[Video] How the BMO Rewards program works; everything you need to know

What are BMO Rewards points worth?

The BMO Rewards program is super flexible, letting you redeem points for travel (flights, hotel stays, cruises, and vacation packages), as well as gift cards, merchandise, and more. That said, not all redemption options are created equal, and depending on what you redeem for, you can get more or less value out of each of your points.

A key takeaway from the chart above is that BMO Rewards is first and foremost a travel program, as BMO Points are worth the most ($0.0071 each / 0.7%) when used to cover the cost of flights, hotels, and other travel expenses.

How to earn BMO Rewards points

You can earn BMO Rewards points with either one of two personal BMO credit cards: the premium BMO World Elite Mastercard or the no-fee, entry-level BMO Rewards Mastercard.

The BMO World Elite – which made our list of the best travel credit cards in Canada for 2020 – will earn you BMO Rewards points the fastest. With this card, you’ll collect:

• 3 BMO Rewards points per $1 on travel, dining, and entertainment purchases
• 2 points per $1 on everything else
• 40,000 point bonus: 30,000 points bonus when you spend at least $3,000 on the card within your first 3 months plus an additional 10,000 points after your first year.

Since 1 BMO Rewards point is worth up to $0.007 when redeemed for travel, that works out to a strong 2.1% to 1.4% return on most of your everyday purchases and a welcome bonus worth up to $250.

Rewards aside, you’ll also gain access to a slew of perks including airport lounge access (with four free passes renewed annually) that on its own is worth $140, along with robust credit card travel insurance benefits that includes up to $2 million in out of province medical emergency coverage.

The card does have a $150 annual fee, but it’s waived for the first year, and when considering the combined value of the welcome bonus, side perks, and strong everyday earn rate, it’s easy to come out well in the positive even when factoring for the annual fee. That said, there are some drawbacks to the card. For one, you’ll need to earn at least $80,000 (or $150,000 as a household) to get approved. Additionally, if you don’t spend much on credit or don’t travel enough to take advantage of its side perks, you may not earn enough value out of the card to offset its fee. It really comes down to your spending habits and how you plan on using your rewards points.

The other option is the BMO Rewards Mastercard. This card has no annual fee and will earn you:

• 1 point per dollar on every purchase
• A 10,000 points bonus after your first purchase and another 10,000 bonus points when you spend at least $1,000 on the card within your first 3 months

As an entry-level card, you won’t need to meet any specific income requirements to get approved or have to worry about spending enough to offset an annual fee. The included sign-up bonus is also easy to qualify for and is worth up to $140, which is objectively one of the most impressive credit card promotions for a no fee card in the market.

There are some tradeoffs to the card though, such as the fact it has no real side perks aside from the basics like purchase and extended warranty protections (which, all things considered, is to be expected from an entry-level card). The card’s earn rate of 1 BMO Rewards point per dollar also means you’ll earn up to a maximum return of 0.7% on your everyday spending. That’s somewhat lacklustre when compared to the best no fee credit cards in Canada, including BMO’s own CashBack Mastercard that’ll earn you a flat 1% cash back on all your purchases and also charges no annual fee.

How to Redeem BMO Rewards points

In order to redeem your BMO Rewards points, you must log in to your BMO Rewards account and either use their full-service online travel agency, shop from their catalogue of merchandise and gift cards, or exchange points for cash to invest or to pay off your card balance.

Redeeming points for travel (offers the best value)

When it comes to travel, you can redeem BMO Rewards points for flights on virtually any airline (including the cost of taxes/fees) with no blackout dates or seat restrictions, as well as hotel stays, cruises, and vacation packages. It’s this flexibility that makes the BMO Rewards program so popular.

You must make redemptions in increments of at least 140 points, which equals to $1 in free travel (works out to roughly $0.0071 per point).

If you don’t have enough points to cover the complete cost of a travel expense, you can apply as many points as you have and then pay off the remainder with your credit card. That’s good news since it means you won’t have to wait to rack up a giant bulk of points before you can start redeeming. Point values are always consistent when used for travel, so working out how much your rewards are worth is also straightforward. You won’t have to factor for value changes based on a redemption chart, seasonality, or your destination. Also, there are no restrictions on the number of points you can use towards a travel booking.

When redeeming points for travel, you are restricted to booking through the BMO Rewards Travel Agency. To book online, you must log in to your BMO Rewards account and use the bank’s proprietary travel search engine. You also have the option to redeem points over the phone by speaking with a BMO Rewards Travel Agent, but there is an additional telephone booking fee that’ll set you back $29.95.

