Some rewards cards are more complicated than they need to be. The MBNA Rewards World Elite MasterCard quietly bucks that trend and is arguably the most straightforward and flexible rewards card to use for everyday spending.
Other top rewards credit cards have incentives such as higher earn rates for the first three to six months, or they pay back more in certain spending categories but not in others. With the MBNA Rewards World Elite MasterCard, you earn 2 points for every dollar spent – anywhere – with no limits to how much you can earn.
Let’s take a closer look at what makes this card so attractive for everyday use.
MBNA Rewards World Elite MasterCard Review
Incredibly, I’ve never written a full review on this card before now, but a recent reader question prompted me to take a closer look.
This reader was looking for a cash back credit card and was torn between two Visa Infinite cards: Scotia’s Momentum Visa Infinite, and CIBC’s Dividend Visa Infinite. Both are solid cash back cards, but here’s why I suggested taking a look at the MBNA Rewards World Elite MasterCard instead:
First, the details. We already mentioned getting 2% back on every purchase. You also get 10,000 points with your first purchase, putting an immediate $100 into your pocket. In addition, if you sign-up for the card through Great Canadian Rebates, you’ll get another $60 cash back from GCR.
Is it a travel card, or a cash back card?
Ok, now for one of the better features: Flexible rewards redemption. The MBNA Rewards World Elite MasterCard is often promoted as a travel credit card, but it actually works just as well, if not better, as a cash back credit card. Here’s why:
One annoying feature of the Scotia Momentum card is that you only get your cash back once a year, in November, as a statement credit. With the MBNA card you can redeem your points as often as you want, in whatever form you want – a statement credit, a deposit into your account, or even by cheque.
It also has a lower annual fee ($89 vs. $99), which gets wiped out in the first year by the 10,000 welcome points. Add in the $60 cash back from Great Canadian Rebates and you’ve essentially paid for the annual fee for two years.
Let’s talk about ‘Other’ Spending
Here’s another point in favour of the MBNA Rewards World Elite MasterCard. ‘Other’ spending.
If your “other” spending – purchases that don’t fall into categories like groceries, gas, dining, travel, etc. – is significant then you’ll benefit more from a straight 2% cash back card with no caps on how much you can earn. The MBNA Rewards World Elite MasterCard fits the bill, as it doesn’t matter where you use your card, you’re getting 2% back on those purchases.
I used the Scotia Momentum Visa Infinite card for several years until our shopping patterns changed and I found myself spending more on ‘other’ categories and also we switched most of our grocery shopping to Costco, which does not accept Visa.
I’ve written here before about the Costco effect on earning rewards and how if you shop regularly at the warehouse giant then you need to use a MasterCard.
I’ll be clear: Right now I personally use the Capital One Aspire World Elite MasterCard for my everyday spending, but that’s only because it’s a grandfathered version of the old Cap One Aspire Travel that comes with a $120 annual fee (the new version of the card has a $150 annual fee) and it still pays me10,000 miles each year on my card anniversary, a generous $100 feature that the new card doesn’t offer.
For all of these reasons, if I was looking to get a new everyday rewards card today, I’d choose the MBNA Rewards World Elite MasterCard.
You can sign-up here and get an additional $60 cash back through Great Canadian Rebates.
American Express entered the cash back credit card market in 2014 when it introduced its no-fee SimplyCash Card along with an annual fee card called SimplyCash Preferred. Today, Amex announced some changes meant to enhance the value of its SimplyCash Preferred Card. The feature most widely promoted will be its new 2 percent cash back rate on all purchases. What quietly changed is the annual fee increased by $20 and the amount of cash back you can earn during the bonus period has decreased by $100. Here’s what’s new and how it all breaks down:
New SimplyCash Preferred Card by American Express
As mentioned, the biggest change is that cardholders can now earn 2 percent cash back on every purchase in any category with no limit on how much cash back you can earn at 2 percent. A six-month introductory bonus period gives cardholders 5 percent cash back on all purchases in any category up to a maximum of $300 cash back ($6,000 spent during that period). The annual fee is now $99 (up from $79) and supplementary cards are free. Cash back earnings will continue to be applied to your account annually as a statement credit.
How much can you earn with this card? Let’s assume a new cardholder spends $2,000 per month on the SimplyCash Preferred Card in the first year:
- Bonus six months x $1,000 @ 5 percent = $300 cash back
- Bonus six months x $1,000 @ 2 percent = $120 cash back
- Remainder of the year x $12,000 @ 2 percent = $240 cash back
- Total cash back in first year = $660
Subtract the $99 annual fee and the new cardholder will have earned $561 in the first year – a nice 2.34 percent earn rate on your spending. In subsequent years, with no bonus period and just a straight 2 percent cash back rate, the cardholder will earn $480 cash back, and when you subtract the annual fee will be left with $381. That’s an average earn rate of 1.59 percent on your spending.
*It should be noted that existing cardholders will continue to pay a $79 annual fee. Former or current cardholders can apply for the new card, however they will not be eligible for the 5 percent welcome rate period.
Old SimplyCash Preferred Card
Prior to today, the SimplyCash Preferred Card from American Express came with a $79 annual fee and offered 1.5 percent cash back on all purchases. The six-month introductory bonus period gave cardholders 5 percent back on all purchases (any category), up to a maximum of $400 cash back ($8,000 spent during that period).
Someone who spent $24,000 per year on the SimplyCash Preferred Card would have earned $640 cash back in year one. Take out the $79 annual fee and they’re left with $561 in the first year – the exact same total as one would earn with the New SimplyCash Preferred Card.
In subsequent years cardholders that spent $2,000 per month would have earned $360 in a year ($281 after the annual fee). That’s $100 less than you can now earn each year with the new card. So for ongoing and everyday use, the New SimplyCash Preferred Card from American Express is definitely an improvement over the old version of the card.
How Does the New Card Stack Up?
The 2 percent cash back rate on every purchase also puts this card inline with the MBNA Rewards World Elite MasterCard, a card which also offers 2 points for every dollar spent and comes with an annual fee of $89, and is widely considered to be one of (if not the) best cash back credit card on the market.
The main difference between the two cards comes down to the welcome bonus: MBNA offers 10,000 bonus points ($100), while Amex offers the 5 percent cash back welcome rate (up to $300) for the first six months. If one can maximize the welcome rate on the SimplyCash Preferred Card ($1,000 per month in spending for six months) then the $200 additional cash back dollars earned will more than make up for the $10 per year advantage that the MBNA Rewards World Elite MasterCard offers after year one.
Overall the changes to the SimplyCash Preferred Card seem positive as it puts this card right back into the conversation for the best cash back credit card on the market (along with MBNA Rewards World Elite MasterCard and the Scotia Momentum Visa Infinite). As always, where you do your shopping matters and so if you shop regularly at retailers that do not accept American Express cards then this card isn’t for you (Costco and Loblaws stores come to mind).
Given the recent news of Tangerine downgrading its Money-Back Card, and Chase closing its Amazon.ca Rewards Visa to new applicants, this is a welcome change for the Canadian rewards credit card market and one that should be received positively from fans of cash back in particular.