Best No-Fee Cash Back Credit Cards In Canada
It’s nice to get cash back rewards on your credit card spending, but the top cash back credit cards come with an annual fee that can take a bite out of your earnings. If you’re not a big spender, the best option is a no-fee cash back credit card.
Best No-Fee Cash Back Credit Cards
You can still earn big rewards with a no-fee card. I used the MBNA Smart Cash card for over a year, and collected $700 in cash back.
With this no-fee cash back credit card, you’ll get 5% back on groceries and gas for the first 6 months, and 2% back thereafter. You’ll also get 1% back on all your other purchases, including recurring bill payments.
RBC’s Cash Back MasterCard pays 2 percent back on up to $6,000 of grocery spending per year, plus up to 1 percent back on everything else.
Capital One’s Aspire Cash Platinum card is also worth a look. With 1 percent back on all your spending, and no limit on how much cash back you can earn.
Unfortunately, Capital One discontinued its Aspire Cash World card, which paid cardholders 1.5 percent back.
To find the best credit cards, 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 high income and spend more than $2,000 per month on your card, you’re probably better off with a no-fee rewards credit card.
Related: Best Credit Cards For Travel Rewards
No-Fee Cash Back Credit Card Comparison
I took a look at the best cash back credit cards with no annual fee, and compared them based on spending $1,000 per month and $2,000 per month to see which one came out on top.
I also looked at how much cash back you’ll earn after using the card for three years to balance out the cards that pay big bonuses in the first year.
| Credit Card | Annual Cash back $1,000/month* | After 3-years | Annual Cash back $2,000/month** | After 3-years |
| MBNA Smart Cash | $240 | $576 | $270 | $666 |
| RBC Cash Back | $138 | $414 | $270 | $810 |
| Capital One Aspire Cash | $120 | $360 | $240 | $720 |
| PC MasterCard | $120 | $360 | $240 | $720 |
| TD Rebate Rewards | $120 | $360 | $240 | $720 |
| Scotia Momentum No-Fee | $102 | $306 | $204 | $612 |
*based on spending $400 per month on groceries and $100 per month on gas
**based on spending $800 per month on groceries and $200 per month on gas
Which Card Is Best?
For higher spenders, the RBC’s cash back card comes out ahead over the long term. That’s because there’s no limit on how much you can earn at the 1 percent tier. The Smart Cash card, on the other hand, caps your earnings after you spend $1,250 in a month.
But if you spend a lot on groceries and gas, but not on much else, the MBNA Smart Cash card is your best bet. You’ll get 5% cash back for six months on grocery and gas spending, and 2% cash back thereafter. The downside to the Smart Cash card is that there’s a $400 per month cap on grocery and gas spending, and it only pays 1% on all other purchases, up to a maximum of $1,250 a month.
One helpful tip for Smart Cash cardholders is to upgrade to the Smart Cash World MasterCard after a year or so of using the Smart Cash Platinum card. Since it’s a World card, you’ll need to earn $60,000 personal income in order to qualify. But once you make the switch, you’ll no longer have a cap on how much cash back you’ll earn, plus, you’ll get another 6 months of the 5% cash back on groceries and gas purchases.
Hello and thank you for your analysis. One question if I may. How do you pay off your MBNA credit card every month? Are you able to set it up as a “payee” on internet banking or do you have to cut them a cheque? I remember looking into this over ten years ago when MBNA/Capital One first came to Canada and the only way I could pay was to send a cheque in the mail – which I thought might be risky. Just wondering if things have changed.
Many thanks!
@MG – great question. You can set-up the MBNA Smart Cash card as an online bill payment with your regular bank. I just use my ING chequing account and pay the bill online when I get the statement.
Super useful post — thank you! I’ve been using TD Rebate rewards, which kicks in at a better rate after a certain amount of spending. I was just thinking I could probably do better. I’m not convinced I spend enough on groceries and gas to make MBNA worthwhile but this CapitalOne might be a great fit for my spending habits.
(Incidentally, I buy quite a bit of groceries at Shoppers Drug Mart — I’m guessing that doesn’t get tagged as groceries for the purposes of the MBNA card… Do you know if I’m correct on that?)
Thanks for the post!
@Dee – thanks for your feedback. The nice thing about both cards is there’s no annual fee, so just spend your normal amount on groceries with the Smart Cash card and then use Capital One Aspire for everything else and you’ll come out ahead.
I’m not positive, but I think all Shoppers Drug Mart purchases are categorized as groceries according to MBNA. I know any Superstore or Wal-Mart purchases are coded as grocery.
