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Cash back credit cards are a type of loyalty program. Instead of collecting points towards free rewards such as travel, cardholders receive cash back. While this might seem impossible to imagine, credit card companies see the value in helping people grow their money, instead of just their debt. Here we look at the Best Cash Back Credit Card and further down everything you need to know about cash back credit cards to help you decide if they are right for you.
Apply for a Tangerine Money-Back Credit Card by July 5th, 2023 and earn an extra 10% back (up to $100) when you spend up to $1,000 in everyday purchases within your first 2 months.*
1.95% interest on the transferred balance for the first 6 months
Regarded as one of the best credit card in Canada, Tangerine Money-Back Credit Card provides no annual fee, a lucrative 2% cash back in up to 3 merchant categories, and 0.5% on all other purchases with no caps, tiers or limits. It provides choice, value and convenience to beginner credit card users and even works great as a secondary credit card.
The most notable feature is the cash back rewards. Who wouldn't want to earn money while they spend! In order to determine an estimate of how much you'll earn using this card, take your total credit card spending per month and multiply it by 1%. Typically, these card users average out to 1% cash back on purchases between the special 2% categories and 0.5% on all other purchases. If you spend $1,000 a month, you'll earn $10 ($1,000 x 0.01)!
Tangerine's Money Back Credit Card has lower than average fees as well. In addition, they are an excellent bank to work with since they're owned by Scotiabank. More often than not, Tangerine's clients benefit indirectly from Scotiabank's services without paying the big bank fees. That being said, Tangerine's services are so affordable because they don't offer in person services the way traditional banks do. If that's something you value, this card might not be right for you.
Wondering what's the difference between the 2 cards Compare the Tangerine Money Back vs World Mastercard®
While geared towards young people, the American Express Cobalt® Card has plenty features and benefits that make it appealing to a wide range of people. It offers 5x more points on eats and drinks from grocery shopping to dining out, and 2x points on travel and transit. Additionally, the ability to transfer points to hotel partners or to the Fixed Points Travel Program makes this the best travel credit card in Canada with a fee. If you spend a lot on food and travel, then this credit card deserves a place in your wallet.
The American Express Cobalt® Card started out as a credit card designed for millennials and young professionals. Today, it’s one of the most flexible and versatile credit cards out there. In fact, it’s now commonly used by people from all walks of life because of the lucrative benefits.
One reason the American Express Cobalt® Card is so popular is because of the quick rewards that come with it. Points can be earned on everyday purchases which is what makes the earnings accumulate so rapidly. On food and drinks, such as grocery, restaurant, food delivery, bar and cafe purchases, cardholders earn five points per dollar spent.
On transit and travel, cardholders earn two points per dollar spent. These rewards are not limited to vacation only, cardholders will earn points when they spend on public transit, taxis and Ubers too. All other purchases earn one point per dollar spent. As you can see, no matter what your lifestyle is, you’ll quickly rack up points!
Points can be redeemed to cover the cost of flights and accommodation with 1,000 points being equivalent to $10. Flights don’t have any blackout dates and you can choose any airline you’d like. In addition, the points can be used to cover fees and taxes. If you don’t have an upcoming trip, you can also spend your points on events through Ticketmaster at a rate of 2,000 points to $20. As you probably noticed, the rate of return is the same when you spend on travel and events which is fantastic! For less bang for your buck, you can also use your points for gift cards or merchandise purchases.
Cardholders benefit from travel insurance as well. The insurance covers things like travel accidents, car rental insurance, medical emergencies, flight interruption or delay among others. Last but not least, cardholders gain access to American Express Invites which are limited offer, exclusive events.
All of these benefits sound amazing but there’s a cost for all the wonderful benefits. There’s a monthly fee of $12.99, which works out to be $155.88 per year. The monthly payment makes it easy for most to manage. Also, you need to make between $60,000 and $80,000 per year and have decent credit. The only disadvantage is the cap rate on the bonus points is 30,000. Another downside to this bonus is the points can’t be redeemed in a lump sum. This means there is a delay between when you earn the points and when you can redeem them.
