One of the best financial decisions we ever made was to start using a cash back credit card, instead of a debit card, for all our daily purchases and recurring bill payments.

My wife and I were addicted to debit, and paying over $300 a year in fees to get unlimited debits with our TD chequing accounts.  So we combined our finances, switched to a no fee bank account and now we use the MBNA Smart Cash MasterCard to pay for gas, groceries and entertainment.  We’ve also set-up automatic payments for our phone, cable and utility bills.

We’ve used the Smart Cash card for over a year and collected more than $500 in cash back credit card rewards.  So we’re ahead by more than $800!  Best of all, there is no annual fee.

Related: Why Cash Back Beats Travel Rewards

If you have the discipline to pay off your credit card balance in full every month, using a cash back credit card can be a great way to earn rewards for your everyday spending.

To find the right card, you need to figure out how much money you spend on average each month.  Some annual fee credit cards offer juicy rewards, but unless you have a good income and spend at least $2,500 per month on your card, you’re better off with a no fee rewards card.

Related: PC MasterCard Review

Cash Back Credit Card Comparison

I looked at the cash back credit cards with no annual fee, and compared them based on spending $1,000 a month or $2,500 a month to see which was best.

Credit CardCash back on $1,000/month*Cash back on $2,500/month**
MBNA Smart Cash$252$516
Capital One Aspire Cash$280$550
Canadian Tire Cash Advantage$216$486
RBC Cash Back$180$360
PC MasterCard$140$320
Scotia Momentum No-Fee$120$300
CIBC Dividend Card$101$281
TD Rebate Rewards$105$235
BMO Cash Back$60$150

*based on spending $500 per month on groceries and $200 per month on gas

**based on spending $800 per month on groceries and $300 per month on gas

The Capital One Aspire Cash World MasterCard comes out on top for the best cash back credit card.  You’ll get $100 cash bonus with your first purchase, 1% cash back on all spending, and they’ll top up your rewards balance with an extra 50% of the cash back you’ve already earned each year.

The Smart Cash card is another good cash back card option.  That’s because new cardholders enjoy a bonus reward rate of 5% cash back on grocery and gas purchases during their first six months. After the introductory period, this card gives 2% cash back on gas and grocery purchases, and 1 per cent cash back on all other spending.

Choosing the best cash back credit card all depends on how much you spend a month, and on which categories you spend the most money.  Plus, you’ll want to look beyond  what you’ll earn in the first year, which can be front-loaded with introductory bonuses.

Related: Choose Your Rewards Card Carefully 

After the first year, you’ll earn $192 a year when you spend $1,000 a month and $372 a year when you spend $2,500 a month with the MBNA Smart Cash card.

With Capital One Aspire Cash, you’ll earn $180 a year when you spend $1,000 a month and $450 a year when you spend $2,500 a month

I like using a cash back credit card to help save and earn money on my everyday spending.  Since I’m spending the money anyway, I’d rather use a credit card and get a cash rebate rather than use my debit card and pay bank fees.

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