Our Top Credit Card Picks For 2017
Credit cards are a fact of life and depending on your point of view they’re either a necessary evil or a useful tool for building credit and earning rewards. We prefer the latter, which is why I’m always on the lookout for the best credit card offers.
But with seemingly hundreds of credit cards on the market aimed at everyone from low income college students to high-rolling frequent fliers, it’s almost impossible to anoint one card to rule them all. After scouring the market we identified five categories and named our top credit card picks for 2017:
Top Travel Rewards Credit Card
When it comes to travel rewards, flexibility is king. No serious travel miles collector wants to be handcuffed to one airline or one points program. They don’t want blackout dates or seat restrictions, and no milk-runs or red-eye flights.
That’s why our top credit card pick in the travel rewards category is the Capital One Aspire Travel World Elite MasterCard. The card offers arguably the best value for everyday travellers. Earn 2 miles for every dollar spent on the card. New sign-ups get 40,000 miles after spending $1,000 in the first three months. That’s $400 in travel!
Here’s the thing I love about this card: Book with any airline or hotel and then use use your miles to “erase” the purchase after it appears on your statement. There are no tiers – for example if you redeem a charge for $149 it will cost 14,900 miles, and if you redeem a charge for $550 it will cost you 55,000.
The downside: An $150 annual fee is on the high end of the travel rewards category. However, the 40,000 miles early spend bonus is more than enough incentive to give the Capital One Aspire Travel World Elite MasterCard a try as your everyday travel rewards card.
Top Cash Back Credit Card (Annual Fee)
Some people can’t be bothered with a travel rewards program and who can blame them after seeing the Air Miles expiry fiasco unfold last year. A cash back program is as straightforward as it gets. Simply use your card and earn a percentage back on every transaction, usually in the form of a statement credit.
Cash back rewards programs have increased in popularity in recent years and some cash back credit cards can be nearly as lucrative as their travel rewards card cousins. Our top cash back credit card is the Scotia Momentum Visa Infinite Card.
This cash back king offers a juicy 4 percent back on grocery and gas purchases, 2 percent back on drug store spending and recurring bill payments, and 1 percent back on everything else. While it does come with a $99 annual fee, the first year is free for new sign-ups.
The downside: While you can earn a lot of cash back with the Scotia Momentum Visa Infinite card, the program issues a statement credit just once per year.
Top No-Fee Rewards Credit Card
To some people the idea of paying an annual fee for a credit card doesn’t sit well. That’s fine, but recognize that your options to earn rewards decreases substantially when you move from an annual fee card to a no-fee card. And travel rewards? Forget it. No-fee travel rewards cards do exist but their benefits are so diluted that it’s not worth the trouble.
Stick to a no-fee cash back credit card. Our top pick is a relatively new card, Tangerine’s Money-Back Credit Card. The unique feature of this no-fee card is that you get to choose the categories in which you’d like to earn more cash back. Earn 2 percent in three categories if you want your rewards redeemed into a Tangerine savings account, or earn 2 percent in two categories if your rewards are deposited back onto your credit card.
New sign-ups get to earn 4 percent in their chosen categories for the first three months. Did I mentioned cash back programs were straightforward? I stand corrected.
The upside: A little-known feature of this card is that it charges just 1.5 percent on foreign currency conversions instead of the typical 2.5 percent that other major card issuers charge.
Top Welcome Bonus
Whether you’re a seasoned credit card points churner or just looking to test-drive a new rewards card, a strong welcome offer carries a lot of weight in your decision. A good welcome bonus offers $250 or more in value. Even better if the first year is free.
We found the American Express Gold Rewards Card ticked both of those boxes. New sign-ups get 25,000 Membership Rewards points after spending $1,500 in the first three months. Earn 2 points for every dollar spent. There’s no annual fee in the first year, but after that it jumps to $150/year.
The upside: Points can be transferred 1:1 to Aeroplan and 25,000 points is enough to redeem for a round-trip flight almost anywhere in North America.
Top Credit Card for Foreign Transactions
We mentioned earlier about foreign transactions and how nearly every credit card issuer charges an incredibly high 2.5 percent fee just to convert your foreign currency purchases back into Canadian dollars.
The upside: Earn 2 percent back on your Amazon purchases and get a statement credit each time your rewards balance reaches $20.
Final thoughts
As with most banking products we find that Canadians stick to what they know, which often means using a standard credit card issued by their main bank.
Consider switching to one of our top credit card picks this year and see the kind of earning potential you’ve been missing out on all of these years. Indeed, you can easily earn hundreds of dollars in a year in cash back or travel rewards simply by funnelling all of your everyday spending onto a good rewards credit card.
Readers: Do you agree or disagree with our selections? Are there any cards you would add to our top credit card picks for 2017?
