $10,000 in net purchases. Maximum of 4 passes a year.
- Reach Aeroplan Elite Status more quickly by earning 1,000 Status Qualifying Miles and one Status Qualifying Segment for every $5,000 in net purchases.
- Access online reporting, review business expenses, managing existing credit limits and apply spend controls through the TD Card Management Tool.
- Visa SavingsEdge program: save up to 25% on eligible business purchases.
- Travel benefits: travel medical insurance (up to $2 million in coverage for the first 15 days for those under 65; coverage lasts for 4 days for those 65 and older); common carrier travel accident insurance (up to $500,000 for covered losses), trip cancellation insurance (up to $1,500 per insured person; maximum of $5,000), trip interruption insurance (up to $5,000 per insured person; maximum of $25,000), flight/trip delay insurance (up to $500 if a flight or trip is delayed for longer than 4 hours), delayed and lost baggage insurance (up to $1,000 of overall coverage per insured person), auto rental collision/loss damage insurance (covers the full cost of a car rental for up to 48 days), hotel/motel burglary insurance (up to $2,500), mobile device insurance (up to $1,000 in coverage).
- Toll-free emergency travel assistance services.
- Receive a rebate of up to $100 on NEXUS enrolment application/renewal fee costs once every 48 months.
- Save a minimum of 10% on the lowest available base rates in Canada and the U.S., and a minimum of 5% on the lowest base rates internationally on qualifying car rentals at participating Avis and Budget locations.
- Visa Zero Liability protection, Verified by Visa and instant alerts to prevent fraudulent card use.
- Purchase security and extended warranty protection.
- Minimum credit limit of $1,000.
- Interest rates: 14.99% on purchases, 22.99% on cash advances.
The BMO Ascend™ World Elite®* Mastercard®* comes with a high base rate on rewards, a healthy return on travel spending, premium travel perks and an extensive travel insurance package.
Pros
- Free membership in Mastercard Airport Experiences provided by LoungeKey, plus four free passes a year.
- Earn 2x bonus points and save up to 25% off rentals at participating National Car Rental and Alamo Rent a Car locations.
Cons
- You can’t transfer your BMO Reward points to frequent flyer or loyalty programs, but you can earn frequent flyer miles on your flight.
- No travel medical coverage for cardmembers over the age of 65.
- Welcome offer: Get up to 90,000 points and the annual fee waived in the first year for both the primary cardholder and authorized users.*
- 5x the points for every $1 spent on eligible travel purchases,* 3x the points for every $1 spent on eligible dining and entertainment purchases and recurring bill payments,* 1 point for every $1 spent everywhere else.*
- Now get the highest rewards points for travel of any premium flexible travel card in Canada!†
- Complimentary membership in Mastercard Travel Pass provided by DragonPass,* with four annual complimentary passes.
- Access over 1 million Wi-Fi hotspots around the world – all at no added cost, and no added fees or roaming charges.*
- Get valuable benefits and offers for digital everyday services from a variety of on-demand apps and subscription services.
- Points you can use to cover all flight charges & taxes.*
- Fly on any airline, with no blackout dates.*
- Best-in-class travel and medical insurance (unlimited trips per year).*
- BMO Concierge Service.*
- Unlock Mastercard Travel Rewards cashback offers when you travel and shop outside of Canada.
- *Terms and conditions apply.
- †Statement based on a comparison of the redeemable value of the non-promotional travel rewards points earned on premium flexible Canadian credit cards as of May 3, 2022. “Flexible” is defined as points earned when you purchase travel anywhere and “premium” refers to cards with an annual fee of ≤ $150 or has an income requirement of ≤ $150,000 annual individual income.
- BMO is not responsible for maintaining the content on this site. Please click on the Apply now link for the most up to date information.
Methodology: How we evaluate cards
NerdWallet Canada selects the best credit cards based on unique attributes, overall consumer value and suitability for specific kinds of consumers. Factors in our evaluation methodologies may include annual fees, rewards rates, interest rates and other noteworthy features specific to the card type. To learn more about how we evaluate and select financial products, you can review our credit card methodology.