That being said, the American Express Cobalt® Card is still an excellent option for those who travel a lot and make lots of eligible purchases.
If everything about this card sounds good to you, sign up today and receive an extra 2,500 points each month you spend $500 or more, an achievable spending rate for most! You can earn up to 30,000 Membership Rewards® points.
If you are comfortable with shelling out a small fee of $99 per year, then the SimplyCash Preferred Card from American Express is one of the best cashback rewards cards. Those who want to maximize their rewards can take advantage of the limited-time 10% cashback rewards. It also offers a comprehensive insurance package that's worth more than $100 in value.
Why We Like It:
The SimplyCash Preferred credit card allows you to earn while you spend. There are no categories or limitations - wherever you spend, you’ll earn cash back with no earning caps. While the credit card does come with an annual fee of $99, you’ll benefit from numerous perks in addition to cash back.
SimplyCash® Preferred Card from American ExpressThe American Express SimplyCash Preferred Card offers cardholders an incredible range of benefits that include high cashback rates and a referral bonus. American Express offers exceptional customer service to its cardholders, with customer care professionals that are available to answer questions and deal with card problems, such as lost or stolen cards, 24 hours a day.
Features and Benefits of the SimplyCash® Preferred CardThe American Express SimplyCash Preferred Card is an excellent option for those who are looking for a generous cashback program. Individuals who travel frequently for business or pleasure can also benefit from this card's included travel insurance, which covers accidents, medical expenses, and even lost baggage. Although this card comes with great benefits, it's important for potential users to consider the downfalls, which is the fact that some retailers across Canada don't accept American Express cards.It is always good to have a Visa or Mastercard credit card as a backup.
If you’re looking for a straightforward cash back credit card - this could be an ideal option for you! With no annual fee, earn 1.25% cash back, obtain insurance coverage and access to American Express special events. This is an ideal credit card for individuals wanting to earn cash back without making a big commitment to an annual fee.
The American Express SimplyCash® Card features no annual fees and offers cardholders a flat, unlimited cashback rate. Just as with the SimplyCash® Preferred Card, American Express offers its members the opportunity to receive a generous bonus for referrals. Its customer care professionals are available around-the-clock to address cardholder concerns and fraud protection is included with every card.
Pros
Cons
The SimplyCash® Card from American Express is among the best choices for individuals who are looking for a cashback card that doesn't cost an arm and a leg. Because cashback earnings aren't limited with this card and the interest rate is reasonable, this card makes a great choice for everyday use. Those who travel frequently and require comprehensive insurance may want to consider upgrading to the SimplyCash Preferred Card, as the SimplyCash card's travel insurance benefits are limited by comparison.
For people who love to eat and drive, the Scotia Momentum VISA Infinite Card is the best rewards credit card with a fee. It provides an unrivaled 4% cash back on food and gas along with 2% on recurring payments and drugstore purchases, and 1% on the rest. On top of that, this card also comes with comprehensive insurance benefits and concierge benefits.
The Scotia Momentum Visa Infinite card was the winner of the MoneySense best cashback card with a fee in 2020 - and for good reasons! Card holders earn cash back on all purchases at varying rates. There are also other perks of card ownership including access to exclusive Scotiabank events and offers, plus ample insurance coverage.
With no foreign transaction fee and no annual fee in one credit card, what’s not to like about the Home Trust Preferred Visa? And because this is a no fee credit card, all benefits come free.
Why We Like It:
One of the most attractive features of the Home Trust Preferred Visa is the cash back rewards. Cash can be earned on all eligible purchases and there is no limit on how much cash you can earn. Your rewards are paid as a credit to your credit card statement annually (every January).
