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Methodology for Canada’s Best Credit Cards (2011)

Within each category, we determined the top five cards for a user in a specific scenario and we made assumptions regarding card use which may vary from how you actually use your cards. For instance, once such scenario might show how much a user would make in cash rewards if he or she spends exactly $1,000 a month on each card.

For all cards, we use a five-year average for rewards, dividing the benefit of any sign-up bonus points across the five years. We only included sign-up bonuses or teaser interest rates that were standing offers, excluding those with specific deadlines. We deducted annual fees from the value of the rewards.

We looked at cards issued by RBC, TD, Scotiabank, BMO, CIBC, National Bank, HSBC, Capital One, MBNA, President’s Choice, Canadian Tire Financial, American Express and Desjardins. We did not look at every card offered by each issuer.

When extra rewards were offered for certain types of purchases, we assumed the following spending patterns, based on data from Statistics Canada:

Groceries: 20% of spending

Gas: 10% of spending

Pharmacy: 10% of spending

If extra rewards were given for gas from a specific retailer, we assumed all gas was purchased there. Other rewards bonuses tied to specific retailers, such as extra points for spending money on travel or specific restaurants, weren’t factored in.

For travel cards, we calculated the price of the trips before taxes. Flight prices were calculated based on a three-day average of Air Canada fares, using the lowest fare available with a maximum of one possible stop. If the fares were determined by the redemption of miles or points, we used the appropriate redemption schedules as published by the provider.

For cards that provided travel rewards as a cash value, we used that amount to value the points or miles. For cards that only provided trips, we determined how many trips were obtained for each spending level and prorated an approximate cash value. For people flying out of Toronto, we assumed the average trip was worth about $700 (average the price of a trip to Cancun, London and Tokyo). For people flying out of Calgary, we assumed the average trip was worth about $940. For people flying out of Vancouver, we assume the average trip was worth about $931.

Information on the credit cards was current as of August 2011. We looked at around 100 credit cards in total, so not every card in Canada was included in the study.