Summary of the best rewards credit cards
| CARD NAME | BEST REWARDS CARDS FOR | ANNUAL FEE | INTRO OFFER |
|---|---|---|---|
| BMO CashBack® World Elite®* Mastercard®* | Best overall rewards card. | $120. | Up to 10% cash back. |
| American Express® Aeroplan®* Reserve Card | Best for: Premium tier. | $599. | Up to 85,000 Points. |
| BMO AIR MILES®† World Elite®* Mastercard®* | Best for: AIR MILES rewards. | $120. | 3,000 Miles. |
| BMO CashBack® Mastercard®* | Best for: Newcomers. | $0. | Up to 5% cash back. |
| Student BMO CashBack® Mastercard®* | Best for: Students. | $0. | Up to 5% cash back. |
| CIBC Dividend® Visa Infinite Card | Best for: Rewards on gas. | $120. | N/A. |
| MBNA Rewards World Elite® Mastercard® | Best for: Rewards on utilities. | $120. | Up to 30,000 Points. |
| Secured Neo Mastercard | Best for: Bad or no credit. | $60 ($5 / Month). | N/A. |
| Scotia Momentum® Visa Infinite* Card | Best for: Cash back rewards. | $120. | Up to $200. |
| SimplyCash® Preferred Card from American Express | Best for: Rewards on everyday spending. | $119.88. | Up to $400. |
| Tangerine World Mastercard® | Best for: Flexible rewards. | $0. | Up to $100. |
| TD First Class Travel® Visa Infinite* Card | Best for: Rewards on groceries. | $139. | Up to 135,000 Points. |
| Neo Money™ Card | Best for: Prepaid rewards. | $0. | N/A. |
| BMO Ascend™ World Elite®* Mastercard®* | Best for: Rewards on travel. | $150 | Up to 90,000 Points. |
| TD® Aeroplan® Visa* Business Card | Best for: Businesses. | $149 | Up to 60,000 Points. |
| Simplii Financial™ Cash Back Visa Card | Best for: No annual fee. | $0. | $100 Skip Digital Gift Card. |
How rewards credit cards work in Canada
With so many choices out there, selecting a rewards credit card can quickly become overwhelming.
Do you go for a credit card that rewards you for shopping at a particular store, a card that has accelerated earn rates on a category that fits your lifestyle, a card that has flexible redemption options, or something else?
Knowing how rewards work before and after you apply for a rewards credit card can help you decide.
What is a rewards credit card?
With rewards credit cards, you can earn points or miles on just about every purchase you make. The type of rewards you get depends on the credit card you have. Additionally, how you can use your rewards depends on the loyalty program set up by the issuer.
What makes rewards credit cards appealing is the idea that everyday purchases could be transformed into something you really want, like tickets to a concert or a free first-class flight.
How rewards credit cards work
As far as usage is concerned, rewards credit cards are similar to any other credit card. You charge your purchases, and then you get your statement when your monthly billing period is up. It is especially important to pay off your balance with rewards cards because interest charges can erode the rewards you earn.
In other words, as long as you’re on top of your bills, you can earn some sweet rewards without doing anything extra.
Types of rewards credit cards
There are dozens of rewards cards out there, but generally speaking, you can break them down into five different categories. Knowing what’s typically included within each category is essential since it’ll help you determine what card is best for you.
Flexible-points credit cards
Most major financial institutions have a general rewards credit card. The points you earn can typically be redeemed for a variety of lifestyle rewards, such as entertainment, merchandise, gift cards or financial rewards, as well as travel purchases.
Unlike travel rewards cards, general rewards credit cards might not offer the same travel perks and benefits expected by frequent travellers, such as comprehensive travel insurance or free airport lounge visits. But, foregoing these perks often means a lower annual fee.
Airline rewards credit cards
Airline credit cards allow you to earn points or miles for a specific airline. What’s interesting about airline credit cards is that the points you earn can usually be used on any airline that’s part of its network.
For example, Aeroplan is the loyalty program for Air Canada. Even if you don’t have one of the best Aeroplan credit cards, or you can use your points for a flight on any carrier that’s part of the Star Alliance network. There are also some general travel rewards programs, such as Air Miles, that also earn miles and can offer some additional value.
Depending on the tier of your airline rewards credit card, you may get additional perks such as free checked bags, priority boarding and increased status. Having an airline credit card is highly lucrative if you frequently fly with one airline or network.
Hotel rewards credit cards
While some people love the idea of free flights, getting a luxury stay at a nice hotel appeals to other people. Some would argue that hotel rewards are better than airline rewards since some hotel chains have a greater reach. For example, Marriott has over 7,000 properties in 130+ countries, so no matter where you’re travelling, it won’t be hard to find a room where you can use your points.