In addition to the lucrative cash back rewards, there is no annual fee for this card. There are also secondary benefits that card holders are eligible for including no foreign exchange fees.
The most notable of this list is the lack of foreign exchange fees. If you’re an avid traveler or do a lot of online shopping in foreign currencies, the Home Trust Preferred Visa is an excellent choice. Foreign transaction fees might seem like nothing, but they add up, especially when you factor in foreign exchange rates.
Not only is the Home Trust Preferred Visa great from a financial aspect, the bank itself has stellar ideals and makes it their mission to cater to their customers. They aim to provide financial services to individuals who don’t have a typical credit background and can’t reach their financial goals with traditional banks.
There are some drawbacks to using this credit card and working with Home Trust. For one, this card is not accessible in Quebec. In addition, the amount of transactions the cardholder can incur per day is ten. Most credit card users won’t exceed this limit, but it’s a hassle to always have it on your mind. The card also does not allow for tap payments and customer service is not available 24/7, only during business hours.
Overall, the Home Trust Preferred Visa is a phenomenal choice. If you’re an individual who travels a lot, this card is especially beneficial considering how rare no foreign transaction fees are in combination with no annual fee. Home Trust is a small, yet effective, bank that delivers to their customers.
This credit card has a close cousin which is the Home Trust Secured Visa.To get more information read our review on the Home Trust Secured Visa.
Earn extra Rewards
Boingo Wi-Fi for Mastercard®
On-Demand and Subscription Services
Mobile Device Insurance
The Tangerine World Mastercard is a new addition to Tangerine’s financial products. As with the Tangerine Money-Back Mastercard, there is no annual fee, 2% cash back on three categories and 0.5% cash back on all other purchases. Some of Tangerine’s spending categories include restaurants, furniture, groceries, gas, home improvement and entertainment.
Apply for a Tangerine World Mastercard® by July 5, 2023 and earn an extra 10% back* (up to $100) when you spend up to $1,000 in everyday purchases within your first 2 months.
The World Mastercard offers new perks to their customers that are not available to Tangerine Money-Back Mastercard users. Mobile insurance of $1,000, rental car insurance worth $65,000 for 31 days and Mastercard airport experiences are perks that cardholders gain access to. Both of these insurance packages are beneficial for individuals who have a smartphone and renting cars often. In addition, with the Mastercard LoungeKey membership, you can access airport lounges all over the world at a discounted rate.
All in all, the Tangerine World Mastercard is an excellent choice because of the cash back rewards and other perks. Start earning cash on your expenditures today!
Tangerine has two credit cards. The Tangerine Money-Back Credit Card and the Tangerine World Mastercard. Both offer no annual fee and a 19.95% interest rate. They offer purchase assurance and extended warranty on products fully purchased with their credit cards.
Tangerine also offers 2% Money-Back Rewards in two categories of your choice and 0.05% on all other everyday purchases. If you deposit your Money-Back directly into a Tangerine savings account, you unlock a third 2% Money-Back Rewards category. This credit card has no cap on the amount of Money-Back Rewards you can earn. The Tangerine Money-Back Credit Card is a great choice and is competitive with the credit card options of big banks. The Tangerine World Mastercard has added benefits and is harder to qualify for. Benefits include: Mastercard travel rewards, Mastercard airport experiences, mobile device insurance, car rental insurance, and worldwide wi-fi hotspot access.
To qualify for this credit card, you must have: a gross annual income of $12,000 plus, be the age of majority in your province or territory, be a permanent resident of Canada and be clear of bankruptcies over the past 7 years.
To qualify for this credit card, you must have: $60,000 plus gross annual income OR $100,000 plus household income OR $250,000 in Tangerine bank accounts. AND you must: be the age of majority in your province or territory, be a permanent resident of Canada and be clear of bankruptcies over the past 7 years.
Yes, Tangerine will do a credit check as you must agree to a credit check as part of your application process for either credit card Tangerine offers.
