Cash back credit cards have the most straightforward reward system out of any credit card in Canada. They are ideal for those who want an easy-to-understand rewards system. The cashback rate varies with your credit card but typically ranges from 1% to 4%. Additionally, specific categories will earn you a higher rate, such as restaurants or travel. The best cash back card for you will have the highest cash back rates in the categories you have the most spending.
With every purchase, you receive a certain percentage of money back. The percentage is known as your cashback rate, which changes depending on your credit card. While some cards offer a flat cash back rate on all purchases, most offer variable rates depending on what you buy.
You want a card that offers the highest rates in your most common spending categories. You could get a credit card that offers high rewards on groceries if you spend a lot on groceries every month, or get a credit card that offers great rewards on dining if you eat out often. For example, the CIBC Dividend® Visa Infinite card offers a 4% cash back on gas and groceries, 2% on dining, transportation, and recurring bills, and 1% on everything else. If you frequently buy gas and groceries, this is an excellent card. However, if most of your income is spent on restaurants, you should seek another card with a higher rate in this category. Essentially, the best cash back card depends on your current spending patterns.
We have created the following table to help you compare cashback credit cards depending on your top spending categories. By clicking the heading for each column, you can sort by the highest earning cards in that category. Additionally, you can filter out cards with annual fees.
|Cash Back Rate|
|Scotia Momentum® Visa Infinite Card||4.00%||1.00%||$120.00|
|TD Cash Back Visa Infinite* Card||3.00%||1.00%||$120.00|
|CIBC Dividend® Visa Infinite Card||4.00%||1.00%||$120.00|
|Meridian Visa Infinite Cash Back Card||4.00%||1.00%||$99.00|
|BMO CashBack® World Elite® Mastercard®||5.00%||1.00%||$120.00|
|CIBC Dividend Platinum® Visa* Card||3.00%||1.00%||$99.00|
|Brim World Elite Mastercard||2.00%||2.00%||$199.00|
|SimplyCash™ Preferred Card from American Express||2.00%||2.00%||$99.00|
|Scotia Momentum® Visa* Card||2.00%||1.00%||$39.00|
|Brim World Mastercard||1.50%||1.50%||$99.00|
The CIBC cash back credit card is an excellent option for a straightforward rewards system. You can redeem your CIBC cash back balance at any time, in increments of $25. CIBC offers a broad suite of cashback credit cards, ranging from premium to free cards. Additionally, CIBC is the new credit card partner of Costco. To learn more about CIBC, you can visit our linked webpage.
RBC offers a premium and free cash back credit card. You can redeem your cash back rewards starting at just $20. RBC is the only major bank to offer a flat-rate card, meaning every category earns the same cash back rate. Notably, RBC has partnered with DoorDash to offer a complimentary DashPass subscription which offers free deliveries. We have also published a guide on RBC mortgage rates.
TD provides two options for cash back redemptions. Initially, you can redeem whenever you want with redemptions over $25. However, there is also the option to redeem without a minimum requirement every January.
TD offers two types of cards. The premium Visa infinite includes a comprehensive suite of insurance. Through this card, you receive emergency road services and many types of travel medical insurance. Additionally, you can link your card with your Starbucks membership to earn 50% more stars at participating locations. TD’s interest rates are comparable with other credit cards.
BMO's Cashback World Elite provides the highest cashback rate on groceries within Canada. At 5%, it's an excellent card for parents or those who love to cook. This is also one of the only cashback cards to provide complimentary airport lounge access.
BMO also has one of the most flexible redemption programs. You have the option to redeem your cashback whenever you want, with a $1 minimum. Additionally, you can establish automatic deposits starting at $25. Your automatic deposits can be directed to a statement credit, BMO bank account, or investment account.
Scotiabank is the only significant Canadian bank to provide a mid-tier cashback credit card. This card costs only $39 per year, offering 2% cashback on many categories. The categories include gas stations, groceries, recurring bills and 1% on everything else.
Although you should primarily consider the cashback rate for your top spending categories, some additional benefits may help you decide on the best card. This includes welcome bonuses, limitations on cashback, annual fees and more. This section will provide you with more information to empower your decision-making.
It's also worth comparing cash back cards based on their welcome bonuses. These are usually three-month periods where your cashback rates are enhanced, up to a certain amount. For example, Simplii's Cashback Visa offers a promotional 10% cash back on restaurant, bar and coffee shop purchases. The promotion is valid for four months and up to $500 in spending. Below you can find the best cashback welcome bonuses as of May 31, 2022:
|BMO CashBack® World Elite®* Mastercard||10% back on eligible categories for three months. First year free.||Maximum $2,600 in spending across various categories ($500 in cash back). Apply by December 6, 2022.|
|SimplyCashTM Preferred Card from American Express||10% back on all purchases for four months.||Maximum $4,000 in spending ($400 in cash back).|
|Scotia Momentum® Visa Infinite||10% back on all purchases for three months.||Maximum $2,000 in spending ($200 in cash back). Apply by August 31, 2022.|
|TD Cash Back Visa Infinite||10% back on all purchases for three months. First year free.||Maximum $2,000 in spending ($200 in cash back). Apply by September 5, 2022.|
|Simplii Financial™ Cash Back||10% back on restaurant purchases for four months.||Maximum $500 in spending ($50 in cash back).|
Most cashback credit cards in Canada have no limit to the cash back you can earn. However, some may limit how much money you can make in specific categories. For example, the Simplii Financial Cash Back Visa provides a 4% cash back on restaurant purchases for up to $5,000. Your return rate will drop if you spend more than $5,000 in this category every year.
