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.
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|
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.
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).
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.