There has been plenty of upheaval in the rewards cards space over the past 12 months.  It started when TD bought MBNA Canada’s credit card business and promptly slashed the benefits on what was arguably the best cash back credit card in the country, the Smart Cash MasterCard.  More recently, Capital One discontinued its Aspire Cash World MasterCard, further reducing the choices for cash back rewards fans.

Related: Top Cashback Credit Cards In Canada

Those who collect travel rewards have seen a similar shake-up in the market, with TD and CIBC battling for the right to issue Aeroplan credit cards.  That fight ended this summer with both banks splitting the business; if you have a broader banking relationship with CIBC then you’ll stay put, otherwise you’ll move over to TD by the end of the year.

As usual, lost in the banks’ battle for more business are the actual consumers who will be affected by these changes.  Whether you prefer cash back or travel rewards, now’s the time to evaluate your rewards program because there are plenty of deals to be had.  So instead of waiting to see what TD and CIBC have in store for you in the New Year, you should check out what these rewards cards have to offer.

Capital One Aspire Travel World MasterCard

The flagship rewards card offered by Capital One is its Aspire Travel World MasterCard, which is ranked as the top travel rewards credit card in Canada by Rewards Canada and MoneySense.

You’ll earn two miles for every dollar spent with this card.  You’ll also get 35,000 bonus miles with your first purchase, which can be redeemed for up to $350 in travel.

The card comes with a $120 annual fee, but since you get 10,000 bonus miles each year on your card anniversary, your net annual fee is only $20.  You’ll need to earn $60,000 per year, or have household income of $100,000 per year in order to qualify.

Related: Best Travel Rewards Credit Cards In Canada

Capital One offers an easy way to redeem your miles with its No Hassle Rewards program.  That’s because you can book your travel with any airline or hotel and then just redeem your miles online.  Unlike other travel rewards programs, it’s not tied to any specific airline or travel centre so you can find better and cheaper flights and squeeze more out of your points.

One feature that makes this card stand out is that you can convert your miles to cash back – either with a cheque or a statement credit.  You’ll earn slightly less than if you redeem your miles for travel, but the rate of return on your spending is still higher than most cash back cards on the market.

This chart shows how much you’ll earn with the Capital One Aspire Travel World MasterCard (net of fees) based on spending $24,000 per year and whether you redeem your miles for cash back or travel.

Capital One Aspire Travel World MasterCard Year 1 Return Year 2 Return
Travel $930.00 3.9% $480.00 2.0%
Cash back $697.50 2.9% $360.00 1.5%

Scotia Momentum Visa Infinite

One of the few cash back cards worth paying an annual fee for is the Scotia Momentum Visa Infinite card.  I use this card personally because it pays the most cash back for categories like groceries, gas, recurring bill payments, and pharmacy purchases.

You’ll get 4 percent back for your grocery and gas spending, and 2 percent back for bill payments and for drug store spending.  You’ll get 1 percent back on the rest of your spending.

The annual fee is $99, which is less than most of the premium rewards cards on the market.  Because it’s an Infinite card, you’ll need to make a minimum of $60,000 per year, or have $100,000 in annual household income.

Instead of getting a cheque or a statement credit each month, your cash back rewards accumulate and then get credited to your account once per year – in November.

You’ll earn $471 per year when you spend $24,000 annually with the Scotia Momentum Visa Infinite, including $600 per month on groceries, $200 per month on gas, $200 per month on recurring bill payments, and $150 per month at the drug store.  That’s a return of 1.96 percent on your spending.

You can apply for the Scotia Momentum Visa Infinite card here.

MBNA Smart Cash MasterCard

Even though the Smart Cash card isn’t as good as it once was, I still recommend it as a good option for cash back rewards fans.  That’s because you don’t have to pay an annual fee and you don’t need to earn $60,000 per year to qualify.

Smart Cash still has a great bonus offer in place – it pays 5 percent back for six months on your first $400 per month of grocery and gas spending.  After the six month bonus period, you’ll get 2 percent back on your first $400 per month of grocery and gas spending.  You’ll also get 1 percent back on the rest of your monthly purchases until you’ve spent $1,250 – that’s the cap.

Related: Best No-Fee Cash Back Credit Cards

If you spend $1,250 per month, including a combined $400 on groceries and gas, you’ll get back $270 in the first year (a 1.8 percent return) and $198 in the second year and beyond (a 1.32 percent return).

Final thoughts

If you’re not satisfied with your travel rewards program because it’s too difficult to redeem your points and you’re not getting enough bang for your buck then consider switching to a more flexible program like Capital One’s Aspire Travel World MasterCard.

If you prefer to collect cash back, like I do, and you’re not earning more than 1 percent back on your spending, then the Scotia Momentum Visa or the MBNA Smart Cash MasterCard might be worth a look.

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15 Comments

  1. Jane Savers @ Solving The Money Puzzle on September 30, 2013 at 4:28 am

    These cards that require a minimum income of $60,000 to qualify for the benefits make me very angry. I just quit the TD Waterhouse brokerage because I don’t qualify for the low cost trades with them because I don’t have enough assets. TD wants me to pay $29 per trade while people with $50,000 in assets only have to pay $9.99.

    Very frustrating to be denied the best benefits. The rich get richer and I am left feeling that it is a form of discrimination.

    I will gross $52,000 this year.

    • Echo on September 30, 2013 at 9:01 am

      @Jane – You can blame the government for that one.

      The reason why everyone can’t get the best rewards cards is because the federal government introduced a voluntary code of conduct in 2010 which was designed to protect small businesses from rising credit card processing fees.

