Which cash-back card is tops?

How does your credit card stack up to the competition?

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Which one of Canada’s most popular cash-back credit cards gives you the best rewards? To find out, MoneySense calculated how many dollars you get back each year based on three spending scenarios. In the first, we assumed that you spent $5,000 a month on your cash-back card. In the second, we assumed you spent $3,000 a month, and in the third, we assumed spending of $1,000 per month.

When doing the calculations, we subtracted each card’s annual fees (if any), and added in any sign-up bonuses. In cases where you get extra rewards for spending on groceries or gas, we assumed you spend the average amount for Canadians on both (see the Methodology below for details).

As presented in the December/January 2011 issue of MoneySense, among those cards marketed primarily as cash-back cards, we found that the Capital One Cash Back Plus Platinum MasterCard came out on top for those spending $3,000 a month.

Since that magazine was published, however, an eagle-eyed reader has alerted us to the fact that even though it’s primarily a travel rewards card, not a cash-back card, Capital One’s new Aspire World MasterCard comes with a cash-back option that–thanks in part to a generous sign up bonus—-provides more cash back in the first year than any other card we looked at, regardless of whether you spent $1,000, $3,000 or $5,000 a month.

Note: Figures that appeared in the December/January 2011 MoneySense magazine for the BMO Premium Cash Back and MBNA Smart Cash Platinum Plus MasterCard were incorrect, and have been revised here. MoneySense apologizes for the errors.

We’ve ranked the cards below based on how much they pay back if you spend $3000 a month.

Card Annual cash back if you spend $1,000 a month Annual cash back if you spend $3,000 a month Annual cash back if you spend $5,000 a month
Capital One Aspire World MasterCard* $300 $675 $1025
MBNA Smart Cash Platinum Plus MasterCard* $350 $600 $800
Capital One Cash Back Plus Platinum MasterCard $21 $471 $951
Scotiabank Momentum Visa $176 $417 $656
BMO Premium CashBack MasterCard** $177 $416 $657
Canadian Tire Financial Services Cash Advantage MasterCard*** $101 $401 $761
MBNA PremierRewards Platinum Plus MasterCard $120 $360 $600
Capital One Cash Back Gold MasterCard $105 $345 $585
TD Gold Elite Visa**** $100 $340 $580
CIBC Dividend Visa $101 $341 $581
HSBC Cash Back MasterCard $85 $325 $565
RBC Cash Back Visa $218 $250 $250
CitiBank Enrich MasterCard $120 $250 $250
TD Rebate Rewards Visa $105 $235 $235
BMO CashBack MasterCard***** $72 $192 $312

METHODOLOGY:

Annual fees, if any, were subtracted from the annual cash-back amount. Sign up bonuses were included when offered-this means that in subsequent years, the amount of cash back will be less.

*For the Capital One Aspire World MasterCard and MBNA Smart Cash Platinum Plus MasterCard, only the redeemable amount of the cash back that was available to the card holder that year was included. More cash back credit accrued in that year can be redeemed in the following year.

**For BMO Premium CashBack MasterCard, extra cash back was included for gas purchases at Shell, calculated based on spending $185 on gas a month; a roadside assistance bonus of $69 a year was also included.

***For the Canadian Tire card, we did not include extra cash back from purchases at Canadian Tire gas bars and Mark’s Work Warehouse in our calculations.

**** For the TD Gold Elite Visa, roadside assistance was included, valued at $79 a year.

***** For the BMO CashBack MasterCard, extra cash back for gas purchases at Shell was calculated based on spending $185 in gas a month.

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