How You Can Become a Credit Card Expert

Craig Sebastiano
by Craig Sebastiano June 7, 2019 / No Comments

Before learning about credit cards, I had a rewards card that I rarely even used for travel. And I often redeemed the points for merchandise and gift cards (rookie mistake), but now I’ve learned the error of my ways.

I changed my approach and decided to use a couple of the best cash-back credit cards because it was simple and easier to understand. I became more cautious about what card I used and where. I was even mad at myself when I used the wrong card because I could have earned 4% cash back instead of 2% or 1%.

My strategy was simple. I used the Scotiabank Momentum Visa Infinite card for spending at grocery stores and on recurring bill payments (4% back). While it does have a $120 annual fee (it’s currently being waived for new customers), I made it back (and then some) every year. I could have signed up for a cash-back card with a lower fee or no fee at all, but I did the calculations and this card had the best return based on my spending.

Scotiabank Momentum Visa Infinite card

  • Annual fee: $120 (waived 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
  • Receive VISA Infinite benefits

The second card I used was the Tangerine Money-Back Credit Card, which was for entertainment, restaurants, and groceries (since not all groceries accept Visa). Having a bank account with Tangerine gave me an extra Money-Back category. While I only earned 2% back in each spending category, new clients can get 4% back in up to three categories for three months if they apply by October 31.

But I’ve decided to focus on earning travel rewards by using some of the best travel credit cards in Canada. To maximize your points, it’s best to wait to apply until there’s a deal, whether it be a great welcome bonus or a waived annual fee for the first year.

One great example is the BMO World Elite Mastercard. New clients can get a free sign-up bonus of 35,000 BMO Rewards points, plus the $150 annual fee is waived for the first year. You could apply for the no-fee version (the BMO Rewards Mastercard), but you’d only earn 20,000 points for signing up. By going with the World Elite card, you’ll get 75% more points in the same amount of time for free. It can often take a year or two to earn the same amount of points through everyday spending than it does when you get a welcome bonus—so it’s worth waiting for an offer.

BMO World Elite Mastercard

  • $150 annual fee (waived for the first year)
  • Earn 3 BMO Rewards points per dollar on travel, dining and entertainment purchases; 2 points per dollar on everything else
  • Earn 35,000 bonus points (value: $250) when you spend $3,000 in the first 3 months
  • VIP lounge access with the included Mastercard Airport Experiences membership, plus 4 complimentary passes per year ($140 value)

Some welcome bonuses can only be earned with a minimum spend. In that case, you may want to buy a gift card for a retailer you regularly shop at (such as a grocery store) in order to reach the minimum spending requirement.

You will also earn more points depending on where you use your card. For example, with the TD Aeroplan Visa Infinite Card, you’ll earn 1.5 miles for every dollar you spend on grocery, drug store, and gas purchases versus one mile everywhere else. With the BMO World Elite Mastercard, you’ll earn three points for every dollar spent on dining, entertainment, and travel purchases versus two points on everything else.

You can also earn more points by double-dipping. If you’re an Air Miles member and have an Air Miles-branded credit card, such as the BMO Air Miles Mastercard, you can earn more points in stores at a number of retail partners. Aeroplan and Air Miles also operate the Aeroplan eStore and airmilesshops.ca, respectively, which allow you to earn miles at many more online retailers. There are often bonus offers, too. Currently, a number of retail partners are offering up to five Aeroplan miles for every dollar spent until June 16.

The one thing to be aware of when joining a travel rewards program is that there can be a number of unexpected changes. Do your research first to see if points expire after a certain amount of time of account inactivity or if you cancel your card. Also, it may take more points to book during certain times of the year or points can be devalued at any time.

And make sure you learn how to get the biggest bang for your points. Redeeming them for gift cards or merchandise is often the worst way to use your points. Check out Ratehub.ca’s guides on the value of points (such as Air Miles or Aeroplan miles) to find out how to maximize your rewards.

Keep in mind that travel rewards cards aren’t worth it if you can’t pay your bill on time or when you carry a balance. If you have trouble paying down your balance every month, need to make a major purchase and don’t have the funds, or don’t have a line of credit, you should consider getting one of the many low-interest credit cards that are available.

These cards often have interest rates of less than 13%. Some of the cards with the lowest rates are the TD Emerald Flex Rate Visa Card, which is as low as 8.45% (depending on your credit history), while the MBNA True Line Gold Mastercard has a rate of 8.99%.

Before you choose the card with the lowest rate, keep in mind that if you intend to pay your balance off in a short period of time, it might be better to get a card that offers a promotional rate or low balance transfer fee. For instance, the MBNA True Line Gold Mastercard has a 0% rate on balance transfers for the first six months before the rate rises to 8.99%.

The bottom line

Becoming a credit card expert isn’t very hard to do. All you have to do is wait patiently for great welcome bonuses and first-year free offers, learn how to earn additional points without spending more, keep track of any changes to rewards programs, and maximize the value of your points.