It was all about practicality when I applied for my first rewards credit card and started using it to earn free groceries. After a while I “graduated” to a cash-back credit card, which paid a higher percentage back on grocery and gas spending.

I liked the simplicity of funnelling my spending onto one no-fee cash back credit card and getting a little something back for my effort.

My attitude changed a few years later when I started doing research into travel rewards credit cards and other premium cards that came with loads of benefits along with an annual fee.

Rewards Credit Cards

What I found was that some credit cards offered better perks in certain spending categories, but not in others. I decided I could maximize my rewards credit card points by using one card for groceries, another one for gas, one for dining and entertainment, and yet another for everything else, including travel.

Finding the best rewards credit card

So I applied for many credit cards over the next three years. The type of cards that found their way into my wallet typically came with big perks; sign-up or welcome bonus points worth hundreds of dollars in cash or travel, annual fees waived in the first year, and the ability to earn more points at partner retailers when you used your card.

I guess you could say I got greedy. I was addicted to finding the best rewards credit card and racking up rewards.

Most cards wouldn’t last a year in my wallet before I ditched them and moved on to the next round of tempting offers. The rewards cycle went something like this: apply for a credit card, cash in on the bonus offers, cancel the card within 12 months (before the annual fee kicked-in), and Bob’s your uncle.

I eventually realized what a dangerous game I was playing and ultimately came to my senses. Dangerous because I applied for so many credit cards, and had access to so much credit, that my credit score took a major nose-dive (shameful for a personal finance blogger).

Besides, it was a royal pain balancing my budget every month with spending on multiple cards – each one with a different due date. Enough was enough.

This time I’d go back to funnelling all of my spending onto one card. But which one? I thought about the cards that had staying power in my wallet, the ones I held onto for longer than a year.

What did they all have in common? High earning rates in lots of spending categories, not just one or two. Flexibility when it comes to redeeming points, including the ability to book travel with any provider and use your points to cover fees and taxes. Outside of the box incentives help, too, like free checked bags, priority boarding, or a complimentary airport lounge pass for you and a guest.

That may sound like I’m being picky but Canadians are a rewards savvy bunch and many are also looking to get more from the credit cards they carry. According to a recent TD survey, cardholders want and expect greater choice and flexibility for what their reward program offers, as well as new and creative ways to earn and redeem points.

Sound familiar?

The same TD survey said many Canadians own more than one credit card, with nearly nine in ten (89 per cent) owning a least one card for an average of 1.9 credit cards each.

This humble blogger thinks Canadians are leaving money (rewards) on the table by not finding one program that meets their needs and then sticking to it.

Here’s the thing: funnelling all of your spending onto one rewards credit card is the best way to earn points quickly and maximize the rewards potential of that program.

Final thoughts

In today’s competitive travel rewards landscape, it shouldn’t be hard to find a rewards program that let’s you have your cake and eat it too.

But, as the TD survey says, with such a wide variety of rewards programs available, and so many ways to collect and redeem points, make sure you understand how the earning and redemption mechanics of the card work in order to get the maximum benefit from it.

My advice is to dig into your budget and understand where you spend your money (and how much you spend each month). Only then can you determine which credit card rewards program best matches your spending.

This post has been brought to you in partnership with TD. All thoughts and opinions are my own.

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14 Comments

  1. Debra Elliott on May 16, 2016 at 7:25 am

    Hi Rob, I noticed your comment about your Beacon score taking a nosedive because of too much credit available. My understanding of Equifax was that it works the opposite way: The more available credit you have , and the smaller the percentage of credit currently used, reflects well on your Beacon score. Of course if you were at high limits on all of these cards that would negatively affect your Beacon, but if you are playing the rewards game properly that would not be the case.

    Can you confirm ?

    • Echo on May 16, 2016 at 10:46 pm

      Hi Debra, it wasn’t so much the total credit available but the constant opening and closing of accounts that negatively affected the score.

