I received an email from reader ‘Ted’ in response to a recent column I wrote in the Toronto Star about cash back credit cards:

I just read your article “8 more no-fee cash back credit cards compared“, and would like to ask you two questions concerning the MBNA Smart Cash card (which is the card I currently use):

But first – before TD purchased MBNA, the cash back awards were higher and fairer.  Since they took over they’ve reduced the true amount a customer will now receive.

BEFORE

after the first 6 months: 3% back on ALL grocery and gas purchases and 1% back on all other purchases – with purchase totals being carried forward from one month to another

AFTER

following the first 6 months: 2% back on grocery and gas purchases provided a minimum amount is spent each month (with a ceiling imposed on how much you will be given cash back on/per month).  All other items provide 1% cash back with a ceiling on spending – and no balance carry-overs permitted.

Related: Changes To MBNA Smart Cash Rewards Explained

QUESTIONS

1) When you did your research on these 8 cash back credit cards, did you take into account the new limitations TD put into place before you concluded that it provided more cash back than the other cards?

2) Did your research show any restrictions/limitations with the other cards you’ve mentioned in your article and if so what are they??

As a Canadian, and a Senior Citizen, I’m offended that the TD would take away the benefits I enjoyed/needed when MBNA was owned by The Bank of America, who, by the way, still offer the same cash back values they offered with their MBNA card – but now they offer it, in the U.S. of A, via their Visa card.

If I can find a card that would provide me with as much true value (or more), than my MBNA card currently offers, I’d switch in a heart-beat.

Thank you for your time and input.

Cash Back Credit Cards: Which One Should You Use?

Hi Ted, thanks for your email.  I used the Smart Cash card for two years before TD decided to reduce the amount of cash back you could earn (last December).

From there I researched the top cash back credit cards and decided to use two cards to maximize the amount of cash back I could earn.  So now I use the Scotia Momentum Visa Infinite for groceries and gas (4% cash back), and for pharmacy and recurring bill payments (2% cash back).

I also use the Capital One Aspire Cash World MasterCard for everything else (because you get 1.5% back on all your spending, instead of the 1% back that Scotia pays on the ‘other’ categories).

I’ve written about this in more detail here – Top Cash Back Credit Cards In Canada

The article you’re referring to in The Star stemmed from some readers complaining that they couldn’t get the Visa Infinite or the World MasterCard due to the higher income requirements ($60k personal, $100k household).

So I decided to list and compare other options for people who earn less than $60k but who still want to get a decent return from their cash back card.

Related:  How Do You Get Approved For The Best Rewards Cards?

To answer your questions:

1.  Yes, I used the current Smart Cash rewards structure.  Believe it or not, even with the recent changes it’s still superior to the other basic cash back credit cards on the market.

2.  There are limits/restrictions on some of the bank cards but they didn’t factor in when I compared them based on spending $1,000/month.  For example, RBC’s Cash Back MasterCard gives you 2% back on groceries up to a maximum of $6,000 per year.  So if you spend more than $500 a month on groceries you would reach that threshold.

The Bottom Line:

The Scotia Momentum Visa Infinite and Capital One Aspire Cash World MasterCard, when used together like I’ve described above, will give you the most cash back.

The caveat being that you’ll need to show proof of at least $60k annual income, or $100k in household income to qualify.

The Capital One Aspire Cash World MasterCard is a no-fee cash back card and you’ll also get $100 bonus with your first purchase.

It’s also worth noting that the Scotia card comes with an annual fee of $99.  That’s partially offset in the first year by a $50 statement credit after your first purchase.

Just keep that in mind because you’ll want to make sure your annual spending will give you enough cash back to justify the annual fee, and that you’ll actually net more cash back than you would using a no-fee card like MBNA’s Smart Cash Platinum.

Related: My Credit Card Fail With The TrueEarnings Card From Costco

All that said; if you don’t meet the minimum income threshold to qualify for the premium reward credit cards unfortunately you’re out of luck.

What I’d do in this case is continue to use the Smart Cash card for groceries and gas (up to $400 a month) and then apply for the Capital One Aspire Cash Platinum card (that I referred to in The Star article) and use it for all your other monthly purchases.

With the Capital One Aspire Cash Platinum card, you’ll get 1% back on all your spending with no caps and no restrictions.  Plus you’ll get a 25% cash back bonus at the end of the year, which means you’ll earn 1.25% back.

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