How To Maximize Your Cash-Back Credit Card Rewards
Choosing the best cash-back credit card isn’t as simple as sitting down with your primary lender and choosing whatever credit card they offer you. I mean, you could go that route, but you would run the risk of choosing a card that’s inappropriate for your lifestyle and spending habits. This simple mistake could leave hundreds of dollars in rewards on the table every month. Fortunately, with just a few minutes of research and comparison shopping, you can choose the best credit card for your lifestyle and reap the financial rewards for your spending.Here are our top tips for finding the best cash-back credit cards to maximize your rewards spending.
1. Choose the right card for your spending habits
Unlike travel rewards credit cards, where you earn a certain number of points for every dollar you spend, cash-back credit cards offer different reward levels for different categories.
For example, the CIBC Dividend Visa Infinite card allows you to earn 4% cash back on your gas and groceries spending, 2% cash back on dining, transportation and recurring payments and bills, and 1% cash back on everything else. This rewards scheme makes the CIBC Dividend Visa Infinite an excellent cash-back credit card for anyone with significant grocery spending like families, or anyone who happens to commute frequently.
Best for Groceries & gas
based on spending $2,200/mo after the annual fee
- Earn rewards
1% – 4% earn rate
- Welcome bonus
$250
- Annual fee
see Details
Perks
Ratehub.ca’s 2023 Award Winner – Best Cash Back Credit Card
Welcome Offer: Get a first-year annual fee rebate and earn 10% cash back welcome bonus of up to $250 (first 4 statements)!†
- After that, get 4% cash back on eligible gas, EV charging and grocery purchases.†
- 2% cash back on eligible transportation, dining purchases and recurring payments†
- 1% cash back on all other purchases†
- Get cash back on demand – redeem your cash back at any time when you have a minimum of $25 through CIBC Online and Mobile Banking®†
- Save on gas with CIBC and Journie Rewards
- Link and use your CIBC Dividend® Visa Infinite* Card with Journie Rewards to save up to 10 cents per litre† at participating Pioneer, Fas Gas, Ultramar and Chevron gas stations.†
- This is a digital-exclusive offer.To be eligible for this offer: 1) this offer must have been directly communicated to you from CIBC or from a partner/affiliate; and 2) you must apply for the eligible card through the link provided in the CIBC or partner/affiliate communication to you.† This offer is reserved for you. Please do not forward it to anyone else.
- CIBC may approve your application, but you are not eligible to receive this Offer if you have opened, transferred or cancelled another Dividend card within the last 12 months.†
- This offer is not available for the residents of Quebec.
- †Terms and Conditions Apply
Features
Ratehub’s take
The biggest selling point of the CIBC Dividend Visa Infinite is its impressive rewards on everyday essentials. On top of the 1% earn rate for all purchases, this card earns 4% cash back on both groceries and gas purchases – the best on the market, for two of the most common spending categories for Canadian households.
Pros
- High earn rates on specific categories: Significantly higher earn rates on groceries, EV charging, and gas than most other cards (4% cash back)
- Redeem any time: Users can redeem rewards at any time as a statement credit starting in increments of $25
- Convenient payment option for large purchases: Access to CIBC’s Pace It program, allowing you to pay off large purchases in monthly increments
- Exclusive program access: Access to the Visa Infinite Program, entitling you to attend special dining events and hotel perks at participating hotels and restaurants
Cons
- Income requirement: The annual fee ($120) and personal income requirements ($60,000) may be prohibitive
- Limited insurance coverage: Insurance coverage isn’t as comprehensive as other similar rewards cards (if insurance is a priority for you, consider the cards featured on our list of best credit cards for travel insurance)
- Annual cash back is limited: While the points earnings rate is impressive, annual rewards at 4% and 2% are capped at $80,000 total, then you’ll earn at the base rate
Eligibility requirements
Minimum credit score: 725
Minimum income: $60,000/yr
Interest rates
Purchase interest: 20.99%
Cash advance: 22.99%
Balance transfer: 22.99%
Annual fee
$120
If you tend to spend more on restaurants than on groceries, a better option for you might be the SimplyCash Preferred Card from American Express. This credit card allows you to earn 2% cash back on all of your purchases, making it a great option for a variety of spenders, from entrepreneurs to power travellers.