  2. foolmenice on May 16, 2016 at 7:38 am

    Mr. Engen,

    I find it somewhat unconscionable that once again you have written a pro-rewards/cash back credit card article without mentioning that these “premium” card programs come at a substantial cost, which is borne by the merchants where you use them. In the past few years the outrageously high merchant processing fees that merchants were forced to pay for decades to accept credit cards had finally come down significantly, but not because the credit industry was being generous. It was mostly due to legal action, both actual and threatened, which forced their hand. These “premium” cards are simply the industry’s attempt to turn back the clock on these hard-won gains by merchants and consumers, as these cards fall outside the legislated fee caps imposed by governments, and once more reap billions in transaction fees for unwitting consumers, some as high as 6%, and the result is simply higher costs for everything you buy as the merchants must build these higher fees into the cost of their goods and services. The saddest part is that all consumers pay the higher costs resulting from the use of these “premium” cards, not just the people who use them.

    “Nothing of value is free. Even the breath of life is purchased at birth only through gasping effort and pain.”

    Robert A. Heinlein

    Ditto the “pain”.

    • Robb Engen on May 16, 2016 at 11:06 pm

      @foolmenice – You bring up a fair point about the broader impact of credit card rewards and higher prices, but this blog is about saving money not lobbying the government to lower swipe fees for merchants.

      Rewards cards help put money back into the hands of consumers, and while you can take the moral high ground by using cash or debit at a small business or mom & pop shop, I have a hard time feeling sympathetic about the credit card fees charged to big box retailers, airlines, hotels, etc.

      When I write about the high cost of investing in Canada, I tell readers about options to lower their fees, such as switching to low cost index funds and ETFs, or using a robo-advisor at a fraction of the cost of a full-service advisor.

      Does the system need to change so that fees aren’t so high to begin with? Absolutely. But readers are mostly interested in what can be done to save money today, not in the years or even decades it will take lobbyists and regulators to reform the system.

      • Paul N on May 20, 2016 at 3:30 pm

        Yes everything in life does have fees. Taxes are also fees. It’s the value vs. the effects of those fees which is debatable. For some, they feel the overall concept of a cash back card adds value, for others it simply adds pain to their lives. I still feel the the good outweighs the bad.

  3. Is it a need or a want on May 16, 2016 at 8:18 am

    I went with The PC Black World MasterCard. I pay it off every month and continuously pull my points. I have over so many years accumulated Shoppers points, when recently it was offered to me to convert them to,PC points at a rate of 8000 Shoppers = 10,000 PC I immediately transferred to redeem $130.00

    I like that PC posts spending in real time. You pump gas , you can see it on the statement immediately as a pending charge.

    I also have a CIBC Visa and am loath to use it. They take FOREVER to post spending or payments. I swear they want to confuse you in a shell game.
    Surprising since CIBC is the bank administering PC banking products.

    I follow Dave Ramsey’s comments that no person of wealth ever stated they got there as a result of their credit card use.
    I do believe that when you pay with cash it does make you think twice about (impulse) purchases.
    I have a zero based budget and so do put large items like insurance, repairs etcetera on my PC Card. I remove the ” money” earned through their points program from my grocery budget. Sort of a conversion to cash. I pay for my groceries with points and then physically have that “cash”saved in an envelope. In the last 18 months I have collected over $2250.00
    I do continue to collect air miles and aeroplan points. I am not driven to make special purchases just swipe in my everyday life. I have air miles coming in from my husband and In laws cards.They all funnel their points to one card that I hold and I redeem for travel etcetera. United it makes sense , individually the point accumulation occurs so slowly.

    Samething with Aeroplan. Recently I transferred 1500 points I was going to lose in July to my husbands account. Putting us over 25,000 points for an eligible round trip ticket. It seemed worth it in this case since he was so close to 25,000 points to pay the $30 to transfer my points.

    I did rack up points over two summers of travelling and staying at hotels for family weddings. Again , serendipitously a family member needed a hotel room in another city and aim was able to use them all out of my account before they expired.

