Fixed Value Rewards Cards
It seems that the best cards in Canada in 2013 are all in the category of “Fixed Value” Rewards. The value of your reward can be easily calculated, but often requires some stipulation such as having a travel purchase to redeem rewards against. This limits the ability to extract extreme value from these programs and also is difficult enough for lazy people to not redeem. As a result, these programs are likely to stick around for a while. In this category, we have the Scotia Amex Gold card well ahead of the competition, then a few cards that are pretty much neck and neck as 2% return cards. The top 5 get rounded out with the TD First Class Infinite Visa, which can be a competitive card if you bank with TD and you can get your annual fee waived.
The Top 5 Fixed Value Rewards Credit Cards in Canada are:
Top 5 Fixed Value Rewards Credit Cards
|1. Scotiabank American Express Gold
-4% back towards travel on gas, grocery, restaurant and entertainment
-$300 upfront bonus
-no annual fee first year
|2. MBNA World Elite|
|3. BMO World Elite|
|4. Capital One Aspire World|
|5. TD First Class Visa Infinite|
Cash Back Cards vs Fixed Value Rewards Cards
Something to think about is that the Fixed Value Rewards cards are very similar to the Cash Back credit cards. Since the value of the points is fixed at a certain dollar value, you always know exactly what the points are worth. Sometimes, the rewards come back in the form of a statement credit, which makes it feel very similar to “cash back”. Sometimes “cash back” cards will accrue points that will need to be turned into a statement credit through some request by the cardholder. As a result, I have decided to put together some restrictions.
A cash back card has the following requirements:
- You don’t need a specific purchase to release your rewards
- $50 or more in rewards can be redeemed for the best rate
Examples of Fixed Value Rewards cards:
- The Scotiabank American Express Gold card requires a travel purchase to release the rewards
- The MBNA World Elite points can be redeemed against a minimum $100 travel purchase at the best rate but can be redeemed for $250 statement credit at the best rate
Examples of Cash Back cards:
- The American Express Costco card accrues points until the end of the year when all rewards are paid out in the form of a cheque
- The Amazon.ca card accrues points for each purchase. When $20 of rewards are accrued (2000 points) a statement credit is automatically issued
1. Scotiabank American Express Gold
My Card Review
Scotiabank American Express Gold
|Rewards:||4 pts / dollar on gas, grocery, restaurant & entertainment 1 pt / dollar on everything else|
|Sign-up Bonus:||30,000 pts ($300) and First year free|
|Point Value:||1 pt = $0.01 towards travel (no restrictions)|
This is far and away the best credit card in Canada for a very large percent of people. You have the freedom to redeem your rewards for a credit any travel that you book independent of their program. You get a great return of 4% on gas, grocery and restaurant purchases. The insurance and benefits are great and the annual fee is lower than most cards in this category. The signup bonus of $300 (30,000 points) after first purchase makes this an easy choice as a card to apply for.
2. MBNA World Elite
MBNA World Elite
|Rewards:||2 pt / dollar on everything else|
|Sign-up Bonus:||10,000 pts ($100) and First year free|
|Point Value:||1 pt = $0.01 towards travel or statement credit|
This is a great card as a primary spender on non-category spending. You get 2 MBNA Rewards points / dollar spent, which works out to 2% return redeemed as a statement credit against a travel purchase made to your card. You can even redeem your points for cash (at the same rate as travel) if you have over $250 (25,000 MBNA points) worth of points. The insurance benefits are great and the annual fee is lower than most cards here at $79. The sign-up bonus of $100 and first year free makes this an easy choice to get. It is a Mastercard so widely accepted across Canada.
3. BMO World Elite
Application Link |My BMO World Elite Mastercard review
BMO World Elite
|Rewards:||2 pt / dollar on everything else|
|Sign-up Bonus:||30,000 pts ($300) & First year free|
|Point Value:||1 pt = $0.01 towards travel through BMO Travel|
This is another great card as a primary spender on non-category spend. This one also gets you 2 BMO points per dollar spent, which can be used towards travel booked through BMO’s travel agency. As long as you are willing to book through the BMO travel, which should have the same prices as Travelocity, you will earn 2% of your purchases back in rewards. This card is great on the travel insurance and benefits including 4 airport lounge passes every year. The annual fee is high at $150, but if you value the lounge passes, this easily pays for itself. In the first year, you get your fee waived and $300 of points after your first purchase.
4. Capital One Aspire World
Application Link | My Capital One Aspire World Mastercard review
Capital One Aspire World
|Rewards:||2 pts / dollar on everything|
|Annual Bonus:||10,000 pts (~$100)|
|Sign-up Bonus:||35,000 pts (~$350)|
|Point Value:||1 pt = $0.01 towards travel (within various restrictive tiers)|
This card used to be the best card in this category, but competition has actually pushed this card from grace. This card gives you 2 pts / dollar spent on all your spending, which can work out to up to 2% return against travel purchases. The only real issue with this card comes during the redemption of rewards. Capital One has a quite ridiculous redemption policy that charges you based on the specific amount of your travel purchase, based on tiers. If you redeem incorrectly, you could end up losing a lot in terms of rewards. Other than that the $120 annual fee is offset each year with 10K points. The card comes with a 35K signup bonus which can be immediately redeemed against a travel purchase up to $350.
5. TD First Class Visa Infinite
Application Link | My TD First Class Infinite review
TD First Class Visa Infinite
|Rewards:||3 pts / dollar on everything|
|Sign-up Bonus:||20,000 pts ($100)|
|Point Value:||1 pt = $0.005 towards travel (within various restrictive tiers)|
I have very mixed feelings about this card. This card has all of the insurance offerings and benefits of the higher tier cards mentioned above. The returns are lower than the above cards at 1.5% towards travel as a statement credit. The card comes with $100 worth of travel as a sign-up bonus. The reason that this card gets mixed reviews from me is that the annual fee is $120 and the benefits simply don’t warrant that, given the other cards out there. If you have an all-inclusive banking package with TD, then your $120 annual fee will be waived. Most people who are applying for the cards in this category should likely be able to fulfill the requirements of the all-inclusive banking package. If you are thinking of getting this card, I strongly suggest also setting up an all-inclusive banking package with TD and get your annual fee waived.
One benefit that you do get with this card is that flights booked through TD travel and charged to this card will earn you an extra 3% return (3% + 1.5% regular purchases = 4.5% return total). This would lock you into purchasing your airfare from TD travel, which is run by Expedia. This may sway this card to be the best one for you. Personally, I see this as a nice perk, rather than a real differentiation. As I mention in my travel basics section, there are ways to reduce your travel costs by using the right booking engine. The TD First Class travel bonus conveniently gives you the booking engine credit I allude to, and likely gives you a bit more than you could otherwise get. If travel is a major part of your budget, and TD travel is not more expensive than the price you could get elsewhere, then this perk is going to be valuable to you.