Tangerine pulls credit history and credit scores using the TransUnion credit reporting agency.
Tangerine does not provide information on their website about how to increase credit card limits. In most cases, maintaining a good payment history and low borrowing load will welcome credit increases. Often banks and creditors will offer regular increases without requests, but you will be asked and must approve these increases. If you would like a credit increase, you can call and speak to Tangerine’s client service representatives, who can walk you through their specific process and submit your request for a credit increase. Tangerine, like most banks, has an online credit increase form you should be able to complete and submit on your own too.
How can I apply for a Tangerine credit card?You can apply for a Tangerine credit card online, but you will need to register as a Tangerine client first. If you are already a Tangerine client, you can apply online or call now.
Wondering what's the difference between the 2 cards? Compare the Tangerine Money Back vs World Mastercard®
If you love to get a lot of cash back on your purchases and you want to see those dollars pouring in, then you'll simply love the Simplii Financial® Cash Back Visa* Card. This "simple" cash back card offers some of the best rewards on the Canadian market, giving you cash back of up to 10%.
This amazing card comes with no annual fee and allows you to add up to 3 additional cardholders. It offers you a wide range of rewards, including unlimited cash back, payment app integration, extended protection insurance, purchase security, and extras.
In terms of cash back, you'll earn 4% on eligible restaurants and coffee shops, 1.5% on groceries, pre-authorized payments, gas & drugstore purchases, and 0.5% on all other credit card purchases. You can quickly calculate your cash back with the tool on their website.
Optionally, you can add CIBC payment protector insurance and emergency travel medical insurance. To become eligible for this card, all you need to have is a minimum of $15k household income.
Neo Financial is a Canadian, technologically driven financial services company. They’ve recently partnered with Mastercard to offer their customers a cash back credit card. Cardholders earn the highest cash back when they spend with Neo Financial partners. Learn more below.
The Neo Card is ideal for individuals who live in urban areas. Neo Financial partners with thousands of restaurants, coffee shops, grocery stores and gas stations. If you don’t live close to the partner vendors, it’ll be challenging to take advantage of the cash back rewards. In addition, Neo Financial’s flexibility and no fees are beneficial for all users.
HSBC Cash Rewards Mastercard
The HSBC Cash Rewards Mastercard offers 1.5% cash back on online purchases up to $6,000. You can earn cash rewards at this rate on online subscriptions, food delivery and streaming services. Cardholders earn 1% cash back on grocery, gas and drug store purchases. Everything else yields cash back at a rate of 0.5%.
If you apply for the credit card before May 31, 2023, you can earn an additional 12.5% cash back* on all purchases for the first 180 days. The only limitation is a maximum purchase amount of $1,000. In Quebec, the HSBC Cash Rewards Mastercard special offer is slightly different. Apply before May 31, 2023, and keep your account open and active for 180 days to receive a $125 cash back bonus.
You can redeem your cash rewards at any time with HSBC. The only limitation is you must have earned a minimum of $25 in cash rewards before making a redemption. Cash rewards can be used as a statement credit or put towards a mortgage or savings account.
The HSBC Cash Rewards Mastercard doesn’t have an annual fee. The interest rate is standard at 20.99%. For balance transfers and cash advances, the interest rate is 22.99% (21.99% in Quebec). The credit card comes with additional perks and benefits, including mobile device insurance, extended warranty and purchase assurance. Cardholders have the option to add on travel and medical insurance with an extra cost.
Cash back credit cards pay users a percentage of the money they spend on the card. This works similar to a rebate program. In most cases card holders can expect to receive somewhere between 1 to 2% of their purchases. For example, if you were to spend $1,000 on a 1% cash back card, you earn $10. This type of reward program helps people in a number of ways including:
As a result, they have become a very popular form of reward credit card.