The fact you’re forced to use the BMO Travel Agency and can’t apply points on travel purchases from another website is a drawback, but BMO does offer a price match guarantee. You could be reimbursed the difference if you find a cheaper price on a comparable flight, so it can be worth your while to shop around for less-expensive alternatives before redeeming.

Redeeming points to invest

If you want to use your BMO Points to invest for the future as opposed to save for an upcoming trip, you can redeem points for cash to invest in a BMO account.

Points can be redeemed for investments online in increments of at least 15,000 points for $100 (roughly $0.0067 per point). One important caveat to be aware of is that you must use a BMO investment account and can’t use points to invest with another online brokerage.

Redeeming points for gift cards

BMO Rewards points can be redeemed online at BMORewards.com for gift cards from a variety of major retailers, restaurants, and entertainment providers – ranging from The Gap and Best Buy to Costco, The Keg, and more.

For gift card redemptions, you typically can’t redeem points in increments. So, if a gift card requires 10,000 points, you’ll need to have accumulated all those points already.

The exact amount of points needed for a gift card redemption can vary depending on the gift card amount and provider. For instance, a $25 gift card from The Gap requires 5,000 points meanwhile a $25 gift card from Cineplex requires 5,550 points. All that said, you’ll generally get about $0.0040 to $0.0055 per point when redeeming for gift cards – which is less than what you would get when redeeming your points for travel.

Gift card redemptions can take up to 48 days to process, and while they’re shipped as soon as possible, it can take up to 3 to 6 weeks for a gift card to arrive in your mailbox.

• Also read:The best ways to redeem credit card points

Redeeming points for merchandise

The BMO Rewards website has a huge catalogue of products that you can redeem points for – from electronics and jewellery to kitchen appliances, beauty accessories, and toys.

Working out exactly how much value you can get on merchandise redemptions can be a bit tricky since point values can vary depending on what you redeem. That said, you’ll typically get a similar value for merchandise redemptions as you do for gift cards (around $0.005 per point), but again the numbers will vary by product.

You’ll need at least 80% of the required points to make a merchandise redemption. As BMO’s terms and conditions put it: “If that new handbag or golf club is 5,000 points, you only need to have 4,000 – you can purchase the last 1,000 points with your BMO Rewards credit card.” Effectively, you can buy points to cover the difference if you don’t have 100% of the required points.

Similar to gift cards, merchandise redemptions can take up to 48 days to process, and while shipped as soon as possible, can take up to 3 to 6 weeks to arrive.

Redeeming points for cash credit

By far the least effective way to redeem BMO Rewards points involves using points to pay off your monthly credit card statement. To go this route, simply visit the BMO Rewards website, click the Points for Cash tab, and exchange points in increments of at least 15,000 points for $50 in cash credit. On a per-point basis, that works out to a lacklustre $0.0033 per point. If you’re primarily looking for ways to save on your day-to-day card purchases, you’re better off not using a points credit card and getting a cash back credit card instead.

BMO Rewards program pros and cons

The pros:

• You can redeem points for flights on virtually any airline with no blackout dates or seat restrictions.
• When redeeming for travel, point values remain consistent, making it easy to calculate exactly how much your rewards are worth. 140 points always equal $1, regardless of seasonality or travel destination. There isn’t an overly complicated redemption chart or map you have to follow.
• The redemption process is intuitive and you can use points to save on travel when you’ve accumulated as little as 140 points.
• You can use BMO Rewards points to cover the cost of taxes and fees.
• BMO does have a price match guarantee policy for travel redemptions, and you can receive a rebate if you show a cheaper flight from an eligible airline carrier or travel provider.
• BMO Rewards points don’t expire as long as your account is open and your credit card is in good standing.
• BMO Rewards offers an extensive catalogue of gift cards and merchandise.
• Outside of travel, the BMO Rewards program offers great value when points are redeemed for cash to invest in a BMO investment account.

The cons:

• You can’t use BMO points to save on a travel purchase you booked on your own from another travel provider and must use the BMO Rewards Travel Agency.
• BMO Rewards points cannot be transferred to another rewards program.
• Since point values remain consistent when used for travel, there’s no way to “squeeze” more value out of each point (i.e. strategically planning your trip during low season).
• If you want to book travel over the phone with a BMO Rewards Travel Agent instead of online, you’ll have to pay a $29.95 booking fee.
• Like most points programs, the value you get on merchandise, gift cards, or cash credit redemptions aren’t all that impressive.