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What's the best rewards credit card in Canada?

Take the guesswork out of finding your next credit card. In under 2 minutes, we’ll narrow down which cards offer you the best rewards and perks.

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Compare Canada's best credit cards

The best rewards cards with

all reward types

from

any annual fee
CardBest used forAnnual feeRewards
BMO CashBack MasterCard®

Groceries

CA$0

  • 3% groceries
  • 1% bills
  • 0.5% other
Get more details
MBNA Rewards Platinum Plus® Mastercard®

Everyday spending

CA$0

  • 2 pts/$1 for gas, groceries, restaurants
  • 1 pts/$1 for other
Get more details
Tangerine Money-Back Credit Card

Flexible spending

CA$0

  • 2% other
Get more details
TD® Aeroplan® Visa Infinite* Card

Aeroplan Miles

CA$120

  • 1.5 pts/$1 for gas, groceries, travel, pharmacy
  • 1 pts/$1 for other
Get more details

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Rewards credit card FAQ

Is a rewards credit card right for me?

What type of rewards can I earn?

Why do most rewards credit cards have an annual fee?

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Whether you want cash back or travel points, lounge access benefits or roadside assistance perks - there's a credit card out there that's right for you. Find it in under 2 minutes.

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How to choose the best credit card for you

Step 1: Check your eligibility

When you apply for a credit card, the card issuer (think companies like banks or credit unions who supply credit cards) will determine whether or not you’ll be approved based on two key factors: your income and credit score.

A card's income requirement (if it has one) is easy to find and usually clearly labelled on its application page or highlighted sometime early during the application process. If a card has no mention of any income requirements, it's safe to assume you won't need to earn a specific amount to get approved.

When it comes to credit scores, however, it gets a lot more ambiguous. That's because card issuers don't reference a specific credit score number as a requirement. It shouldn't come as a surprise though that the higher your credit score, the better your odds are of being approved.

As a rule of thumb, you'll generally need a great (720-799) or good (650-719) credit score to be approved for most credit cards. Meanwhile, if you have a fair credit score (600-649), your card choices may be more limited, and if your score is below 600 or you have a recent history of bankruptcy, you won't be approved for the majority of credit cards and may want to consider a secured credit card instead to help rebuild your creditworthiness.

Since credit scores play such an important part of the application process, it can be a smart move to be proactive and check your credit score before applying. Contrary to popular belief, checking your own score has no impact on your credit rating and you can easily find your three-digit score online safely, securely, and for free on websites like Ratehub.ca.

Proceed to step 2 if you have a credit score of at least 650; otherwise consider checking our list of the best credit cards in Canada for bad credit.


Step 2: Ask yourself - will you pay off your card in full or carry a balance?

There are generally two types of credit cards:

  • Cards that’ll earn you rewards
  • Cards that’ll save you on interest

Rewards credit cards

Rewards credit cards are, for obvious reasons, the most sought after. These credit cards will reward you every time you swipe, tap, or key-in your pin to make a purchase by offering either cash back, points, or miles that you can use to pay off your card statement or redeem for free or discounted flights, hotel stays, or merchandise. Depending on the rewards card, you can even access welcome bonuses that give you a bulk of rewards just for signing up, as well as side perks like travel insurance.

While rewards credit cards offer great value, you’ll only come out in the positive if you regularly pay off your monthly balance in full. If you don’t completely pay off your balance, interest will enter the equation, and, since rewards cards have high annual interest rates (around 19.99%), you could end up owing more in interest than you earn in rewards.

According to the Canadian Bankers Association, 70% of Canadians pay off their balance in full every month - avoiding interest charges.

Low interest credit cards

If you typically carry a balance from month-to-month or rely on credit as a back-up option to tie you over during a cash crunch, a low interest credit card will be a better fit for you.

While the majority of low interest credit cards don't offer rewards and provide few frills, their low interest rates (typically below 15%) will help you come out ahead if you do end up carrying a balance - especially when compared to rewards credit cards.

Paying off your balance in full is the best strategy, but if that’s not always an option, you should equip yourself with a low interest card.

Balance transfer credit cards

If you already owe a large balance on an existing credit card, a balance transfer credit card can be a great (albeit more niche) solution to save on interest. Balance transfer cards offer super-low interest rates for a limited time, letting you consolidate old debts and pay them off faster.

Proceed to step 3 if you pay off your balance in full; otherwise consider checking out our list of the best low interest credit cards in Canada.


Step 3: If you’re looking to earn rewards - decide between cash back vs travel vs store credit cards

If you pay off your balance in full every month and have set your sights on getting a rewards card, the next decision you’ll need to make is what type of rewards you want to accumulate.

Cash back credit cards

Who they’re right for: Cardholders who don't travel frequently and are looking for a straightforward way to save on everyday purchases.

The Pros 

  • Rewards are cash and can be used to save on your general spending (not just on travel or on select merchandise).
  • Calculating how much your rewards are worth is easy and redemptions are straightforward.