Hotel rewards credit cards will also typically include benefits that will make your stay more comfortable. For instance, you could get early check-in and late check-out. You could also get free high speed Wi-Fi or enhanced status.
Travel rewards credit cards
If you’re not loyal to one specific airline or hotel chain, then a general travel rewards program is something that will interest you. The points you earn can typically be used for any type of travel redemption, such as airfare, hotels, car rentals, cruises, and even vacation packages. Since your points don’t belong to one specific program, you have more options.
Some travel credit cards only allow you to use your points when booking travel through their online portal, while others let you use your points for any travel purchases you charge to your card.
Store or brand rewards credit cards
Many major retailers have their own loyalty programs and some even have co-branded credit cards. If you were to sign up for their store credit card, you would usually earn more points on in-store and online purchases.
Admittedly, the overall rewards you earn with a store credit card may not be as lucrative compared to travel rewards, but they can still be valuable. For example, many store cards offer an immediate bonus when you apply. You may also get an immediate welcome bonus when you apply, such as 15% off on first-day purchases. Plus, most store credit cards don’t have an annual fee, so one could make sense if you frequently shop at the same store.
Gas rewards credit cards
If you’re often on the road, you may want to consider a gas rewards credit card. These cards offer points or cash back rewards whenever you spend money to top up your tank at a gas station. Some gas rewards cards offer accelerated earnings when you spend money on fuel — any time, anywhere. Other rewards cards only let you earn points when you visit eligible gas station chains.
Popular credit card rewards programs in Canada
Credit card rewards programs are very appealing, but with so many different ones available, it’s important to understand how each loyalty program generally works before choosing a card. You don’t need to know the ins and outs of every program, but you do want to have a general idea of what they can do for you and how you could use your points.
Here’s a breakdown of some of the most popular rewards and loyalty programs in Canada:
Air Miles rewards
With nearly 10 million active Air Miles accounts in Canada, there’s a decent chance you’re already familiar with the Air Miles rewards program. Members collect Air Miles rewards — also called Rewards Miles — by making purchases at partner retailers using an Air Miles credit card. Rewards Miles can be redeemed for free flight tickets, cruise tickets, hotel stays, merchandise and more.
Aeroplan rewards
Aeroplan is a travel rewards loyalty program run by Air Canada, Canada’s largest airline.
Aeroplan points can be earned by signing up for an Aeroplan credit card; flying with Air Canada or any of its partner airlines, including Air India, Lufthansa and United; or booking qualifying hotel stays, car rentals and in-store purchases with Aeroplan’s brand partners, like Avis, Home Hardware and Sephora.
Like Air Miles rewards, Aeroplan points can be redeemed for flight tickets, hotel stays, gift cards and more.
PC Optimum rewards
The PC Optimum loyalty rewards program is owned and operated by Loblaws, a Canadian retail conglomerate. Members earn points each time they make qualifying purchases at eligible stores, including Loblaws, Real Canadian Superstore, No Frills and Shoppers Drug Mart. Members can also earn points when purchasing fuel at Mobil and Esso gas stations.
The PC Optimum points system is straightforward: every 10,000 points is worth $10 and can be applied to in-store purchases at partner stores. There’s even a PC Optimum mobile app to help you track points and special weekly offers.
American Express Membership rewards
AmEx carriers, this one’s for you: the American Express Membership rewards program is only available to — you guessed it — American Express cardholders. The program offers points every time you swipe your card on an eligible purchase. Points can be redeemed for travel experiences, merchandise, gift cards — you can even use your points to pay for Amazon purchases.
Petro-Points rewards
The Petro-Points rewards program offers points for visiting Petro-Canada gas stations. The system is straightforward enough: pump 1L of gas or spend $1 in-store — earn 10 Petro-Points. Points can be redeemed for fuel, car washes, in-store purchases or online gift cards.
Petro-Canada doesn’t issue its own credit cards but some RBC credit cards offer accelerated Petro-Point earn rates.
SCENE+ Rewards
If you’ve visited a Cineplex theatre in the last decade, you’ve likely heard of Scene+ rewards points. What started out as a rewards program for Cineplex ticket purchases and concession stand spending has since evolved into a robust points system with numerous ways to earn and redeem, called Scene+. This new points system is the offspring of the Cineplex SCENE program and Scotia Rewards, Scotiabank’s credit card rewards program.
You can still earn Scene+ points when you visit a Cineplex theatre, but you can also earn points when you visit Playdium, eat at partnered restaurants, shop with partnered retailers — even book travel excursions through Scene+ Travel. Earn accelerated Scene+ points with the Scotiabank SCENE Visa credit card.
