Canada’s 7 best cash back credit cards for 2020

Jordann Brown
by Jordann Brown September 11, 2020 / 10 Comments

Cash back credit cards do exactly what their name suggests: they refund a small percentage of your purchases either as a credit on your statement or as cash in your bank account.

Each cash back credit card available in Canada lets you earn certain percentages back for different types of purchases, so the right card for you should match your particular spending profile. For example, if you commute hunsdreds of kilometres per week and spend thousands on gas every year, a credit card that offers a high percentage of cash back on gas would be a great way to optimize your savings.

Cash back credit cards can be very lucrative, earning you hundreds in cash back per year, but you have to choose one that matches your purchasing habits. We’ve made a list of the best cash back credit cards in Canada for 2020.

Summary (+/-)

The best cash back credit cards in Canada for 2020

Credit card Best for Annual fee
SimplyCash Preferred from American Express (VIEW) Flat-rate cash back $99
CIBC Dividend® Visa Infinite* Card (VIEW) Gas and groceries $99 (rebated 1st year)
SimplyCash from American Express (VIEW) No fee cash back (flat rate) $0
Tangerine Money-Back Credit Card (VIEW) No fee cash back (bonus categories) $0
BMO CashBack Mastercard (VIEW) No fee cash back (groceries) $0
TD CashBack Visa Infinite (VIEW) Household spending & roadside assistance $120 (rebated 1st year)
Home Trust Preferred Visa (VIEW) No foreign transaction fees $0

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Best flat-rate cash back credit card

Winner: SimplyCash Preferred from American Express

  • Annual fee: $99
  • Earn 2% cash back on all purchases, with no limit on how much you can earn
  • Welcome offer: Get 10% cash back on eligible purchases for the first four months (up to $400 cash back)
  • Income required: No specific amount

Read in more detail (+/-)

The SimplyCash Preferred from American Express will earn you 2% cash back on all your purchases with no maximum to how much you can earn – that’s the highest flat cash back rate in Canada. If you’re looking for simplicity and don’t spend a disproportionately large amount of your budget on otherwise common spending categories – such as groceries or gas – this card is a great option. It also means you’ll rack up double the cash back on everything from online shopping and clothes to electronics, and more (spending categories that don’t get much love from most other cash back cards).

Why we like it:

Right now, the SimplyCash Preferred Card from American Express is offering new cardholders 10% cash back on all purchases for their first four months (which is one month longer than most credit card welcome offers), up to a maximum of $400. This offer, combined with the strong 2% flat-rate cash back on all purchases, makes this credit card a good option for high volume spenders. There’s also the fact its annual fee is just $99, not $120 like with most premium rewards cards.

Additional perks:

The SimplyCash Preferred Card from American Express provides you with extensive insurance coverage including travel emergency medical, flight delay, baggage loss, car rental collision loss/damage waiver, and travel accident insurance. Authorized users are free so you can pick up a supplementary card for a family member and earn more rewards at no extra cost. You’ll also have access American Express Invites, which unlocks front of line pre-sale and reserved tickets as well as access to exclusive theatre and show offers.

Best cash back credit card for groceries and gas

CIBC Dividend® Visa Infinite* Card

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  • Annual fee: $99 (rebated for the first year)
  • 4% cash back on gas and groceries
  • 1% on everything else
  • Annual income required: $60,000 (personal) or $100,000 (household)

Read in more detail (+/-)

At 4% cash back, the CIBC Dividend® Visa Infinite* is the industry champ for those looking to save on groceries and gas. It also earns the standard 1% on everything else.

The CIBC Dividend® Visa Infinite* has an annual fee of $99, which is below the average $120 charged by most premium cards. Plus, for a limited time, you can save with a first-year annual fee rebate.

In terms of redemptions, you’ll get your cash back rewards once per calendar year on your December statement.

The card does technically have an annual rewards cap, but the good news is it’s generously high and hard to max out. You’ll earn 4% on the first $80,000 in total card purchases per year or up to the first $20,000 spent on either groceries or gas. If you do cross $80,000 in total card purchases or $20,000 in either of the card’s two bonus categories within a year, your earn rate on all spending will drop slightly to 1%. Note though, this will reset every year in December. And with such high caps, odds are, you’ll earn the accelerated 4% on all or most of your grocery and gas spending.