      Small businesses complained that they were being forced to pay more to process premium cards, so Ottawa decided that premium cards cannot be marketed to consumers unless they meet an income threshold.

  2. Hannah on September 30, 2013 at 5:33 am

    Banks are a business. They are in the business of making money for themselves. Always remember that. Do not become loyal to one. They are not loyal to you. Look around and choose the best for you. At this moment I have a basic credit card with no rewards system. I am a using cash for most purchases and this curbs my needs to buy. And that is what I most need right now. When I build up my assets again I will look around for a new rewards card, or maybe not. I haven’t decided yet.

    • Echo on September 30, 2013 at 9:03 am

      @Hannah – That’s true for most products and services. Unfortunately, your loyalty doesn’t get you the best deal, so you need to shop around.

  3. Denis on September 30, 2013 at 10:42 am

    I have a high fee credit card with a max limit of $1000.00. Even the fee for this card is not as high as the fees for the credit cards listed in this article.

    I pay cash for everything I can, as I know that it has been proven that we spend more (up to 30% more) when we use credit cards or even debit cards versus when we use cash. It just hurts more when we hand over those pieces of paper versus running the transaction thru the machine.

    I pretty much only use the card for transactions that typically can’t be done by cash, aka online purchases or car rentals. Many times, I make my payment within hours of doing the purchase as well, thereby ensuring that I will not have any interest due because I decided to only make the minimum payment vs paying it in full.

    So far since I got this credit card, I have not paid a penny in interest, and I want to keep it that way. This also means if I don’t have the money to pay “it” off at the end of the month, I can’t afford “it”, whatever that “it” is.

    I am sure that the credit card company is miffed that they are not getting 19.8% off me every month, but they ARE getting paid, and paid on time, vs so many others making minimum payments on tens of thousands and being late as a normal thing.

    Living below my means and loving it!

    • Echo on September 30, 2013 at 2:12 pm

      @Denis – If you’re using your credit card to collect cash back or travel rewards then you’d better be diligent about paying off your balance on time.One late payment or interest charge will more than offset any rewards you earn.

      I’m not convinced people pay more when they use plastic instead of cash, in fact I find the opposite is true for me.

      Bottom line: if you have a good handle on your monthly cash flow and track your expenses then a credit card is nothing more than a method of payment, and the only method of payment that pays you something back.

      • Denis on October 1, 2013 at 1:24 am

        I am not the one who did the research about people spending more on plastic than with cash. It was a magazine, (which my brain just won’t remember the name of right now go figure, but I think it was Money Magazine), and you have to figure that big companies such as McDonalds would do their own research as well. They were thrilled when they saw what was happening in their stores. People who carry cash might have a fiver in their pocket, and know that all they can buy is under $5 worth of food. Someone with a debit card might not be sure exactly how much they have, and so they might go into the rent money by accident, and the credit card person just won’t care as there is room on the card. It really is a different way of thinking, and so I want to keep every penny I can and not give it to a credit card company in interest.
        I am 51, with almost nothing in retirement because it all went to pay interest on credit cards for stuff I don’t now, and didn’t need then.
        So, now I hate owing people money, and look in the mirror and know why.

        YMMV.

  4. Keith Charles Cowan on September 30, 2013 at 12:18 pm

    We use Aeroplan and we redeem our points for Business Class travel to Europe, 80000 each return ticket. This is twice the Economy ticket but the cash cost for Business Class is 5 times so we get leverage on our points that way. So far so good….

    • Echo on September 30, 2013 at 2:15 pm

      @Keith Charles Cowan – Have you received any indication as to whether you’ll be moving to TD or staying with CIBC?

      You’ll get a good return when you redeem your Aeroplan miles for long-haul business class flights.

      • Keith Charles Cowan on September 30, 2013 at 7:09 pm

        Not yet but we have a significant amount invested with Wood Gundy so I expect we can stay with them.

        OTOH we have more invested with TD so we might get a better offer from them too, so we are hanging tough.

  5. dave on September 30, 2013 at 3:14 pm

    Hi,

    Just wanted to say keep up the good work, you’re awesome. Switched to capital one as it fits my needs better than aeroplan, never would have known if you didn’t highlight that.

    Thanks,
    Dave

  6. Daniel @ Urban Departures on October 1, 2013 at 8:09 pm

    I’m in the process of switching from my TD Visa Infinite to the Capital One Aspire World Travel after reading informative posts like these.

    Through my reading, it appears that the Capital One Aspire CC redemption scheme is tiered.

    For example, if the cost of travel is $150 you would require 15,000 points. If the costs are $150.01 to $350, 35,000 points would be required.

    Looks to me that if my ticket was $157, I would need to redeem all 35,000 points to cover the cost.

    I guess it’s a small price to pay compared to a $5000 minimum account balance to waive the $120 TD Infinite Visa fee.

    • Echo on October 1, 2013 at 9:04 pm

      @Daniel – There are some clever hacks you can apply to make sure you get the best value when you redeem your miles.

      For example, you can get your hotel to split up your bill so that one charge equals exactly $150 or $300. Then, when you log in to redeem your miles, you can realize the full value of your rewards.

      Check out the rewards demo on the Capital One website.

      • Daniel on October 2, 2013 at 8:11 am

        Thanks for the heads up!

  7. farcodev on October 6, 2013 at 1:45 pm

    I use a mastercard cash back since December 2012 and I will never go back.
    Receiving a % for standard consumption fees that is considered normally lost is really a great thing.
    I don’t pay any fee (never chose a card w/ fee is the first rule) nor any interest.

    People that have only trust in fiat money to pay their standard shopping are funny, because you know fiat money = credit since nothing is backed no more.

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