A credit card with a good travel rewards program can earn you big perks such as free flights and hotel stays, which is why Canadians tend to prefer travel rewards cards over their cash-back cousins. But last year’s Air Miles debacle left customers with a bad taste in their mouths. Sure, earning travel points was easy. But redeeming them for something you want often left customers, well, wanting.

That’s why I expected 2017 to be a great year to sign up for a new credit card. Canada’s big banks and credit card issuers should have been champing at the bit and dangling all kinds of incentives in hopes of winning over disgruntled Air Miles customers.

Unfortunately, the year of the credit card started off with a whimper. Tangerine, which released its long-awaited Money-Back credit card to great fanfare last March, did an about-face and downgraded a bunch of perks and features.

Then just last week Chase Canada closed its Amazon.ca Rewards Visa to new applications. This card is particularly useful for those who travel and shop in the U.S. or abroad because Chase does not charge the typical 2.5 percent fee to convert your foreign currency purchases back into Canadian dollars. Another loss for Canadian consumers.

But there’s still hope for 2017 to turn out positively for fans of credit card rewards.

Recently, American Express – a company known for its generous credit card perks and incentives – upped the ante with its SimplyCash Preferred Card. The cash back credit card now gives 2 percent back in any spending category with no limits on how much cash back you can earn.

Top 3 Cash Back and Travel Rewards Credit Cards for 2017

Top 3 Cash Back Credit Cards

Here’s how I’d rank the top 3 cash back credit cards on the market today:

1. SimplyCash Preferred Card from American Express

  • 2 percent cash back in any category
  • Bonus: 5 percent cash back for the first six months (up to $300 cash back)
  • $99 annual fee

2. MBNA Rewards World Elite MasterCard

  • 2 points for every dollar spent (2 percent)
  • Bonus: 10,000 points after first purchase ($100)
  • $89 annual fee

3. Scotia Momentum Visa Infinite card

  • 4 percent back on groceries and gas. 2 percent back at drug stores and on recurring bill payments. 1 percent back on everything else.
  • Bonus: 5 percent cash back for the first 3 months (up to $150)
  • $99 annual fee

Top 3 Travel Rewards Credit Cards

On the travel rewards side, you’ll still find value in programs that offer strong base earnings rates along with flexible ways to spend points and miles.

Here are my picks for the top 3 travel rewards credit cards on the market today:

1. Capital One Aspire Travel World Elite MasterCard

  • 2 reward miles for every dollar spent (2 percent)
  • Bonus: 40,000 bonus miles – equal to $400 in travel – once you spend $1,000 on purchases within the first 3 months
  • Book your own trip – including the hotel, airline or rental car of your choice – then redeem your reward miles for your travel expenses
  • $150 annual fee

2. Scotiabank Gold American Express Card

  • 4 Scotia Rewards points for every dollar spent on groceries, gas, dining, and entertainment. 1 Scotia Rewards point for every dollar spent elsewhere
  • Bonus: 25,000 Scotia Rewards points – worth $250 in travel – when you spend $750 within the first 3 months
  • Book and redeem for travel anywhere, anytime, and with no travel restrictions
  • $99 annual fee (1st year free for new sign-ups)

3. BMO World Elite MasterCard

  • 2 percent back for travel on all purchases
  • Bonus: 20,000 welcome points – good for $200 in travel
  • VIP airport lounge access (over $200 US/year value)
  • $150 annual fee

Final thoughts on Cash Back and Travel Rewards

We can get better value from our credit card rewards by looking beyond traditional travel and airline points programs (such as Air Miles and Aeroplan).

Cash back credit cards have come a long way, with many of them offering earnings that rival or surpass so-called premium travel rewards cards on the market, without the hassle of blackout dates and restrictions.

Travel rewards programs such as Capital One Aspire, which allow cardholders to find and book the cheapest flights and hotels on their own and then redeem their reward miles against the charges afterwards, should become the gold-standard moving forward.

2017 can still be a great year to sign up for a new rewards card. Be patient and look for a card with a rewards program that best matches your spending habits – preferably one that offers a generous sign-up bonus, waives the first year’s annual fee, and makes it easy to redeem your points.