Like with all Visa Infinite cards, you’ll need to earn a personal annual income of at least $60,000 or a household income of $100,000 to qualify. If you don’t meet that requirement, you can still technically qualify for the CIBC Dividend® Platinum Visa* ($15,000 household income required), which offers identical rewards but slightly fewer insurance perks.

Why we like it:

The CIBC Dividend® Visa Infinite* snagged a top spot on our list for three key reasons: 1. it earns an impressive 4% cash back on groceries and gas – arguably two of the most common spending categories; 2. its welcome offer includes a first-year annual fee rebatel and 3. its regular annual fee is just $99 versus the typical $120 compared to other cards in its class.

Additional perks:

The CIBC Dividend® Visa Infinite* comes with comprehensive insurance benefits including up to 15 days of out-of-province emergency insurance, flight delay and baggage insurance, and auto rental collision/loss damage coverage.

As a CIBC cardholder, you’ll also have access to the unique CIBC Pace It™ program. If you’re making a large purchase of over $250 and need the flexibility to pay it off gradually rather than all at once when your statement arrives, Pace It™ lets you pay it off gradually in instalments at a below-average interest rate of between 5.99% to 7.99% – depending on the timeframe. The ability to access such low rates on a rewards card is a unique selling point.

Best no fee cash back credit card (flat rate)

SimplyCash Card from American Express

  • No annual fee
  • Earn 1.25% cash back on all purchases
  • Welcome offer: Get 2.5% cash back on purchases for the first 3 months (up to $150 cash back)
  • Income required: No specific amount

Read in more detail (+/-)

If you’re interested in a cash back credit card but you don’t want to pay an annual fee, the SimplyCash Card from American Express is a great option. With this credit card, you’ll earn 1.25% cash back on every purchase, with no limit on the amount of cash back you can earn. Supplementary credit cards are free, and the purchase interest rate is 19.99%.

Why we like it:

With no tiered returns based on spending categories, the SimplyCash Preferred is a straightforward card that earns a strong and unlimited cash back rate on all types of purchases as opposed to on only a select few categories (like, say, groceries or gas). Not to mention, for the first three months after you sign up for this credit card, you’ll earn 2.5% cash back on all purchases, up to a limit of $150.

Additional perks:

Even though there is no annual fee, this credit card gives you access to some insurance coverage including travel accident insurance, zero liability, extended warranty, and purchase assurance. You’ll also have access American Express Invites, which unlocks front of line presale and reserved tickets and access to exclusive theatre and show offers.

Best no fee cash back credit card (bonus categories)

Winner: Tangerine Money-Back Credit Card

  • No annual fee
  • Earn 2% cash back on purchases in up to three categories of your choice, and 0.5% cash back on all other purchases
  • Income required: $12,000

Read in more detail (+/-)

The Tangerine Money-Back Credit Card is our pick for the best no-fee cash back credit card for its rich rewards rate and flexibility. This card lets you earn 2% cash back in two spending categories of your choice (or three categories if you also sign up for a free Tangerine savings account). The categories you can choose from include:

  • Groceries
  • Restaurants
  • Gas
  • Drug Stores
  • Entertainment
  • Furniture
  • Hotel/Motel
  • Bills
  • Home Improvement
  • Public transportation and parking (which includes road tolls, taxis and ride-sharing services according to Tangerine’s terms and conditions)

It’s also worth noting that you have the option to change up your 2% money-back categories at any time (changes will be reflected after one-to-two statement periods). For all other purchases, you’ll earn 0.5% cash back. This credit card charges a flat interest rate of 19.95% on purchases, cash advances, and balance transfers, and you’ll need to earn at least $12,000 per year to qualify. There is no limit on the cash back rewards you can earn, and supplementary credit cards are free for additional cardholders.

Why we like it:

The Tangerine Money-Back Credit Card is popular because you can choose the categories that you spend the most in, making this card highly customizable from customer to customer. 2% cash back is also one of the richest rewards rates on bonus categories for a no fee credit card. Your cash back will be applied to your credit card statements or deposited into your Tangerine Savings account on a rolling basis every month, so you won’t have to wait a whole year to reap the benefits of your savings.

Additional perks:

Tangerine has always been a no-frills online banking solution, so it should come as no surprise that their credit card has few side perks. That being said, if you have an income of at least $60,000, you’ll get bumped up to the higher-tier Tangerine World during the application process and can get additional benefits like mobile device insurance and rental car damage/loss waiver.

