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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.
Earn an extra 10% back* for a limited time with a Tangerine Money-Back Credit Card.
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.
Get 0.50% money back on all other everyday purchases.
Money-Back Rewards are earned automatically and paid monthly, and can either be applied towards your Credit Card balance or redeemed into your Savings Account.
No limit on the amount of Money-Back Rewards you can earn.
Change your 2% Money-Back Categories to suit your everyday spending.
Optimizing your 2% Money-Back Categories to suit your everyday spending has never been easier. Choose your categories to earn the most money back.
Tangerine Money-Back Credit Card 2% Cash Back Categories:
Tangerine Money-Back Credit Card Fees:
The TD Aeroplan Visa Infinite Card is a versatile credit card that allows you to earn Aeroplan miles, get a comprehensive travel insurance package, and earn rewards at a decent rate. With TD being the official partner of Aeroplan, we consider this one of the best Aeroplan credit card in Canada. It targets members and gives double miles when used together with the Aeroplan membership card.
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:
SimplyCashTM Preferred Card Review
New SimplyCash™ Preferred Card from American Express Cardmembers can earn 10% cash back on all eligible purchases (up to $400 cash back) for the first 4 months of Cardmembership
• Earn 2.0% cash back when your Welcome Rate ends
• No limit to the amount of cash back you can earn after your Welcome Rate ends
• Access to memorable experiences with American Express Invites
• 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
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.
Earn Cash Back
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.
Great reasons to get this card for your everyday purchases
Earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). Plus, no annual fee in the first year, including on supplementary cards. A welcome offer value of $350*.
• 4% on eligible recurring bill payments and grocery store purchases
• 2% on eligible gas station and daily transit purchases
• 1% cash back on all other eligible everyday purchases
• Complimentary Concierge Services 24/7
• Visa Infinite Dining Series
• Visa Infinite Music Series
• Wine Country Wonders
• Luxury Hotel Privileges
• Comprehensive Travel Insurance & New Mobile Device 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:
The Preferred Visa from Home Trust is a great credit card that doesn't charge a foreign transaction fee, this card helps cardholders to save 2.5% each time they make a purchase in any foreign currencies either online or in store.
This Home Trust Visa is a great cash back card that allows cardholders to earn 1% cash back1 on all eligible purchases.
Earn extra Rewards
Boingo Wi-Fi for Mastercard®
On-Demand and Subscription Services
Mobile Device Insurance
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 out of Toronto. He is a former financial services professional who worked for many years at major Canadian financial institutions where 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 in Business Administration from the University of Quebec (Montreal) and a Master in International Business from the University of Sherbrooke (Quebec).He is also the author of the Canadian Credit Card Guidebook.