Does the card network matter? Visa vs. Mastercard vs American Express
Credit card companies, commonly referred to as issuers, are the banks, credit unions and other financial providers through which you might apply for a credit card. There are dozens of credit card issuers in Canada.
Credit card networks, on the other hand, provide the technology and infrastructure that makes credit card transactions possible — and effortless — almost anywhere in the world. Canada has only three credit card networks: Visa, Mastercard and American Express.
The network to which your rewards credit card belongs may affect how widely the card is accepted, processing costs and cardholder benefits. Generally, however, all three of the major networks offer attractive reward card options in Canada.
Using credit card rewards
When choosing a rewards credit card, it’s important to understand the rate at which you will earn points and what options you have for redeeming them.
How rewards credit cards earn perks
The earn rate on a rewards credit card is the number of rewards points or miles you earn on each dollar spent.
Some cards offer a flat rate, meaning you earn the same rewards on every purchase. For example, you may earn 2 points for every $1 you spend with your card.
Most rewards credit cards have a tiered rewards structure when making purchases. The type of structure can vary quite a bit between cards. For example, you may have an accelerated earn rate on purchases made in certain categories, such as travel, groceries, gas and drugstores, or at stores that belong to a certain brand family. All other purchases will use the lower base earn rate.
Ideally, you want to choose a credit card with an accelerated earn rate that is aligned with your spending habits.
How to calculate the value of credit card rewards
Knowing how to calculate the value of your points or miles is essential since not every redemption value is the same. By establishing a baseline value for your points, you can decide if specific redemptions are worth it — even if you’re not getting the maximum value.
The formula used to determine the value of one point is as follows:
Cash value of the redemption x 100 / number of points required = Cost per point
This formula can be applied to any redemption regardless of the loyalty program. For example, let’s say you want to redeem 13,400 points for a $100 gift card. Your formula would be the following:
$100 x 100 / 13,400 = .75 cents per point
Do rewards points ever expire?
It doesn’t matter how long you’ve been a member of a loyalty program or how many points you’ve accumulated; you can lose everything if you’re not paying attention.
Generally speaking, most loyalty programs that belong to an airline or hotel have a defined expiry date of 12 – 18 months. However, that only applies if there’s been no account activity in your account during that time. Your clock would reset if you earn or redeem just one point during that time. Even if you’re not travelling anytime soon, you could make a small redemption or donate some points to ensure you don’t lose the rest of your points.
When it comes to bank credit card rewards programs, it’s unlikely your points will expire as long as your credit card account is in good standing. Your account would only fall out of good standing if it becomes delinquent or your credit card is used for fraudulent activity.
How to redeem credit card rewards
Rewards programs offered through a bank typically have their own website where you can make redemptions. They’ll usually have separate tabs where you can choose from travel, gift cards, merchandise, and financial rewards. While this can be handy, you’re typically limited to their offerings. For example, you wouldn’t be able to book an Airbnb via their site.
That said, some general rewards programs allow you to redeem travel purchases that weren’t made through the bank’s website as long as you charge it to your credit card.
Redeeming store rewards points
Store rewards points are typically redeemable only in-store or online. When you’re checking out, have the cashier scan your loyalty card. You’ll then be able to redeem as many points as you like. If you’re making an online purchase, you’ll need to log in first. Then, when you’re paying, there should be an option to redeem your points.
Rewards credit card terms and conditions
Like all credit cards, rewards credit cards generally have a set of terms and conditions to which you must agree in order to become a cardholder. Terms and conditions specific to your credit card issuer, as well as each type of rewards card they offer, should be available online. You will also likely receive a written copy of the terms and conditions when you receive your physical card in the mail.
Common terms and conditions include:
- The rights of your card issuer under the agreement.
- Your rights under the agreement.
- How you earn points.
- Rewards categories.
- How you can use your points.
- How to transfer your points.
- Under what circumstances you might lose your points.
- When your reward points might expire.
How to pick the right rewards credit card
Every rewards credit card is good for at least one thing, so deciding on which card is best for you can be difficult. Here are some important criteria to compare and consider:
Type of rewards
Think about your short and long-term goals. For example, if you’re planning a honeymoon and want to have an epic trip, then getting a travel rewards credit card to earn a free flight might be the right thing to do. Alternatively, let’s say you want to save money on your grocery bills. Then getting a credit card with grocery rewards or a co-branded store credit card to earn discounts and in-store credit might be a better choice.