Most cash back cards require an average to excellent credit score to qualify. If you don’t have a credit history or have a poor credit score, chances are you might not qualify. Here are the basics of how cash back credit cards work:
Sign-on Bonuses
Some cards offer sign-on bonuses such as $200 for newly approved cardholders. However, these also come with requirements such as cardholders have to spend a certain amount of money by a certain date to receive the bonus. Another thing to watch for is the low introductory APR when you sign up. Once this rate expires you can face APRs ranging from 15% – 25%.
Annual Percentage Rate (APR)
Each cash back credit card has an APR that determines how much interest you pay. It’s always best to pay off your monthly balance on time each month to maintain a good credit score and avoid interest charges. If not, you basically cancel out anything earned in your cash rewards. Often the higher the cash back rate, the higher your APR.
Fees
These credit cards might apply various fees including:
Redemption
Cards redeem points in different ways including:
Most offer more than one option, so you can choose the one that suits your needs. You either cash out online or call their customer service line. When you redeem can vary based on timelines or minimum amounts. Some cards have expiry dates for cash points, while others hold your cash rewards as long as your card is active. Some cards have cutoff dates for cashing in, while others will automatically deposit your cash in your bank account at regular intervals like a paycheck.
Registering Online
Many cash back credit cards require to register online to earn special rewards. This includes special offers with retailers, accelerated rewards, earning points for certain categories, promotions, and more. To ensure you don’t miss out on rewards, read the registration instructions carefully and sign up to receive notifications for special promotions that require registration.
Most cards use a point system where points are added up and then converted into cash. Some features that differ among cash back credit cards include:
Some examples of Canadian cash back credit cards include:
There are many advantages to cash back credit cards including:
There are also some drawbacks such as:
First, do your research before applying for any credit card, as the more applications you fill out, the worse it can be for your credit score. Next, look for the card that offers lower APRs and higher percentages for their rewards. Avoid high annual fees, and also pay close attention to sign-up bonuses.
For example, a card might offer a very enticing APR for the first few months, but then that rate rises to an alarmingly high rate. Make sure you’ll use the card consistently and that the offering for rewards makes sense for your shopping habits for cards with categorized rates or that prefer certain retailers or services.
You’ll get the most out of a cash back credit card if you:
If this sounds like you, you will maximize rewards and avoid getting further into debt.
Cash back credit cards are the perfect choice for those who control their spending and pay off their monthly credit card balances. If not, you won’t reap the rewards and end up paying more in fees and interest than you receive in cash back rewards.
When Do I Get My Cashback?
It depends on the card. Some choose a cash back interval such as monthly or quarterly, while others offer automatic redemption when you reach a target balance.
When should you redeem cash back?
It depends on a few factors:
What's better points or cashback?
Since cash back is more flexible and easier to redeem, many people prefer this option. However, if you plan to travel, in some cases you get more bang for your buck with a travel points card that allows you to work towards a free or partially paid vacation. It really depends on your goals.
Are cash back credit cards worth it?
As long as you pay your balance off each month, a cash back credit card really is an excellent way to get a little extra money in your bank account or pocket.
Is cash back from credit cards taxable income?
No, in most cases, the CRA views reward programs as a discount, not income.
How to Maximize Your Cash Back?
You can maximize your cash back when you:
What is the best cash back credit card in Canada?
Scotia Momentum Visa Infinite Card offers:
What is the best no-fee cash back card in Canada?
Tangerine Money-Back Mastercard offers:
Mohamed Konate is a personal finance expert, blogger, and marketing consultant based in Toronto. He is a former financial services professional who worked at major Canadian financial institutions for many years. He managed the marketing strategy around various financial products ranging from credit cards to lines of credit. Mohamed is passionate about personal finance and holds a Bachelor's in Business Administration from the University of Quebec (Montreal) and a Master's in International Business from the University of Sherbrooke (Quebec). He is also the author of the Canadian Credit Card Guidebook and earns rewards with the American Express Cobalt credit card.