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12 Comments

  1. Mepo on April 14, 2017 at 9:32 am

    I’m surprised to see that your top picks all require an annual fee. Naturally, it depends on how much you charge to any card but I would have thought that for many the MBNA Visa with no annual fee would be a better choice. 2% at gas and grocery and 1% everywhere else. Why lay out $100 at the start of the year when you can start earning rewards instead?
    Or perhaps a Canadian Tire Mastercard. I understand that I have to spend my cash back at CTC but I have no problem finding things I need in their stores.
    Then there is the Capital One Costco card which gives good cash back. Only if you hold a membership – obviously.
    Lastly, I don’t see much use for an American Express card. There as so few places that accept Amex now. I used to travel with Amex all the time since they had offices in every country but those days are long gone. Add to that the downside of being identified as an American by carrying that card when you travel. If you don’t understand that last comment you only have to ask the multitude of young Americans why they have a Maple Leaf sewn onto their backpack.
    I have no idea why anyone would collect Air Miles or other travel rewards given the examples set by Aeroplan and now AirMiles. I wonder if the best way to make money out of AirMiles would be to short sell their stock.
    Given the differences in rewards that are offered to Americans on their credit cards, I can only presume that we Canadians are once again just too easygoing and the Credit Rewards market is quick to take advantage.

    • Echo on April 14, 2017 at 1:37 pm

      @Mepo – I’m just doing the math and coming up with the most lucrative cards in the market. It just so happens that they all come with an annual fee, although some charge less than others and if you’re lucky you can often get the first year free.

      No-fee cards at best pay 1 – 1.25 percent back. The ones I’ve highlighted pay back 2 percent or more. It’s up to the individual to decide whether he or she spends enough to justify an annual fee card – that includes taking a good look at your spending habits and which retailers and locations you shop at the most.

      For us we shop at No Frills and Costco – both of these retailers only accept MasterCard, so it doesn’t make sense to carry a Visa card. I do carry an American Express card because they tend to have ridiculously good sign-up bonuses and flexible ways to spend the rewards points.

      Finally, just a clarification on your comment: There is no MBNA Visa. I believe you’re referring to the MBNA Smart Cash Platinum Plus MasterCard. This was considered the best cash back card in the country at one time but when TD bought MBNA it slashed a bunch of the perks, including the amount of cash back you can earn. It’s now a decent no-fee card but you can earn more cash back with the ones I highlighted in the article.

      • Vi on April 16, 2017 at 4:08 am

        There is an MBNA Visa. It’s called MBNA SmartCash VISA Infinite. It’s what TD converted my MBNA Mastercard to, stripped the benefits (like purchase protection plan and rental car insurance) and made a generally worthless card to me. (I got it because of its excellent cashback feature and the fact it was a Mastercard since I already had a VISA).

        Thanks for this post. I have been wanting to replace it with a rewards Mastercard. The Capital One MC looks good and appropriate for me.

        • Echo on April 20, 2017 at 12:04 am

          It looks like existing MBNA Smart Cash ‘World Elite’ cardholders were converted to Smart Cash Visa Infinite cards near the end of 2016. It does not appear the Visa Infinite card open to new applicants, however maybe you first need to apply for the Smart Cash Platinum Plus and then ask to be upgraded to the Visa Infinite version.

          Visa’s ‘Infinite’ and MasterCard’s ‘World Elite’ are just premium versions of the rewards program available to high income earners. These programs offer several enhancements, VIP status, concierge service, etc. that are not available to regular Visa and MasterCard clients.

      • Ted on April 19, 2017 at 1:47 pm

        Two things – – first, MBNA does have a Visa Card – they forced me to take it by cancelling my MasterCard, near the end of 2016. I’m still “fighting” them for the cash-back I had earned on the card “they” cancelled – and, because the refused to let me keep my MasterCard, I got one from another bank.

        Second point – I just received a letter today telling me that, effective June 1st, the Bank of Nova Scotia is increasing the amount they charge to make international conversions, from zero percent to 2.5%. Another kick in the pants by the B of NS who, effective May 1st have also decreased the benefits of owning/using a Tangerine Card…

        The points brought up by Mpeo are excellent – – why should we pay to own a credit card?? The banks are already making billions of dollars because we’re using them.