The Cons

  • Typically offer the same selection of bonus categories - like gas and groceries. It’s harder to find cash back cards that offer bonus rewards for every dollar you spend on purchases like flights, dining, or public transit.
  • Usually feature fewer side perks than travel credit cards.

Travel credit cards

Who they’re right for: As you can guess, these cards are geared towards travel savings and those who fly or stay in hotels at least once a year.

The Pros

  • Offer greater value on travel purchases and redemptions (like flights and hotel stays). 
  • Typically provide better side-perks, like more extensive travel insurance benefits with higher potential payouts and longer coverage periods.
  • Often include more lucrative sign-up offers and bonus categories.

The Cons

  • Depending on the points program, calculating exactly how much your rewards are worth can be tricky. 
  • Redeeming rewards isn’t as straightforward compared to cash back credit cards.
  • Travel card sign-up bonuses often have qualification terms (requiring you to spend a certain amount within a three-month time frame).

Store credit cards

A more niche option, store credit cards are offered by only a handful of major retailer brands (i.e. Canadian Tire) that are big enough to issue their own co-branded credit cards.

Who they’re right for: People who are loyal to a certain retail chain and spend big at those stores. 

The Pros 

  • Store credit cards can offer big savings when used at affiliated retailers.
  • Most have no annual fees.
  • Let you earn retail loyalty rewards everywhere you shop.

The Cons

  • Redemption options may be too niche for some, as points can only be redeemed for merchandise from select affiliate stores.
  • Rewards earned on purchases made outside of affiliate stores can often be lacklustre.
  • Typically lack welcome offers for new cardholders.

Proceed to step 4 if you’ve decided to go for a cash back or travel credit card.


Step 4: Identify your spending habits

How much do you spend?

If you use credit for the majority of your day-to-day spending, picking up a rewards credit card with an annual fee can be well worth it. Sure, you’ll have to pay about $120 or so just to carry the card, but in return, you’ll gain access to more rewards, bigger sign-up bonuses, and lucrative perks. Over time, those benefits combined can deliver far greater value than the annual fee.

For instance, the BMO World Elite Mastercard charges a $150 annual fee but offers three times the points on dining, entertainment, and travel purchases, two times the points on all your other spending, a 35,000 point sign-up offer, complimentary travel medical insurance, and access to airport lounges. It’s easy to see how you could come out ahead with this card, even when factoring for the annual fee.

That said, if you’re new to credit cards or just casually use plastic to pay for a few purchases (i.e. less than $500 every month), odds are, you won’t earn enough rewards on a card to offset any annual fee. Additionally, if you don’t value perks like travel insurance, a no fee card will be a better fit and help you avoid paying for perks that you won't be taking advantage of anyway.

What do you spend on the most?

The majority of rewards credit cards offer additional points, miles, or cash back on certain types of purchases - known as bonus categories. Depending on the card, bonus categories can range from the all-to-common gas and groceries to everything from recurring bills, restaurants, cafes, flights, hotel stays, and more.

You’ll want to compare your options and find a rewards card whose bonus categories align with your most common expenditures.

For instance, if you own a car and gas accounts for a big chunk of your monthly spending, you’ll want to consider a credit card that has gas as a bonus category, like the TD CashBack Visa Infinite, which offers three times the cash back (3%) for every dollar you spend at the pump. Meanwhile, if you don’t own a car and rely on public transit and taxis to get around, a card like the Scotiabank Gold American Express (that offers 3 times the points on daily transit) will be better suited to your spending habits. 

If you don’t spend a particularly large amount on specific spending categories and prefer simplicity, you can consider picking up a flat-rate card that offers the same rewards on all purchases with no bonus categories.

Where do you spend the most?

Certain groceries (like No Frills) only accept Mastercard, while others (Sobeys, Wholefoods, and Metro) accept all three major card companies including American Express. Some retailers are affiliated with loyalty programs (like Rexall and Air Miles), while certain airlines and hotel chains offer their own co-branded point programs (like Air Canada and Aeroplan or Marriott and Bonvoy). If you spend a considerable amount at a particular retailer or service provider, you’ll want to factor that into your credit card choice.

Proceed to step 5.


Step 5: Read up on credit card side perks

Beyond just points or cash back, many rewards credit cards come with perks that can offer huge money-saving potential. Depending on the card, that can range from everything from complimentary roadside assistance and airport lounge access, to hotel upgrades and no foreign transaction fees. While your choice of card may not necessarily hinge on these side benefits, they can help you narrow down your selection.


 

Cards summary (+/-)

Author bio

Luke Sheehan, VP of Marketing

As Vice President of Marketing at Ratehub.ca, Luke splits his time between coming up with ways to inspire Canadians to choose better personal finance and serving as our resident credit card expert. His insights and tips on credit card points programs, maximizing rewards and minimizing interest, and the major moves made by the big banks have been shared on CTV News, CBS News, Huffington Post, CP24, Newstalk1010, and more. Originally hailing from the United Kingdom, Luke made the move to Toronto in February 2012 as a member of the leadership team at Just Eat and has held senior marketing roles across a variety of sectors including e-commerce, real estate, and now, fintech.

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