Welcome bonus
If you’re trying to decide between several cards with similar rewards, the tiebreaker can often be the sign-up bonus. Some credit cards offer a generous intro offer that is more than the annual fee or jumpstarts your earning with thousands of free points or miles.
Interest rate
When comparing rewards cards, be sure to take a look at the interest rate — and there may be more than one:
- Promotional interest rate. Some cards offer promotional or introductory interest rates that stay in effect for a set period of time — typically six to 18 months. These rates tend to be lower than the regular rate that applies once the introductory period is over. Some cards even offer 0% introductory interest rates.
- Purchase interest rate. This rate determines how much interest you’ll owe on any outstanding balance, which is especially important if you don’t always pay off your credit card in full.
- Cash advance interest rate. If you withdraw cash from an ATM using your credit card, that transaction may be subject to a different interest rate than the one applied to regular purchases. This interest rate, also called a cash advance rate, may be higher than your purchase interest rate and may also be accompanied by a flat-rate transaction fee.
- Balance transfer interest rate. Transferring an existing balance from one credit card to another may call your balance transfer interest rate into effect: an interest rate that only applies to funds relocated from another credit card.
Earn rate
Every credit card has a base earn rate, but just about all of the best rewards credit cards in Canada have an increased earn rate for specific bonus categories. For store rewards cards, you’ll usually get an increased earn rate on in-store and online purchases. However, if you have a general rewards credit card, you could earn extra points on categories such as groceries, gas, pharmacies and more. The earn rate is essential since choosing a card that lines up with your spending can quickly increase the number of points or miles you earn.
Annual fee
If you’re firmly against the idea of paying an annual fee for your credit card, you’ll instantly narrow down your choices. That said, rewards credit cards that have an annual fee typically come with more benefits that could be worth more than that yearly fee.
Reward flexibility
Having a lot of points is meaningless if it’s hard to redeem them. Look for a loyalty or rewards program where you know you’ll be able to use your points without much trouble. What you’re looking for are programs where there are no blackout dates and many different redemptions options. You’ll also want to consider if the program has any transfer partners, as that’s another way to use your points. Additionally, knowing if and when your points expire is key to making sure you don’t lose your hard-earned rewards.
Additional benefits of reward credit cards
Besides the main categories covered by general rewards credit cards, consider the additional perks that are included. These extra perks can often be the thing that helps you choose one card over another.
Consider the following benefits that often come with rewards credit cards:
- Rental car discounts and insurance. Certain cards will earn you cheaper rates on rental cars — even internationally — as well as some insurance coverage.
- Security features. It’s becoming more common for rewards cards to offer things like identity theft protection, the ability to lock your card, or block foreign and online transactions, via a mobile app.
- Mobile device insurance. In recent years, mobile device insurance has become a popular benefit. Basically, if your mobile device, including your wireless phone and tablet, is damaged, lost or stolen, you can make a claim.
- Roadside assistance. This perk can help you out if you ever run into car troubles. Be sure to read the details of your roadside assistance plan, as the process of making a claim can be very specific.
- Extended warranty. Many credit cards will lengthen your warranty up to one additional year as long as you charge the full cost of the purchase to your card.
- Price protection. If you find a lower price after making a purchase, some credit cards will give you back the difference as long as it falls within a specific time period.
- Concierge service. A credit card concierge can help you with basic tasks such as booking travel, ordering fits and securing event tickets.
- Airport lounge access. Some credit cards include airport lounge access, plus free annual lounge passes. These benefits could easily have a value of over $300, so it can offset any annual fee you might pay.
- Travel insurance. Depending on the credit card, an extensive travel insurance package could be included. This could cover things such as medical expenses, trip cancellation, lost luggage, and more.
- No foreign transaction fees. Many credit cards charge a 2.5% fee when you make a purchase in any currency that’s not Canadian dollars. If your card has no foreign transaction fees, then you’re just paying the straight exchange rate.
As you can see, the list of additional benefits you can get with your rewards credit cards can be pretty extensive. Always prioritize the perks that are important to you when applying for a card.
How to get a rewards credit card
Eligibility criteria for rewards credit cards are fairly standard: you need to be a Canadian resident and you need to be the age of majority in the province or territory where you live.
Outside this, there may be credit score and annual income threshold minimums to consider, but these vary by card.