Any amount above this threshold receives a 0.5% cashback rate in this scenario. In general, cards with a higher earn rate tend to limit the amount of cash back you can receive after a certain amount of spending.
Most credit card companies offer both free and premium cashback cards. While premium cashback cards may cost between $39 to $120 annually, there are some outliers. In general, the more you pay for a card, the more benefits you can expect. Primarily, paid cards provide you with a higher average cashback rate. You can reference the graph below to see.
Aside from quantitative benefits, they may offer you lounge access, exclusive events, etc. However, it's up to you to decide if these benefits are worth the cost at the end of the day.
|Annual Cost||Standard Benefits||Notable Cards|
The other thing to understand is how to receive the cashback. Every card has different mechanisms. While most cards will automatically deduct the cashback from your credit bill each month, this is not always the case. For example, the Brim Cashback card requires you to "redeem" the cashback on eligible purchases. In contrast, the Simplii Cashback Visa collects the cashback and applies it to your statement every December.
The interest rates on cash back cards in Canada vary but are generally lower than those on travel rewards cards. For example, the Scotiabank Momentum Visa Infinite has an annual interest rate of 19.99%, whereas the CIBC Costco® Mastercard has a slightly lower rate of only 19.75%.
This is because travel rewards cards include many features. To help pay for some of the costs, banks will charge higher interest rates for travel cards.
However, credit card interest rates are generally significantly higher than mortgage rates in Canada. Currently, a 5-year fixed mortgage rate stands around 4%. In the scheme of lending products, credit cards have some of the highest interest rates. This is why it's essential to fully pay off your statement and keep a low balance every month.
Another consideration is the network of your credit card. There are three primary credit networks - Mastercard, Visa, and American Express. Depending on where you plan to spend your card, they may only accept specific networks. For example, American Express is not widely accepted outside North America and the United Kingdom. Likewise, Canadian Costcos only accept Mastercard, whereas American locations only accept Visa.
Cash back credit cards are ideal if you:
Although the best travel credit cards earn you a higher return on spending, they have a learning curve. To get the best return on your points, you must understand the best ways to redeem them. For example, travel points are most valuable when redeemed on travel-related purchases and not gift cards. If you don't travel frequently, you won't be getting the best value on your points.
Additionally, there may be blackout periods and fluctuating point valuations. In comparison, cashback credit cards allow you to understand the value of your points and quickly redeem them.
Next, most travel credit cards have a personal income requirement of $60,000 or a household income requirement of $100,000. If you don't meet this threshold, you will be limited to a handful of travel cards. Interestingly, American Express credit cards do not have income requirements, so you could still qualify for one.
Finally, travel credit cards have a high annual fee to pay for all the benefits. Canada's best cash back credit cards have annual fees ranging from $0-$120. The best travel rewards credit cards, on the other hand, all have annual fees of over $200. While travel cards provide benefits such as lounge access and travel insurance, you won't receive much value from the higher cost if you're not a frequent traveller.
It depends on your spending habits. You can use our interactive table near the top of this article to find the best cash back credit card.
Each card has different redemption requirements. For example, some cards will automatically deduct the cash back from your credit bill each month, while others require you to "redeem" the cash back on eligible purchases.
Most cash back credit cards have an annual fee. However, there are many premium cards with an annual fee.
Most cash back credit cards have no income requirements. However, the premium cards with annual fees above $99 tend to have income requirements of $60,000 per person or $100,000 per household. Additionally, some cards have requirements above $80,000 personal income or $150,000 per household.
It depends on your spending habits and how often you travel. Travel rewards credit cards are best if you spend a lot on travel and can take advantage of the benefits. Cash back credit cards are ideal if you don't travel frequently or prefer a more straightforward redemption.
Most cash back credit cards have foreign transaction fees of 2.5%. However, there are a few cards that do not charge this fee. For example, Brim credit cards have no foreign exchange fees and cashback rates ranging from 0.5% to 2.00%.
Additionally, the Rogers World Elite Mastercard earns you a 3% cash back on purchases made in U.S. dollars. Although the Rogers World Elite charges a 2.5% foreign exchange fee you can consider it a net 0.5% cashback purchases made in USD. Make sure to be cautious with refunds if using this card because you will lose the cashback amount and be stuck with a 5% total foreign exchange fee.
Cash back credit cards work by accumulating cash back on each purchase you make. This cash back can be redeemed for a statement credit, gift card, or direct deposit into a bank account. The best cash back credit cards will have high earn rates, flexible redemption options, and valuable perks.
When looking for the best cash back credit card, it's important to compare all the features and benefits of each card. This includes the earn rate, redemption options, annual fee, and valuable perks. You can use our interactive table near the top of this article to compare cash back credit cards side-by-side.