Best no fee cash back card (for groceries)

Winner: BMO CashBack Mastercard

  • No annual fee
  • Welcome Offer: 5% cash back on all purchases (up to $100) for first 3 months
  • 3% cash back on groceries and 1% on recurring bills ($500 monthly cap on each category)
  • 0.5% cash back on everything else

Read in more detail (+/-)

The no fee BMO CashBack Mastercard was completely overhauled in 2020, with a new rewards structure that earns impressive returns on groceries and an uber-flexible redemption system that lets you access your cash back rewards easily at any time of the year.

With this card, you’ll get 3% on your first $500 in grocery purchases each month. Since it’s a Mastercard, that means it’s accepted at virtually all grocery chains including No Frills and will even earn you the 3% bonus at Walmart Supercentres (which aren’t counted as groceries by either Visa or American Express). The one slight caveat is you’ll only earn 3% on your first $500 in grocery purchases each month, after which your earn rate will drop a few notches to 0.5%. But, the good news is this cap resets every month, and at $500, means you’ll earn 3% on the huge majority of your monthly grocery spend.

You’ll also earn 1% on recurring payments (up to $500 in spending each month) and 0.5% on everything else.

BMO’s cash back redemption process has also improved for the better this year. You can now redeem your rewards once you’ve accumulated as little as $1 at any time of the year. Plus, you can even set up your cash back to automatically deduct your balance every time you earn at least $25 in rewards.

Why we like it:

At 3%, the BMO CashBack Mastercard is the best no fee cash back card in Canada for groceries. Its redemption structure, which lets you access your cash back as soon as you accumulate $1, also can’t be beaten in terms of flexibility. Plus, the card has an easy-to-meet income requirement of just $15,000.

Finally, there’s the welcome bonus. You’ll earn a strong 5% cash back on all your purchases for the first three months or on your first $2,000 in card purchases (whichever you hit first).

Additional perks:

The card comes with a balance transfer offer of 1.99% for the first nine months (plus a flat 1% transfer fee), which can help you consolidate debts from your older cards. You can also nab up to 25% off car rentals at participating National and Alamo agencies and have access to the typical credit card frills like purchase and extended warranty protection.

Best cash back card for household spending & roadside assistance

Winner: TD Cash Back Visa Infinite

  • Annual fee: $120 (rebated for first year)
  • Get 3% cash back on gas, groceries and recurring bills
  • Earn 1% cash back on all other purchases
  • Welcome Offer: Earn 10% cash back on eligible purchases for first 3 months (on up to $2,000 in spending)
  • Complimentary roadside assistance and travel insurance benefits
  • Income required: $60,000
  • This offer is not available for residents of Quebec. For Quebec residents, please clickhere.

Read in more detail (+/-)

Gas, groceries and recurring bills (such as internet and cable) are among the largest expenses for the average Canadian household, and the TD Cash Back Visa Infinite Card has all three as its bonus categories earning 3% cash back. For all other purchases, you’ll get back a flat 1%.

As a new cardholder, you’ll also get 10% on all purchases for the first three months (up to your initial $2,000 in purchases). This card does have a $120 annual fee (rebated for the first year), but it also provides additional perks on top of its cash back rewards including travel insurance and roadside assistance benefits.

Why we like it:

Along with its strong earn rate and welcome offer, the card’s included roadside assistance is one of our favourite features. Typically an annual cost of $100, the card’s complimentary roadside assistance offers car owners with coverage for emergency towing, battery boosts, and more. You’ll also have the ability to redeem cash back flexibly at any time (provided you first earn a minimum $25 cash back) instead of only once a year.

No foreign transaction fee cash back credit card

Winner: Home Trust Preferred Visa

  • No annual fee
  • 0% foreign transaction fees on purchases abroad
  • Earn 1% cash back on all Canadian purchases, with no limit on the amount you can earn
  • Complimentary roadside assistance membership
  • Not available to residents of Quebec
  • Income required: No specific amount

Read in more detail (+/-)

The Home Trust Preferred Visa is a no fee, 1% cash back card that ticks off one of the most important boxes for travellers: it has no foreign transaction fees. So, unlike almost every other Canadian credit card, the Home Trust Preferred Visa won’t tack on an additional 2.5% fee on purchases made outside the country or in a non-Canadian currency.

One important heads up: while the Home Trust Visa Preferred doesn’t have an annual fee, if you don’t charge at least one purchase on the card within a one-year period, you’ll owe a $12 inactivity fee. The good news is this fee is extremely easy to avoid – just be sure to use your card at least once every twelve months.

