Cash back vs. travel rewards: Which wins for families?

This post is sponsored by RBC.

Canadian families can earn hundreds—or even thousands—in credit card rewards each year. But when it comes to choosing a rewards card, one question matters most: cash back or travel rewards?

How to maximize credit card rewards for Canadian families

It’s true: the average Canadian household spends $3,169 per month on the categories most rewarded by credit cards. Here’s a breakdown according to Statistics Canada:

^{Source: Statistics Canada. Table 11-10-0222-01  Household spending, Canada, regions and provinces}

The average family also spends a lot on travel. According to Statistics Canada’s National Travel Survey, Canadians spend an average of $1,174 per person for trips to the United States and $2,199 per person on trips overseas. That works out to $4,696 and $8,796, respectively, for a family of four. Splitting the difference, we can estimate a rounded cost of $6,750 for a family of four to take a nice vacation. A quick search of the travel website Expedia confirms there are plenty of all-inclusive trips available within that price range.

By using the right credit card for your everyday spending, you can earn valuable rewards and cut down the cost of your family’s next trip. But should you use cash back or travel rewards? Let’s take a look.

Cash back vs. travel rewards: how they work

Many of the best credit cards in Canada offer either cash back or travel rewards.

Cash back credit cards, like the RBC Cash Back Preferred World Elite Mastercard, give you cash back on every purchase you make. For example, if a card offered 1.5% cash back, you would get $15 for every $1,000 you spent using the card. Families enjoy cash-back rewards because they’re simple and straightforward and carry a fixed value so you always know what you’re getting.

Travel rewards credit cards, like the RBC Avion Visa Infinite Card, give you travel rewards points on every purchase you make. For example, if a card offered 1.25 points per dollar spent, you would earn 1,250 points for every $1,000 you spent using the card. People like travel rewards because they can be redeemed in multiple different ways and help save money on travel.

Note: RBC Cash Back Preferred World Elite Mastercard is changing October 1, 2026

RBC is enhancing this card with unlimited cash back and new bonus categories (groceries, dining, gas, transit, streaming, and more at 3%), plus added travel and mobile device insurance. In exchange, the annual fee increases from $99 to $120, and the purchase interest rate rises from 20.99% to 21.99%. Cardholders will also gain more flexible redemption options (as low as $1, redeemable any time) starting December 2, 2026. See RBC's full details here.

Where cash back wins for families

Many families opt for cash-back rewards because they offer the ultimate flexibility: cash is cash and can be spent however you like. There are no blackout dates, no variations in value and no decisions to be made on how to extract the most value from your earnings.

Cash back may also be a better option if a trip isn’t on this year’s to-do list. Ratehub-owned MoneySense Magazine reports that rising fuel costs are causing uncertainty among travellers but notes that travel agencies have yet to see an outright downturn in bookings. 

Doing the math on cash back

One of the best credit cards in Canada with cash-back rewards is the RBC Cash Back Preferred World Elite Mastercard.

Before October 1, 2026: This card pays 1.5% cash back on all purchases, regardless of category, on up to $25,000 in annual spending. After that, you’ll continue to earn 1% cash back, with no limit on the total amount of cash back you can earn.

Based on an average spend of $3,169 per month, you can earn approximately $505.28 per year in cash-back rewards with this card. That’s enough to take care of the low $99 annual fee and leave you with approximately $406.28 to spend however you like.

After October 1, 2026: The card has a tiered structure with no annual spending cap: 3% cash back on groceries, dining and food delivery, gas and EV charging, transit and rideshare, and streaming and digital gaming, and 1% on everything else.

Based on the average spend of $3,169 per month (and the average monthly breakdown from above), a family's $1,387 in eligible 3% spending (groceries, gas, restaurants, ridesharing, streaming, and public transportation) would earn $41.61 per month, while the remaining $1,782 in other spending would earn $17.82 at 1% – for a total of approximately $59.43 per month, or $713.16 per year. That's enough to cover the $120 annual fee and leave you with approximately $593.16 to spend however you like.

Where travel rewards wins for families

Many families choose travel rewards because they carry a lot of value. The average value of an Avion point varies based on how you redeem it and can reach as high as 2.14 cents per point. 

Families also like travel rewards credit cards because of the additional perks they come with. The RBC Avion Visa Infinite, for example, comes with extensive travel insurance coverage as well as free nights, discounts, room upgrades and free breakfasts at over 900 Visa Infinite Luxury Hotel Collection properties around the world.

How many credit card points do you need for a free flight?

One of the best credit cards in Canada with travel rewards is the RBC Avion Visa Infinite Card. This card has a reasonable annual fee of $120 and offers 1.25 points per dollar spent on travel-related purchases and 1 point per dollar spent on everything else, plus a welcome bonus of up to 70,000 Avion points when you apply by November 25th, 2026.

Based on an average spend of $3,169 per month, you can earn a total of over 108,000 Avion points in your first year, including the welcome and anniversary bonuses plus the points earned on your everyday spending. That’s up to $2,314 toward your family’s next vacation – about a third of the total average cost for what families spend on travel, as identified above.

If you prefer a credit card with no annual fee, consider the RBC Ion Visa Card, which offers 1.5 Avion points for every dollar you spend on groceries, gas, ridesharing and streaming services, and 1 point per dollar spent on everything else. It also currently offers up to 14,000 bonus Avion points upon approval when you spend $500 in your first three months.

Based on a typical spending profile, you can earn over 50,000 Avion points in your first year using this card. That works out to as much as $357 worth of rewards for no annual fee (note that the ION and ION+ cards redeem rewards at a lower maximum rate of $10 to 7,000 points).

How to choose between cash-back and travel rewards

The choice between cash-back and travel rewards is a personal one, and it comes down to which type of program will offer you the best value. Ask yourself these questions to help narrow down your decision:

• Do you travel internationally at least once per year? If so, you might prefer a travel rewards credit card that can help you save money on travel and provide perks to make your next flight more relaxing.
• Do you enjoy strategizing on how to get the best value out of your rewards? If you get a thrill out of maximizing value, a travel rewards credit card is the right choice for you. If trying to figure out the best use of points gives you a headache, opt for cash back.
• Would you prefer a fixed value to your reward? If so, you might prefer cash-back rewards, although a few travel rewards programs offer points with a fixed value.
• Do you pay off your balance in full each month? If not, you may prefer to choose a credit card with no rewards at all. The RBC Visa Classic Low Rate Option offers a reduced interest rate of 12.99% which can help you save money on interest charges and pay off your balance sooner.

The bottom line

The choice between cash-back and travel rewards doesn’t need to be difficult. If you want to extract the most value from your rewards and travel on at least a semi-regular basis, travel rewards make the most sense. If you prefer a fixed value and don’t want to think about the math, cash back is a simple and easy alternative.

Also read:

• Low interest vs rewards credit cards in Canada
• Smart ways to use a student credit card in Canada
• How to book a dream vacation using only credit card points
• Choosing the right rewards path