We use the Scotia Visa Infinite for all Canadian purchases with great effect (like about $1000 per year after the yearly fee) and I don’t mind the single yearly deposit into our account as it forces a degree of meaningful yearly savings to be deployed effectively elsewhere at that time (last year we bought a new washer for instance). For a safety backup, we also have a Scotia No Fee Momentum Visa (pays 1% but it’s a “just in case” card). We also have the Tangarine card and have selected categories that our Scotia card does not cover so we don’t overlap cashbacks. When traveling in the U.S., we have a US bank account (Trustmark) and US cashback cards so we totally avoid exchange fees and an ever changing US/Canadian currency exchange at what is often unfavorable rates. We have a Discover card (offers 5% in revolving categories like gas, dining, amazon.com etc) and a standard “go to” card for everything else – Citibank Double Cash Mastercard (2%). We also have a Target Redcard – 5% off all purchases as well as free shipping. These are no fee cards as well. There are two other US cashback cards worth a good look (a Chase and an AMEX – both no fees) but we have found that they tend to often mirror the Discover card. This has worked very well for us and over the course of a winter stay in Florida (we have a condo), we probably earn about $500 US – all free money! By the way, we also use XE.com for cost effective money transfers from our Canadian bank account directly to our US bank account when/if needed, otherwise we use Interactive Brokers to “collect” US dollars at favorable exchange rates during the year. One other trick is to buy gift cards at grocers in Canada (like Home Depot, Cantire etc) using the Scotia Infinite card – you get 4% back as if it was a grocery purchase and then spend the gift card appropriately. Hope this helps others! Thanks for a fine investment blog by the way – great job!!
I received my Scotia Momentum Visa Infinite Card in Sept 2015. My statement credit was in November 2015. I had to pay the fee in September 2016 in order to get my credit of $170 in November. I could have made more money using my 2% cashback MBNA Smartcash card, so I called to cancel the Scotia card.
The good news is that I was able to have the $99 fee refunded since I cancelled so soon after paying it.
I don’t know if they deliberately structure the cash back credit to be after you have to pay the fee or if it is November for everyone, but there is a way around it.
Hi Stan, it’s November for everyone. I used that card for several years and my fee was due in February (the anniversary in which you signed-up), but the cash back got credited in November. When I switched to Capital One for everything I made a conscious decision to cancel the Scotia card in December, right after I received the cash back.
I personally prefer the MBNA Rewards credit card as my go to cash back credit card. 2% cash back across the board, no limits (unlike Scotia Momentum Visa), cash back once balance reaches $50 (not annually), a lower annual fee and a free supplementary card for spouses.
Hi John, thanks for sharing this. The MBNA Rewards World Elite MasterCard is also a great everyday card. The key difference between this card and the Scotia card is in your shopping habits. If you spend a lot on groceries and gas (and not at Costco, which doesn’t accept Visa), then the Scotia card is a better option. If you shop at places in which Visa is not accepted (Costco, No Frills), then the MBNA card is a better fit.
Exactly the reason why I went with MBNA Rewards World Elite. I shop every week at Costco and would miss the rewards if I went with VISA.
Unfortunately the Scotia Momentum being a VISA card does not provide a 4% cash back when you buy groceries at stores which are not considered grocers (like Walmart).
Hi Ray, that’s right. So if you shop a lot at those stores then it’s best to find a credit card that pays 2% back on every purchase, regardless of the category. Capital One Aspire Travel or MBNA Rewards would fit the bill.
Fantastic, I have two credit cards on this list for precisely the reasons you suggest, plus i just recommended another one to my daughter for her purposes.
I use the amazon.ca visa for only what they do well at, amazon and foreign exchange purchases, fantastic to have it. Very basic online site but enough to make it work.
I also use the Capital One Aspire Card for generating travel rewards. Paid for a VRBO rental last summer. Great web site, very functional. The rewards are a bit wonky though. While I’m sure airlines and hotels will show up as normal for redemption other things do too. I noticed recently a local bottle of wine I purchased at a niche shop showed up as a travel redemption.
Great article!
Thanks Ashley! I agree with your comments on the Amazon.ca Rewards Visa. I just wish they’d stop sending paper statements and go with an online statement (it’s 2017, after all).
I’ve also seen a liquor store purchase come through as “travel” on my Capital One rewards statement and I did some digging and found out that liquor store was actually owned by a nearby hotel. They must have used the same merchant code, or something. Who knows?
We’ve had the Chase Amazon for about 5 years and its worked great. Since February, 2016 there have been a number of “incidents” that are of concern. Over the past year we have had two separate instances, about 3-4 months apart, where we received calls from Chase stating that our cards (mine and my wife’s) had been compromised and necessitated issuing a replacement card. I received my card right away but my wife’s card was never received and necessitated a call to have it reissued. Recently, we had a situation where a US$ restaurant charge in October was not processed to our account until December – the US$ had appreciated about 4% in the meantime. I called Chase and they informed me that there was nothing they could do.
I recently was told that Scotiabank acquired the Chase’s Canadian card business in 2015 is this correct?
Hi Dan, thanks for sharing. As far as I know, Chase sold its Sears MasterCard portfolio to Scotiabank last year. Chase still issues Amazon.ca Rewards Visa and the Marriott Rewards Premier Visa Card here in Canada.
Thanks for the update.
Dan
Great article as usual. For foreign transactions, why not the Chase Marriott which is very generous with free hotel rooms as well?
I have the BMO World Elite Airmiles MasterCard, when you use in conjunction with your Airmiles card you can’t beat it. Yes, you are restricted to certain airlines.