Cash-back credit cards are like the little black dress of your wallet: with their practicality and versatility, they keep giving back. With this type of credit card you’re refunded a small percentage of every dollar you spend, either as a credit on your statement or a cheque in the mail.
As with all credit cards, you’ll only get the full value out of cash-back credit cards if you pay off your balance in full and on time every month. You should look for the best cash-back credit card that suits your spending habits and offers you the best return for purchases you’re making anyway.
For the new year, we’ve compiled a list of what we think are the five best cash-back credit cards in Canada:
Tangerine Money-Back Credit Card
We ranked the Tangerine Money-Back Credit Card as one of the best credit cards in Canada for 2017 for its flexibility. Many cash-back credit cards typically offer higher returns on groceries, gas, and/or drugstore only, but Tangerine’s card lets you choose your top spending categories from a broad selection: restaurants, grocery, gas, drugstore, entertainment, home improvement, hotel-motel, recurring bills, public transportation, and parking. It also has two big advantages over other credit cards: there’s no annual fee, and no limit on the amount of cash back rewards you can earn.
With this card, you’ll get 2% cash back in two chosen categories, and 1% cash back on all other spending. Cash back rewards are paid monthly, rather than annually, and you can opt to have it applied directly to your card balance.
This card also rewards you for saving: if you instead opt to deposit your cash back rewards into a Tangerine Savings Account, you’ll get a third category earning 2% cash back.
Scotia Momentum Visa Infinite
Another advantageous card is the Scotia Momentum Visa Infinite, which offers 4% cash back on the first $25,000 you spend on groceries and gas each year, 2% cash back on the first $25,000 you spend on drugstore purchases and recurring bills, and 1% cash back on everything else. If you pass the $25,000 spending mark, you’ll still earn 1% back thereafter in the four categories—hence the momentum.
The annual fee is $99, and is waived for new accounts opened by Jan. 31. With the ample 4% cash back rate, this is a valuable card for buying household essentials: for example, it would take $206 in monthly spending on groceries and gas to break even on the annual fee, or $412 a month on recurring bills and drugstore purchases (you can input your exact spending profile into RateHub’s handy rewards calculator). For couples or households with children who spend heavily in these everyday categories, the cash back rewards can add up quickly.
As with most fee cards, you’ll get access to Visa Infinite benefits such as concierge service, preferred rates and upgrades at hotels, and access to new restaurants and culinary events. As such, this card has a slightly higher income requirement compared to other cash back credit cards.
SimplyCash Preferred Card from American Express
The SimplyCash Preferred Card from American Express gives you 5% cash back on purchases within the first six months (up to $400), the only credit card in Canada to hit the 5% watermark in cash back rewards. After that you’ll receive 1.5% cash back (up to $100,000 annually), and 1.25% cash back on all purchases thereafter, with no limit on the amount of cash back you can earn at that rate. The card’s annual fee is $79. If you refer a friend, you’ll receive $200 cash back if they’re approved.
If you’re looking to pay down an existing credit card balance, new cardholders who apply online can also receive a 0% introductory interest rate on all credit card balances transferred to the card within the first six months. Note that a 1% balance transfer fee will be charged on the transaction amount.
If you find the different spending categories and tiers of other cash-back credit cards confusing and are looking for a straightforward card with a decent overall return, this is a top contender.
SimplyCash Card from American Express
Don’t let the “preferred” status of its sister card scare you away from this one—we named the SimplyCash Card from American Express the best no-fee credit card of 2017 for its simplicity and stellar returns. For the first six months, you can earn 5% cash back on grocery, gas, and restaurant purchases (up to $250). After the welcome rate ends, you’ll earn 1.25% cash back on all purchases, with no limit on how much cash back you can earn. Like the preferred card, it offers a 0% interest rate on balance transfers within the first six months, plus a 1% balance transfer fee. With no annual fee, this makes an ideal secondary credit card.
MBNA Rewards World Elite
The MBNA Rewards World Elite credit card gives you two MBNA Rewards points for every dollar spent on the card, equaling 2% cash back on all eligible purchases. This card sets itself apart from others in the cash back category because it’s basically several cards in one: besides turning your MBNA points into cash, you can redeem them toward travel, merchandise and gift cards, or charitable donations. There’s no limit on how many points you can earn each year.
The annual fee is $89, but is offset in the first year by the 10,000 bonus points (value: $100) you’ll receive when you make your first eligible purchase. Like the Scotia Momentum Visa Infinite, this card has a higher annual income requirement than other cards.
Still searching for the right card?
Fill out your spending profile and see which card comes out on top
- The Best Credit Cards in Canada for 2017
- What’s Your Credit Card Spending Personality?
- How to Pay for Thanksgiving with a Cash-Back Credit Card
Flickr: KMR Photography