Best for Everyday spending
based on spending $2,200/mo after $120 annual fee
- Earn rewards
2% – 4% earn rate
- Welcome bonus
$400
- Annual fee
$120
Perks
- In your first 10 months as a new SimplyCash® Preferred Card from American Express Cardmember, you can earn a $40 statement credit for each monthly billing period in which you spend $750 in purchases on your Card. This could add up to $400 in statement credits in the first 10 months
- Earn accelerated earn rates on eligible gas and grocery purchases
- Earn 4% cash back on eligible gas station purchases in Canada, 4% cash back on eligible grocery store purchases in Canada (up to $1,200 cash back annually) and 2% cash back on all other purchases
- Access events and special offers curated for Cardmembers with American Express® Experiences
- Extensive insurance coverage and 24/7 Customer Service
- American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information click the Apply now link. Conditions apply.
Features
Ratehub’s take
The SimplyCash Preferred Card from American Express offers a standard 2% cash back on everything with 4% on gas and groceries, plus top robust insurance coverage and all the benefits of American Express perks.
Pros
- Generous cash back rewards: Offers an impressive cash back rate of 2% on all purchases, 4% on gas and groceries up to $30,000 annually, and then 2% cash back on those categories
- Robust travel and purchase protection insurance: Comprehensive travel and purchase protection, including travel accident insurance, purchase protection, and extended warranty
- 24/7 concierge services
- Exclusive access: Enjoy privileges such as access to Front of the Line Presale and Reserved tickets to concerts, theatre performances, movie screenings, culinary events, and other special offers
Cons
- Limited acceptance: American Express isn’t as widely accepted in Canada compared to Visa and Mastercard
- Annual fee: The card comes with an annual fee, which could be a drawback for individuals who prefer no-fee credit card options, particularly as this card isn’t seen as the best cash back card on the market
- Low redemption flexibility: Cash back rewards are only redeemable once per year
Eligibility requirements
Minimum credit score: 725
Minimum income: N/A
Interest rates
Purchase interest: 20.99%
Cash advance: 21.99%
Balance transfer: N/A
2. Combine your credit card with a loyalty program
Many rewards credit cards are co-branded with loyalty programs such as Aeroplan, SCENE and Air Miles, but in some cases, you can double your points by using your credit card alongside your regular loyalty customer account. For example, your PC Financial Mastercard will get you Optimum points from shopping at any PC-affiliated retailer, but if you’ve also downloaded weekly deals onto your PC Optimum account using their app, you can extra earn rewards points on top of the base points from your card when you purchase those featured products.
3. Use your credit card for big purchases
This is true especially if the purchase lies within a category where you would receive a higher cash back rate or number of points per dollar. Taking the family out to a live event and dinner? If your rewards credit card card has high cash back for dining out and entertainment, reach for that instead of your debit card and reap the benefits. Just remember that it’s always a good practice to pay off large purchases on your credit card as soon as you can to avoid interest buildup.
4. Pay off your bill in full each month
Of course, all of the cash back rewards in the world won’t make up for the interest you’re charged each month if you don’t pay your balance back in full. With any credit card, it’s imperative that you pay off your balance in full every single month. Otherwise, you’ll incur interest charges which will wipe out any cash back rewards you earn.
5. Keep on top of your rewards
The cash back and points you’ve accumulated from using your card won’t do you any good if you’re not keeping track of how much you have. Check up on your rewards total each month and, especially if your rewards don’t expire, decide at what point you will cash in on all that loyal spending you’ve been doing. Perhaps you’re planning a big vacation or a party where you’ll have to pick up lots of supplies. These are perfect opportunities to use your cash back or bonus points.
Now that you know what you should keep in mind when choosing the right cash back credit card, use Ratehub.ca’s credit card comparison tool to help you determine which of the dozens of available cash back credit cards is the best choice for you and your unique spending habits.
Also read:
- How To Earn Cash Back For Your Summer Travel Plans
- Best Cash Back Credit Cards in Canada
- Credit Card Battle: Tangerine Money-Back vs. SimplyCash from American Express
Flickr: Yasmeen