Which cash-back card is tops?

How does your credit card stack up to the competition?

by

Online only.

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.

115 comments on “Which cash-back card is tops?

  1. I'm curious about how you came up with the numbers for the MBNA Smart Cash Platinum Plus MasterCard . Here's a card that gives 1% on every purchase, 3% on groceries as well as gas (5% for the first 6 months) and there's no annual fee. Spending $1000/month, at the very least, only counting expenses at 1%, that's a total of $120 cash back. And that's, not counting anything at 3%…. Somehow you come up with $100

    Yet the BMO Premium CashBack MasterCard which gives the same 1% but only 3% on gas and costs $50/year somehow manages to return $207 in cash back for the same $1000/month in spending. Can you please explain your math ?

    Reply

    • Thanks for bringing this to our attention Andre. We have corrected the numbers in the story.

      Reply

  2. Hello, i am also curious as to how you came up with the calculations for the RBC Cash Back Visa. RBC has a calculator online that allows you to plug in amounts you would spend on a monthly basis and with 5% on groceries till March 31,2010 and 1% on every other purchase, and assuming your spending $800/month and $200 on gas, the calculator only shows a $184 back? Can you also explain your math

    Reply

    • Hi James,

      We calculated this using the promotional 5% rate on groceries for the first four months.

      1st four months (Dec. to Mar.)
      $615 groceries times 4 months times 0.05 equals $123.00
      $385 misc. times 4 months times 0.01 equals $15.40

      Next eight months
      $1,000 times 8 months times 0.01 equals $80.00

      Total cashback for 1st year is $218.40

      I just talked to RBC about this and they said our numbers are correct and they are investigating their online
      calculator.

      cheers, Sarah

      Reply

      • In that case, did we calculate MBNA cash back by using 5% on grocery and gas too(under 600)? I prefer not to include promotion stuff(bonus and so on) to get real return.

        Thanks

        Reply

    • We calculated this by giving the higher 5% rate on $615 groceries for the first four months and waiving the annual fee, as per the promotion.

      1st four months (Dec. to Mar.)
      $615 groceries times 4 months times 0.05 equals $123.00
      $385 misc. times 4 months times 0.01 equals $15.40

      Next eight months
      $1,000 times 8 months times 0.01 equals $80.00

      Total cashback for 1st year is $218.40

      I checked with RBC about this and they said these numbers are correct. They are looking into the issue with their cash back calculator.

      Reply

  3. I use a BMO Cash Back Mastercard and get a credit to my account each January. After reading this article, I applied for a Capital One card and learned that you can take a cash reward anytime the balance exceeds $15.

    Fred

    Reply

  4. I'm deciding between the Capital One Aspire MC and CIBC Dividend VISA INFINITE™ Card. Do you have the calculations for this CIBC card, only the regular CIBC dividend card is on your list.

    Thanks for your help.

    Reply

    • Hi Michael, We haven't looked at this card yet. We may be revisiting this issue later in the year. cheers, Sarah

      Reply

  5. Folks, you cannot take these numbers as they are. It all depends on your spending pattern. If I am not mistaken, Moneysense assume you spend a big chunk of the $1000 on grocery or gas, only 1/3 earning the 1% category. Do not expect to get the cash back listed here if this is not how you use your card. For instance, I gas up at Costco because the discount is greater than the cash back but I can only Amex. A lot of Chinese groceries simply do not accept credit cards. Therefore you really have to do your math base on your own spending habit.

    Reply

    • This is very true. For our stories we try to find typical scenarios, but it really depends on your spending habits. If they are different than in our examples, than another card might be better for you.

      Reply

  6. hi, could you add another information next time you do the comparison: how does it look like in say the second year when all the welcome bonuses etc disapear? you take a credit card for longer than one year and don't change them every year either…
    thanks a lot

    Reply

    • Good point Andre. I agree that it's important to look at the cards beyond the initial period that includes the bonuses. In future we will include this info in our rankings.

      Reply

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  97. I realized that most website only compare the % return or points to $ conversion, which is great, as this is money in your pocket, however, I also like to use other credit-card privileges and they really vary from card to card. For example, I have a card that covers my family for 31 days in travel medical insurance + all other insurance coverage. As well, a bonus if you have a card with 2 years extended warranty, lounge access (I would not pay $70 for that access but would love to get it for free), some cards even give you roadside assistance. In any case, I found only one website (WalletSavvy.com) that actually considers the various details. It is open to interpretation though, as it is questionable how do they assign $ value to these features, and yet – this is still great.

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