Why we like it:

The card’s 1% cash back rate on spending in Canada combined with its no foreign transaction fees makes it a great all-around cash back card. Plus, since it’s free to carry, the Home Trust Preferred Visa can also act as a great back-up card to use just for when you’re travelling.

The Home Trust Preferred Visa is also one of the few no fee cards to offer a complimentary Roadside Assistance Membership, providing car owners with everything from emergency towing services and battery boosts to lost car key assistance, and more.

Additional perks:

The card comes with rental car collision/damage/loss insurance of up $48,000 for 48 days.



Best cash back credit cards – honourable mentions

Winner: Scotia Momentum Visa Infinite

  • Annual fee: $120 (rebated for first year)
  • Earn 4% cash back on groceries and recurring bills
  • Earn 2% cash back on gas and daily transit
  • Get 1% cash back on all other purchases
  • Mobile device insurance
  • Income required: $60,000

Read in more detail (+/-)

While the ability to pocket 4% in straight cash on your grocery and supermarket bills is arguably the Scotia Momentum Visa Infinite‘s best feature (and something no other cash back card can beat), the 4% on recurring bills is a standout feature too. Especially when considering recurring bills can count as almost any payment that is automatically charged to your card every month (think cable, phone bills, insurance, streaming services, and more).

The inclusive transit category will earn you 2% on your commuting costs no matter how you get around (be it car, Uber, or public transit). The card also comes with up to $1,000 in cell phone insurance that’ll cover the cost of a lost or damaged phone provided you bought the device (or pay for the contract) on your card.

Additional perks:

This premium credit card is backed with additional perks, including 24/7 complimentary concierge service, as well as access to the VISA Infinite Luxury Hotel Collection and the VISA Infinite Dining Series. It also provides comprehensive insurance coverage including travel emergency medical insurance of $1 million for up to 15 days, trip interruption insurance, baggage loss and delay insurance, and car rental collision loss/damage waiver insurance. The annual fee for authorized users is also rebated for the first year.

The Rogers World Elite Mastercard

  • Annual fee: $0
  • 3% cash back on USD purchases (0.5% after forex fees)
  • 1.5% cash back on all other everyday purchases
  • Income requirement: $80,000
  • Minimum spend requirement: You must charge at least $15,000 on the card to maintain your eligibility

Read in more detail (+/-)

The Rogers World Elite Mastercard is a great cash back credit card that only manages to nab an honourable mention due to the fact it has some peculiar quirks.

First, let’s touch on the good stuff. It earns a flat 1.5% cash back on all your everyday purchases in Canada and an accelerated 3% on purchases in US dollars (which works out to 0.5% after deducting the 2.5% in foreign transaction fees you’ll owe on international currencies). Like other World Elite Mastercards, it also offers a free wi-fi Boingo Membership along with up to 10 days in emergency travel insurance. All impressive features for a credit card with no annual fee.

There are drawbacks though.

For one, it’s got a steep $80,000 income requirement and while it’ll save you on purchases in US dollars, it’s not a true no foreign transaction fee card as you’ll still come out in the negative when making purchases in any other international currency. There’s also the odd fact it won’t earn any bonuses on Rogers payments – like cable or smart phone bills – even though it’s a Rogers branded card.

Finally, there’s its minimum spend provision. You are required to charge at least $15,000 in purchases on the Rogers World Elite each and every year. If you don’t meet that minimum spend, you’ll be downgraded to the less impressive Rogers Platinum Card that earns 1% on Canadian purchases and offers fewer side perks. This is the only mainstream card we know of with such a requirement.

More about how cash back credit cards work

Redemption process

Every financial institution has a different redemption process for its cash back cards. Scotiabank, Home Trust, and American Express will give you cash back once a year, Tangerine’s cash is paid out monthly, and TD allows you to use your cash back rewards as soon as you earn at least $25.

Credit card issuer Cash back redemption frequency
  • Once per calendar year in November
American Express
  • Once per calendar year in August
  • Once every month
  • Any time in increments of at least $25
  • Any time in increments of $1
Home Trust
  • Once per calendar year in January
  • Once per calendar year in December

As you probably already know, when redeeming cash back rewards, credit card companies won’t send you an envelope of literal dollar bills. Rather, your cash back will be applied as a credit on your card statement – reducing your balance and ultimately leaving you with more cash in your bank account.