  4. Alan on May 16, 2016 at 4:39 pm

    You’re probably right that you’re usually better off funnelling all your spending through one card, but I use four: Aspire Travel Mastercard for most purchases, Amazon Visa for non-CAD purchases since they don’t charge a 2.5% foreign exchange service fee, PC Mastercard for gas purchases for the 7 or 10 cent per litre superbucks, and a Canadian Tire Mastercard for the Canadian Tire money. Seems to work for me.

  5. Ron Sigal on May 16, 2016 at 6:16 pm

    If you have only one credit card and it gets stolen or otherwise compromised, you will be without any credit card until the new one arrives. I see no harm in having three cards: Capital One Aspire Travel World Elite card for general spending (2% on everything), Scotiabank Amex for gas, groceries, restaurants and entertainment (4% return in each of these categories), and the Amazon.ca card for foreign currency transactions. Many will also want to have a separate card just for business-related expenses.

    • Is it a Need or a Want? on May 17, 2016 at 8:53 am

      Sometime in the last 18 months my PC credit card was compromised and they IMMEDIATELY shut it down.
      I keep a stash of cash at home in small bills. (Think Fort MacMurray evacuation). I also have a debit card.
      I know people over the age of 50 who own no credit cards.When I travel many other countries prefer cash or use of debit.
      Here’s a suggestion for a column. The amount of people appearing to ” need” the gift cards of cash from the Red Cross in the Fort Mac evacuation. I realize most people won’t pass up ” free” money. Would be interested in knowing how many people were /are literally made homeless by the fire/ evacuation/loss of employment at this time.

  6. Maggie on May 17, 2016 at 8:44 pm

    I have only one card, a MasterCard, which for some reason has a ‘life span’ of only two years. So in January of the year that it expires in February, hotels in the US will not allow me to use it to book a room for a summer convention, because by then my card will have expired. This fall I will have to apply for a visa or similar so that it expires at a different time. I really don’t want two cards, but don’t see any way around it.

    • Echo on May 17, 2016 at 8:49 pm

      Hi Maggie, thanks for your comment. You bring up a very good point about having a back-up in case your main card expires or something goes wrong with it.

      I’d suggest getting something like the no-fee Amazon.ca Rewards Visa to use as a back-up. The nice thing about this card is that it doesn’t charge a 2.5% fee to convert foreign purchases back into Canadian dollars (nearly every other Canadian credit card charges this fee). So you’d have a good back-up card and one that you can actually make use of if you cross the border and make purchases in U.S. funds. It’ll save you 2.5%.

  7. Jason on May 19, 2016 at 12:57 pm

    I use 3 credit cards depending on the type of purchase I’m doing. CapitalOne Platinum Costco MasterCard (I use at Costco obviously + restaurants), AMEX SiplyCash (no yearly fee, decent cashback), and RBC Avion Platinum Business Visa (all business expenses + travel). I still have a Canadian Tire Options MasterCard, but I rarely use this one anymore.

  8. Hetty on May 21, 2016 at 11:26 am

    We only have 2 credit cards that give cash back, make sure we pay it off on time.
    I am surprised how little talk there is about the Rogers Credit card. Yes it is only good if you have a plan with Rogers as the rewards are only redeemable with your roger bill, but they give 1.75% cash back on EVERYTHING and there are NO foreign transaction fees.
    Tangerine is not as good as it sounds, but everyone is talking about it.

  9. Jan on May 22, 2016 at 10:45 am

    Over the last few years, I have cancelled my Aeroplan account because, when they started having expiry dates, I had enough points for a trip to Europe but couldn’t go before the expiry date so redeemed them instead, only to have Aeroplan reverse their decision a month later. Recently, my Airmiles points started expiring and again have enough points for my trip to Europe next year, but can’t go before December so I have had to take two shorter trips instead. I refuse to be held hostage to the travel rewards programs now. I have cancelled those credit cards and have signed up for a Tangerine cash back card, with the cash rewards going into my Tangerine savings account. I will save for my trip to Europe on my own. Everyone else has let me down.

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