  2. hetty on April 15, 2017 at 7:10 am

    I am always surprised that the Rogers MasterCard is overlooked. 1.75% cash back on anything! Yes, it goes towards your Rogers bill, but hey you have to pay that anyways and the fee is waived for there customers….

  3. Carrie on April 15, 2017 at 11:14 am

    I’ve been using the Canadian Tire MasterCard for years. I have a number of monthly bill payments go through it. The reward money adds up fast. My husband never has trouble finding stuff to buy there.
    I did have a Sears MasterCard that waived the foreign transaction fee. I used that for anything charged in foreign currency. When Sears divested their credit card, Scotiabank bought them out. I received a Scotiabank cashback Momentum MasterCard that waived the foreign transaction fees. I just received notice from Scotiabank that they are removing that perk June 1st. I am sorry to hear about the Amazon card no longer being available, I was thinking I would go with that next. I guess I will just stick with the Canadian Tire card and pay the foreign transaction fee. The Scotiabank MasterCard is coming out of my wallet as I am angry they removed the one perk that I cared about.

  4. Echo on April 15, 2017 at 1:23 pm

    My top 3 picks in each category were meant to reach a broader, more general audience. I made a conscious choice to avoid cards with rewards tied to specific retailers.

    That eliminated Canadian Tire, Rogers (which has little to no presence out west), WestJet, and even PC Financial. If you happen to shop regularly at one of these businesses then their rewards card might make sense for you.

  5. Mepo on April 19, 2017 at 9:37 am

    It’s great to see the experience of other users. I’m guessing we all share some frustration with the behaviour of Canadain Banks slashing away the benefits on various cards.

    I don’t agree with your decision to eliminate cards which are tied to specific retailers. That’s a decision for the individual. If one can honestly forecast that they can use those rewards without any coercion at the selected merchant, then they are probably by far the best value in a credit card today.

    The way I look at annual fee cards is that I have to spend about $5000 before I can justify that annual fee. After that, I begin to earn some cash. With a no-fee card, I’m busy collecting 1 or 2% on that first $5000.

    We hold several no-fee cards. We keep refusing to let them give us a higher credit limit for obvious reasons. Canadian Tire and Costco cards are the main ones we use. We get our cars serviced at Canadian Tire and they have served us well. We have no problem spending our rewards at their stores and garage. Costco gas stations always have the best prices on gas and they give a good discount to cardholders. We could take our rebate in cash back but usually, have no problem spending it in their store.

    I suggest that if more consumers refused to pay the banks for providing them with a credit card, the quicker we would see the banks start offering a more equitable deal.

    • Echo on April 20, 2017 at 12:09 am

      Hi Mepo, I get what you’re saying about annual fee cards however I think you’re falling victim to mental accounting. What matters is how much money you put back into your pocket at the end of the year, and if an annual fee card still gives you more money back (after paying the fee) then the card is worth applying for and using regularly.

  6. Mepo on April 21, 2017 at 6:33 am

    I agree. So do the mental accounting (or any other kind) and make the decision based on that. Also, compare the results using more than one credit card (especially if they a fee free) this will give you more options to choose from.

    Most of the people that I’ve helped have high hopes for the cash back they are going to receive but end up the year by running up a balance on their card and so lose in every way possible. It verges on insanity to carry a balance on a credit card at the rates they charge. There are other, better ways to get credit.

    I remember in the last forum on credit cards by Jacob, someone suggested that paying for a credit card is the wrong way to go. I could not agree more. You only encourage the banks by doing this. Two or more no-fee cards with cash back will beat out a fee card in most scenarios. But I agree, do the math!

    By the way. I am not employed by any bank or financial institution. I don’t receive any benefit whatsoever for making these posts.

  7. Brett on August 5, 2017 at 3:53 pm

    Just signed up for the Capital One World Elite card. Seems to be the best choice for us. Plus the $400. Bonus offer makes this a no brainer. Interested to see the credit limit. We need $15K.
    We will discontinue our CIBC Aeroplan cards ($170), and of course keep the Marriott card. Looked at the new no foreign fee visa Rogers card. We always use the free night at Marrioo, usually for a saving of 125-150 USD.

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