Depending on the credit card, you may have additional redemption options. For instance, Tangerine Bank will deposit your cash back into a Tangerine savings account every month, where compound interest will help your rewards grow gradually over time. BMO allows you to redeem your cash back as a statement credit or directly deposit your rewards into either a BMO chequing, savings, or investment account.

Types of cash back cards

Not all cashback credit cards offer rewards on the same terms.

  • “Bonus category” cards are the most popular type of cash back cards and pay out more rewards on certain types of purchases (known as bonus categories) than what they offer on everything else. These bonus categories typically include groceries, gas, and recurring bill payments – though it can vary by card. By strategically picking a card whose bonus categories align with your most frequent purchases, you can earn considerably more rewards.

    For example: the Scotiabank Momentum Visa Infinite offers 4% on groceries and recurring bills, 2% on gas and daily transit, and 1% on everything else.
  • “Flat-rate” cards will earn you the same amount of cash back no matter what you buy. These cards are for the everyday shopper who prefers simplicity and whose spending doesn’t skew toward common bonus categories like groceries or gas.

    For example: the American Express Simply Cash Preferred offers 2% on all your purchases.
  • “Flexible bonus category” cards are like bonus category cards but with a twist – you’re not locked into pre-set categories by the card issuer and can choose your own. With the ability to pick your bonus categories, you can customize your card to more closely align with your particular spending habits and earn more cash back.

    Currently, the Tangerine Money-Back Credit Card and the Tangerine World Mastercard are both the only personal cards to offer this flexibility.

A popular tactic used by strategic shoppers is to carry a combination of card types to earn more rewards, and involves either: Pairing two cards that offer bonuses in different sets of categories or using one card with bonus categories and another with flat-rate rewards. Combine the right two cards and you can earn a higher overall rate of return than you would with just one.

Annual fees

There are a number of great cash back cards with no annual fee, such as the Home Trust Preferred Visa or the SimplyCash Card from American Express. However, cash back cards with an annual fee can be worth the cost because they offer more lucrative cash back rewards along with more perks.

If you use a credit card to pay for the majority of your everyday purchases, odds are you’ll walk away with far more value with an annual fee card (even after paying the fee). If you don’t use credit all that much or your monthly spending is below $500, a no fee card could be a better fit.

Annual fees on cash back cards are usually around $99 to $120.

Cash back welcome offers

If you pick up a new cash back card, there’s a good chance it comes with some kind of promotional offer.

The welcome offers on cash back cards don’t offer a one-time surge in rewards, but instead, let you earn an accelerated cash back rate for a limited period of time or up to a certain amount of spending. For example, while the BMO CashBack Mastercard lets you earn 1% cash back on all your purchases, as part of its welcome offer, you’ll get 5% cash back on your spending for your first three months up to a maximum of $100.

When comparing cash back welcome offers, it’s important to not only look at the accelerated cash back percentage but to dig deeper into the terms and conditions to see how long the offer lasts for and what it maxes out at.

As part of their offer, some cards with an annual fee will often waive it for the first year.

One of our favourite things about cash back welcome offers is they’re easy to take advantage of – you’ll just earn more cash per dollar on your everyday spending. In contrast, sign up bonuses on most travel credit cards come with minimum spending requirements (i.e. spending $3,000 within your first three months), which means you might not qualify for the offer if you don’t spend enough on the card fast enough.

One final note: While bonuses may be enticing, it shouldn’t be the only reason why you choose a cash back card. You should do the math to find which card works best based on your spending habits in the long-haul.

What’s better – cash back or points?

The reality is there’s no clear cut answer.

The biggest advantage of cash back is the rewards are simple, flexible, and consistent. The value of 1% in cash back always equals $0.01 – no matter what. Cash back rewards will help you save on all your everyday purchases charged to your card – not just on travel or merchandise and gift cards from specific retailers. Finally, redemptions are easy and often applied to your card’s statement balance automatically.

Points – on the other hand – are less straightforward but are potentially more lucrative, particularly if you’re a traveller.

Unlike cash back, the value of points isn’t consistent and vary depending on the loyalty program and what you’re redeeming. For example, 1 Scotia Rewards point is worth $0.01 when redeemed for travel rewards like flights, but that same point will be worth around 25% less when redeemed for a gift card and around 30% less for cash credits. With other points programs, like Air Miles and Aeroplan, the value of your points will even vary when redeeming for travel based on factors like your destination or whether you’re travelling during low or high season.

The key benefit of travel cards is they typically come with more bonus categories and perks, as well as larger welcome offers. Plus, depending on the travel card, you can redeem strategically and get well above the standard $0.01 per point, stretching the value of your rewards even further.

