I’ve been a fan of cash back rewards for many years, and here’s why:
With cash back, you’ll know exactly how much your points are worth, plus redeeming your rewards is easy. Most cash back credit cards offer you the choice of a statement credit or a cheque in the mail, giving you full control to spend (or save) your rewards.
Cash back rewards have gained significant ground by going after consumers who are fed up with travel rewards programs based on their restrictions, booking fees, expiration policies and limited flexibility.
The allure of a “free vacation” keeps many consumers loyal to their travel rewards program, but for a growing number of Canadians, cash back is king.
An Amex study found that 79% of Canadians are interested in the idea of cash back rewards and recent MarketSense data found the cash back category has the highest growth rate for reward cards.
Cash back credit cards appeal to consumers who recognize the rational value of being rewarded with cash back on the purchases they make every day.
Consumers are looking for more ways than ever before to make their dollars work harder for them. A recent survey by American Express showed that while the vast majority of Canadians (92%) believe it’s important to shop around in order to find the best deals, busy schedules (29%) and lack of discipline (37%) are two of the top factors that make it difficult to shop around for good deals.
Related: Here are 35 ways to save money
But when you use a cash back rewards card it’s like getting a discount with every purchase. Here’s an example:
The average price of gas in Canada today is about $1.30 per litre. Let’s say it takes 60 litres to fill your tank – or $78. With a no-fee card like the SimplyCash Card from American Express, you’ll earn 5% back on eligible purchases at gas stations, grocery stores, and restaurants for the first six months (maximum $250 cash back). You also get 1.25% cash back on everything else you buy with the card – that’s a pretty great rate for a no-fee card.
Swipe your SimplyCash Card at the pump during that six-month period and you’ll get $3.90 in cash back – which saves 6.5 cents per litre on your purchase. That sure beats driving around town to try and find the cheapest gas station.
Related: 20 ways to save money on gas
How do Canadians reduce their everyday shopping expenses:
- 65% collect and browse through flyers
- 64% delay purchasing an item until it goes on sale
- 50% conduct online research to find the best price
- 48% clip coupons
Sound like fun? I didn’t think so.
With a cash back card, every dollar spent earns money back, regardless of where the card is used.