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 hundreds 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.
The best cash back credit cards in Canada for 2020
|Best Cash Back Credit Card For||Credit Card||Annual Fee|
|Groceries and Bills||Scotia Momentum Visa Infinite (VIEW)||$120 (waived first year)|
|Flat-Rate Cash Back||SimplyCash Preferred from American Express (VIEW)||$99|
|No Annual Fee||Tangerine Money-Back Credit Card (VIEW)||$0|
|No Foreign Transaction Fees||Home Trust Preferred Visa (VIEW)||$0|
Best cash back credit card for groceries and bills
Winner: Scotia Momentum Visa Infinite
The Scotia Momentum Visa Infinite is one of the best cash back cards available in Canada for 2020. This card offers 4% cash back at grocery stores and on recurring bills, 2% cash back on gas and public transit (including taxis and Ubers), and 1% on everything else.
For a limited time, new cardholders will pocket 10% cash back on all purchases for the first three months.
The card has an annual fee of $120 that is waived for the first year. The purchase interest rate on this credit card is 20.99%, and you must earn $60,000 per year individually or $100,000 per year as a household to qualify for this card.
Why we like it:
While the ability to pocket 4% in straight cash on all your grocery and supermarket bills is arguably the card’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’s automatically charged to your card every month (think cable, phone bills, insurance, streaming services, and more).
The inclusive transit category means you’ll earn 2% on your commuting costs no matter how you get around (be it car, Uber, or public transit). The card also comes with cell phone insurance that’ll cover the costs of a lost or damaged phone provided you bought the device (or pay for the contract) on your card.
Last but not least: There’s the card’s welcome offer, which delivers a combined $320 in added value for new cardholders within the first year.
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 emergancy 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 waived for the first year.
Also consider: TD Cash Back Visa Infinite Card
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 $200). This card does have a $120 annual fee (waived 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:
Few credit card promotions let you earn cash back in the double digits, and in this case, it’s combined with a first-year annual fee waiver to offer new cardholders a bonus valued at $320.
The card’s included roadside assistance is also 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.
As highlighted above, this card comes with roadside assistance, which is a huge benefit for car owners. Additionally, it offers emergency travel insurance, concierge services, and the ability to redeem cash back flexibly at any time (provided you first earn a minimum $25 cash back).
Best flat-rate cash back credit card
Winner: SimplyCash Preferred from American Express
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. The SimplyCash Preferred has a $99 annual fee but no minimum income requirement to qualify.
Why we like it:
Right now, the SimplyCash Preferred Card from American Express is offering new cardholders 5% cash back on all purchases for their first six months (which is three months longer than most credit card welcome offers), up to a maximum of $300. 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 $99, not $120 like on most other premium rewards card.
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 suplementary 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 no annual fee cash back credit card
Winner: Tangerine Money-Back Credit Card
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:
- Drug Stores
- 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 statement period). 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.
Tangerine has always been a no-frills online banking solution, so it should come as no surprise that their credit card has few frills. 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 perks like mobile device insurance.
No foreign transaction fee cash back credit card
Winner: Home Trust Preferred Visa
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. This card does not have a minimum income requirement, however, residents of Quebec cannot apply.
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.
The card comes with rental car collision/damage/loss insurance of up $48,000 for 48 days.
Best cash back credit cards – honourable mentions
Rogers World Elite Mastercard
As far as credit cards go, the Rogers World Elite Mastercard doesn’t exactly follow conventions. For one, it’s made for high-income earners who make at least $80,000 annually (or $150,000 as a household) despite the fact it’s a no annual fee credit card. It also offers membership to Mastercard Airport Experiences even though it’s a cash back card and not a travel points card.
It’s these unique benefits combined with its strong cash back earn rate of 4% on foreign purchases, 2% on Rogers products and 1.75% on everything else that makes the Rogers World Elite Mastercard one of the best cash back credit cards in Canada, particularly for travellers.
Why we like it:
The fact this card has a base cash back rate of 1.75% is one of its most appealing features, especially when considering that cards typically have a base rate of 1%. The ability to earn 2% cash back on Rogers products is also a great perk for anyone who pays for Rogers or Fido services such as internet or cable.
In terms of travel, this card’s top feature is its 4% cash back rate on foreign purchases, which serves to offset the card’s foreign transaction fee for a net savings of 1.5% on every purchase made outside the country.
The Rogers World Elite Mastercard comes with a full suite of travel perks including out of province emergency medical coverage and trip interruption coverage as well as access to over 1,000 airport lounges worldwide (however, a fee of $27 USD applies per visit).
SimplyCash Card from American Express
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 good 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 with a competitive overall return. 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. This card also offers an attractive balance transfer option: 1.99% on transferred balances for the first six months. If you want a cash back credit card but don’t want to pay an annual fee, this is a great starter credit card.
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.
More about how cash back credit cards work
Surveys consistently show most people prefer cash back cards over travel rewards cards. The reason why really comes down to one word: Simplicity. Cash back cards are easy to understand (after all, the rewards are straight cash). In comparison, the points on travel cards, while lucrative, aren’t always as straightforward to use and their value can vary depending on whether you redeem them for travel, merchandise, or gift cards.
Cash back cards are also more flexible and can help you save on all your everyday spending – not just on an upcoming trip or for free merchandise from specific retailers. If you don’t travel at least once a year and don’t require the perks that come with a travel rewards card, then a cash back card is likely best for you.
Below, we break down some key facts everyone should know about cash back credit cards.
Types of cash back cards
Not all cash back credit cards offer their 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 but 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.
Also read: The best credit card combinations in Canada
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|
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 rewards 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.
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.
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.
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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