That is correct. Shoppers Drug Mart is not categorized as groceries. I shop there a lot and have never received 3% cash back for them. For that reason I always use my travel rewards card when purchasing stuff at SDM.
I keep meaning to get one of these but never make time for it :S. Thanks for the great analysis!
@CF – thanks! What are you waiting for? 🙂
For the PC mastercard are you looking strictly at cash back or PC point value? There is definite value in the PC point system, 20k points=$20.00 free groceries.
@Catherine – I converted the PC Points to cash, which is pretty straightforward. With the PC MasterCard, you get the equivalent of 1% back in free groceries, whereas with MBNA Smart Cash you get 3% cash back on grocery spending.
PC MasterCard fans are pretty die hard. I have a friend who has one and although he’s bright and I explained the huge difference in cash back to him he still chooses to stick with the PC MasterCard.
There is some attachment both he and his wife have to seeing the discount come right off their grocery bill that I can’t talk them out of 🙂
@SM – I agree, I used to be one of them 😉
PC Master Card offers double points on purchases made in their stores – gas groceries etc. All you have to do is ask.
Too bad, I already applied to the RBC Mastercard cash back two weeks ago, but anyway 2% is better than nothing, and far better than the RBC VISA rewards card…
Great post btw! It’s very useful to see how we can reap the benefits from these cards 😉
FYI – Just talked to MBNA and the limit of $1250 on the 1% cash back is not in addition to the Gas and Grocery cash back.
If you spend $1250 before any gas and grocery purchases no bonus given. If you spend $400 on gas grocery and then $850 on anything else you will have received the maximum points of 1650.. but you must max out gas and grocery first.
So like you said, use the SmartCash card for Gas and Grocery only and another card for everything else.
A 2 part question for Echo/anyone else who may know the answer.
Would prescription purchases at the Loblaws Superstore or Walmart qualify as “grocery” for the MBNA Smart Cash card, thus, giving 2% cash back?
I spend about $300 on presecription medications, but then submit the receipt to the insurance company for a 100% refund. So in theory, if it is 2% cash back, would I potentially get $6 from the card, plus the $300 back from the insurance compnay? I assume there is no way for the credit card compnaies to know I pay upfront for my prescriptions then submit it for a full reimbursement.
Thanks in advance for answering my question!
@Brian – I haven’t bought prescriptions at Superstore, but everything else we’ve bought there has been classified as ‘groceries’ and we’ve received the additional cash back.
I buy prescriptions at Safeway and I just checked my rewards tab and it looks like we get the additional cash back for those purchases.
I also pay in full and then get reimbursed and there’s no issue with the method of payment that I use.
@ Brian – Yes, prescription purchases at the Loblaws Superstore qualify as “grocery” for the MBNA Smart Cash card, thus, giving 2% cash back. In addition, you would get 1% superbucks coupon. Total 3% discount for prescription purchases at Superstore.
ONLY Walmart-Supercenter qualify as “grocery” for the MBNA Smart Cash card. I used to buy prescription drugs from Walmart but now I don’t.
Hi Brian
You say that you prefer the MBNA cash back cards. I agree that the 5% cash back on some items the first six months is compelling. However, the rules were, when I signed up, 3% back on gas and groceries and 1% back on everything else after the first six months WHICH MBNA LATER CHANGED TO 2% BACK ON GAS AND GROCERIES. I thought this was a bait and switch.
You also write in Oct 2012…
‘Unfortunately, Capital One discontinued its Aspire Cash World card, which paid cardholders 1.5 percent back.’
My experience was that I applied for and got a Aspire Cash World card in April 2013 and on my anniversary in April 2014 my 50% cash rewards bonus was $86.
I find that 1.5% back on everything trumps 2% back on gas and groceries and 1% back on everything else.
Also, I recall that MBNA hods on to your cash back until it reaches $50 then mails a cheque, even the federal government doesn’t mail cheques anymore.
Here’s something you may not know, Capital One uses their US Website to service Canadian card holders. As I happen to have both a Canadian and a US CapOne credit card, I need two logins and have to careful that I’m going to the ‘right side’.
Tom aka copingdaily
Hi Tom, I still have a grandfathered Aspire Cash card as well. It’s just no longer available for new customers.
I used to use the Smart Cash card in tandem with the Cap One Aspire Cash card, meaning I’d use Smart Cash for groceries and gas, and then Aspire for everything else in order to get the most out of the reward bonuses.
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