In short, travel points can offer great value, specifically when redeemed for travel rewards like flights and hotel stays. But if you want simple rewards, don’t travel frequently, and want the flexibility to use your credit card rewards to save on all your everyday spending, then a cash back card is a better fit for you.

Credit card insurance

Most cash back credit cards do come with a handful of insurance perks like rental car insurance, as well as purchase and extended warranty protection. Depending on the card, you may also get access to more niche perks like a complimentary roadside assistance membership or mobile device insurance.

When it comes to travel insurance, however, coverage usually isn’t as extensive on cash back cards when compared to their travel card equivalents.

For instance, while the TD Cash Back Visa Infinite comes with complimentary out of province medical emergency coverage, it only lasts for 10 days not 21 days like on most travel cards. The card also lacks certain types of travel coverage like trip interruption and common carrier accident insurance. Similarly, the Scotiabank Momentum Visa Infinite offers travel medical emergency for 15 days, not 25 days like on Scotia’s comparable travel cards. So if you’re looking for more travel coverage, you may want to consider a travel card instead of a cash back card.

Bonus categories

As we’ve touched on earlier, bonus categories are types of purchases that’ll earn you higher rewards per dollar and play a huge role in deciding which cash back credit card is right for you. For example, the Scotiabank Momentum Visa Infinite has groceries as a bonus category and earns 4% cash back on groceries versus the standard 1% it offers for most other purchases – making it an ideal match if you spend a lot at your local supermarket.

Whether or not a purchase falls under a specific bonus category has less to do with what you’re buying and more with who you’re buying from. That’s because the three big credit card companies (Visa, Mastercard, and American Express) categorize retailers and not the specific items they sell.

Below are some common bonus categories found on cash back credit cards.

Groceries encompass purchases from most grocery stores and supermarket chains – including food items (both groceries and pre-prepared meals), toiletries, cleaning supplies, and more. Virtually any grocery store that comes to mind falls under this category – like Loblaws, Metro, Sobeys, Wholefoods, and countless more. That said, some corner stores, discount groceries, and warehouse retailers may not count as groceries according to your credit card (and that includes Costco and most Walmart locations).

Gas is arguably the most straight-forward bonus category and includes virtually all gas service stations including Shell, Esso, Petro-Canada and more.

Recurring bills covers recurring payments that are set to automatically charge your credit card every month – including cable, smartphone bills, streaming services, and even insurance payments. Certain recurring payments may not fall under this category however – monthly gym memberships and certain insurance payments may not, for example. It all really depends on whether the company or service provider charging your credit card sets the monthly payment as a pre-authorized charge (PAC).

Dining generally covers most dining establishments (including restaurants, fast food chains, cafes, and delivery services). That said, with so many restaurants and cafes (several of which are independently run), not every location will have the correct designation. It’s also worth noting only a tiny handful of cash back credit cards – primarily Tangerine and Simplii Financial – have dining as a bonus category.

While on the topic of bonus categories:

  • Other common bonus categories include pharmacies, entertainment, and public transit.
  • You should always aim to find a credit card that offers bonus categories on the purchases you make the most often.
  • Credit card companies organize retailers based on four-digit merchant codes. Each card company has its own merchant codes system. For example, retailers with the code MCC 5411 are recognized as groceries by Mastercard. Your bank has no control over the merchant code system.

Credit card company

Generally speaking, you should choose a card based on its rewards and perks – not whether it’s issued by Visa, Mastercard, or American Express. If you regularly shop at Costco or No Frills, however, you’ll have to factor the card company into the equation since those retailers only accept Mastercard credit cards. The same holds true if you regularly shop at boutiques, small local eateries, or mom and pop shops, since many independently-run establishments don’t accept American Express as widely as Visa or Mastercard.

One popular strategy is to get two cards: One with an annual fee and one without. For instance, you can get a premium Visa or American Express card with a fee along with a no-fee Mastercard as back-up. Then you can maximize the amount of cash back you earn by using cards at different stores or in other categories.

Interest rates

Like all rewards credit cards, cash back credit cards have annual interest rates in the double digits – usually 19.99%. These interest charges can be completely avoided as long as you pay off your balance in full every month. But if you don’t, the interest you rack up will outweigh any cash back rewards you earn. If you anticipate you’ll regularly carry a balance month to month, consider a low interest credit card over a cash back rewards card – it could help your bottom line in a big way.

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