Cash back credit cards have taken a backseat as travel rewards continue to hog the limelight. Banks and other card issuers have shelled out big bucks to promote their best travel cards in the wake of the massive Aeroplan credit card shakeup.
Meanwhile, fans of cash back rewards have seen some of their favourite cards get devalued. It started when TD bought MBNA Canada and promptly slashed the rewards of its Smart Cash card, arguably Canada’s best cash back credit card at the time.
Since then, Capital One got in on the act by discontinuing its popular Aspire Cash World MasterCard and then, most recently, eliminating the 25% cash back bonus on its Aspire Cash Platinum card.
So what’s left in the cash back credit card space? Luckily the cupboard isn’t completely bare. Here we compare the best cash back credit cards on the market:
7 cash back credit cards compared
|Cash Back Credit Card||Benefits|
|Scotia Momentum Visa Infinite||4% back on groceries & gas, 2% back on recurring bills and drug store spending, 1% on everything else.|
|Capital One Aspire Travel World MasterCard||2 reward miles for every $1 spent on all purchases. Can redeem points for cash.|
|MBNA Smart Cash MasterCard||5% back on groceries & gas for first 6 months, 2% back thereafter and 1% on everything else.|
|American Express TrueEarnings Card||3% back on restaurants, 2% back on gas, up to 1% back on everything else.|
|RBC Cash Back MasterCard||2% back on groceries and up to 1% back on everything else.|
|BMO Cash Back World MasterCard||1.25% back on every purchase. 3% back at Shell gas stations.|
|Scotia Momentum Visa||2% back on groceries, gas, recurring bills, and drug store spending, 1% on everything else.|
Scotia Momentum Visa Infinite
The Scotia Momentum Visa Infinite is clearly the cash back king in Canada. No other card gives as much cash back for big spending categories like groceries, gas, and drug stores. You can also get 2% cash back when you pay your recurring bill payments (cable/phone/internet) with your card.
All the cash back you earn gets tracked on your credit card statement and is paid out at the end of the year, usually in November. This card comes with a $99 annual fee, which is waived in the first year.
Because it’s a Visa Infinite card, you’ll need to have excellent credit and earn a minimum annual income of $60,000 to qualify.
Capital One Aspire Travel
Some people prefer to use one rewards card for all their spending. In that case, the Capital One Aspire Travel World MasterCard might fit the bill. It’s marketed as a travel card but can double as a cash back credit card.
You earn double miles on every purchase, so you don’t need to remember which card to use when you’re out shopping. Redeeming your points is straightforward – 10,000 miles equals $100 worth of travel OR $75 in cash back.
This card comes with a $120 annual fee but offers a generous welcome bonus of 35,000 miles on your first purchase. That’s good enough for $262.50 in cash back. The card also pays 10,000 miles each year on your card anniversary, which nearly pays for the annual fee.
Because it’s a World MasterCard you’ll need to have excellent credit and earn a minimum annual income of $70,000 to qualify.
Costco TrueEarnings Card from American Express
If you shop at Costco regularly, the American Express TrueEarnings card is worth a look. Not only do you earn cash back for shopping at Costco, where they only accept American Express credit cards, but you’ll earn 3% cash back on restaurant purchases and 2% cash back on gas purchases.
No other card gives as much cash back for restaurant spending, so this card is worth carrying if you dine out frequently. The TrueEarnings card doesn’t have an annual fee and you’ll only need a minimum income of $15,000 to qualify.
MBNA Smart Cash
While the MBNA Smart Cash MasterCard took some heat when its rewards were devalued, the card still maintains some attractive qualities. For starters, the 5% cash back bonus on groceries and gas for the first six months is best in class.
The card also gives 2% back for grocery and gas purchases, which is the highest for a no-fee card. The Smart Cash card is still the best no-fee cash back card on the market and you don’t need a high income to qualify – the minimum income is $35,000 per year.
RBC Cash Back MasterCard
The RBC Cash Back MasterCard looks decent at first blush, but several drawbacks are hidden in the fine print. The 2% cash back on groceries is limited to $6,000 in annual spending, or $500 per month. After that, you’ll earn 1% back. On all other purchases you’ll get 0.5% cash back until you reach the $6,000 plateau – afterwards you’ll escalate to 1% cash back.
It’s a no-fee card and decent enough for RBC customers to carry around if it helps them save on bank fees.
BMO Cash Back World MasterCard
An interesting offering from BMO is its Shell Cash Back World MasterCard, which pays 1.25% cash back on all purchases and a nice 3% cash back when you fill up at Shell gas stations. You also get a bonus of $50 cash back when you make your first purchase.
The card comes with a $79 annual fee and because it’s a World MasterCard you’ll need to earn a minimum income of $60,000 to qualify.
Scotia Momentum Visa
Rounding out the top cash back credit cards is the original Scotia Momentum Visa, which comes with a $39 annual fee and gives you 2% cash back on groceries, gas, and drug store purchases as well as on recurring bill payments.
This is a good alternative for those who don’t qualify for the Infinite version of the card but who still want to earn solid rewards in several high spending categories.
Despite all the marketing and hype of travel rewards cards today, for some people the best value can be found with a cash back credit card.
Cash back rewards are simple and easy to understand. You spend money on your card and earn cash back, which gets paid out to you in the form of a cheque or a statement credit. There’s no blackout dates or flight rewards charts to figure out in order to redeem your points.
With a bit of effort you can earn around 2% cash back by using one, or a combination of two-or-three of the cash back cards mentioned here. That adds up to $400 per year back in your wallet on $20,000 annual spending.