When you apply for a rewards credit card, there’s no guarantee you’ll be approved. The credit card provider needs to assess your financial profile to determine if you’re creditworthy. The application process will typically look something like this:
Steps to apply for a rewards credit card
- Fill out an application. This can be done online or at your financial institution. The application will ask for some basic information, such as your name, date of birth, address, social insurance number, employer and income.
- Your information is checked. The credit card issuer will check your credit history and verify the information that you provided.
- A decision is made. If you apply online, instant approval (or disapproval) is possible, but there’s also a chance the credit card issuer will ask you to contact them to provide additional information.
- Your card is mailed out. Your credit card will immediately be mailed out and will typically arrive within 14 business days.
- Activate your card. Once your card arrives, you’ll need to activate it by logging into your account or calling the number on your card. Once activated, you can use your card to make purchases.
Should you have multiple rewards credit cards?
The number of credit cards you should have ultimately comes down to your financial health, spending habits and goals.
Different rewards credit cards offer bonus or accelerated earn rates for different categories of spending. Likewise, cards vary in the types of reward they can deliver.
In some cases, it can make sense to have a rewards card that helps you capitalize on your biggest areas of spending, like one card that earns significant travel rewards and another that earns bonus points at the grocery stores.
However, multiple credit cards represent multiple opportunities for accumulating high-interest debt, so make sure you’re confident in your ability to pay the bills in full regularly. And keep in mind that each credit card application can result in a hard inquiry on your credit report, temporarily reducing your credit score.
Everyone sees a different value in rewards credit cards. What works for you may not necessarily be suitable for someone else. Generally speaking, a rewards credit card is worth it in the following scenarios:
Reasons a rewards credit card might be worth it
- No annual fee. Many credit cards with no yearly fee still come with a few benefits.
- Rewards align with your spending. If you shop at a specific store regularly or find that a lot of your budget goes toward groceries, a card that rewards you for those behaviours is often worth it.
- You have a goal in mind. Having a specific redemption in mind is essential since you can then apply for rewards credit cards to help you reach that goal.
- Good welcome bonus. Sign-up bonuses and intro offers that are given to new applicants are often worth hundreds of dollars.
- You’re looking to save money. The points you earn from a store rewards credit card can reduce the cost of your purchases.
- You want a specific benefit. If the credit card comes with a benefit you want, such as no foreign transaction fees or roadside assistance, it could be reason enough to sign up.
Reasons a rewards credit card might not be worth it
Even though the positives are compelling, situations, where it may not be worth getting a rewards credit card, include:
- You typically carry a balance. No amount of rewards is worth it if you’re paying interest.
- You’re worried about your spending. Some people will spend more when they have access to a credit card.
- You can’t meet the requirements. Most rewards credit cards require applicants to have a good credit score, meet certain income requirements and be the right age. If you aren’t eligible, consider a more suitable option.
- You’re not getting value out of the annual fee. You may want to get a no-fee card if you’re not using any of your included benefits.
- You prefer something simple. Even though redeeming rewards can be easy, it still takes some planning. If you like simplicity, going with a cash-back card may be better.
How to make the most of your rewards credit card
If you’ve decided that a rewards credit card is for you, you can follow a few tips to ensure you get the most out of your card.
- Always pay your bill in full and on time, so you don’t pay any interest.
- Make sure you meet the minimum spending requirement to get your welcome bonus.
- Pay attention to your earn rate and use your rewards card on purchases that earn extra points.
- Research your rewards program so you know what you can do with your points or miles.
- Always calculate the value of your points before making a redemption.
- See if your loyalty program has a partner network where you can earn additional points.
Although choosing a rewards credit card may require you to do some research, the value you get is often worth it. Getting free stuff on points feels great, especially if it’s something you’ve been saving a long time for.
Other types of credit cards to consider
Although cash-back cards are easy to understand, they aren’t always one of Canada’s best credit cards. Depending on your situation, you may want to consider one of the following types of credit cards instead.
The value of your rewards credit card points or miles will vary depending on the rewards program you join and what you redeem them for. If you can, go with the reward that has the highest value.
By calculating a baseline value for your points, you can decide if specific redemptions are worth it — even if you’re not getting the maximum value.
The formula used to determine the value of one point is as follows: Cash value of the redemption X 100 / number of points required = Cost per point.
Credit card rewards are considered a rebate/discount by the Canada Revenue Agency, so you won’t be taxed. Rewards are really no different from a coupon, which isn’t taxable. That said, if you earn cash-back rewards as part of your employment or business, it may be taxable.