Tangerine credit card review: Is it the best no fee card in Canada? - MoneySense

Tangerine credit card review: Is it the best no fee card in Canada?

You’ve heard the buzz about this no fee cash back card, but is it worth the hype? And how does it stack up against the competition?

Tangerine Credit Card

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In the past, Canadians who wanted to avoid annual fees on their credit cards had to accept a stripped down, perk-less product—but those days are over. Nowadays, consumers with different habits and financial goals have strong options in the no fee category, particularly when it comes to cash back rewards. The Tangerine Money-Back Rewards credit card is a popular choice, but is it the best? We break down the online bank’s offerings and see how it stacks up against its competitors.

Tangerine Money-Back credit card quick facts

Tangerine Money-Back*

Tangerine Credit Card

  • Annual fee: $0
  • Rewards: 2% cash back in up to 3 spending categories of your choice; 0.5% on all other purchases
  • Welcome offer: New cardholders who apply by March 31, 2020, and then spend at least $5,000 in the first three months will receive a $250 credit on their account. As well, you can transfer balances at a low promotional interest rate of 1.95% for six months (note you will be charged a fee of 1% of the value of your balance transfer, and the interest rate on any remaining or new balance increases to 19.95% when the promotional period has ended)
  • Income requirement: $15,000
  • Purchase interest rate: 19.95%
  • Best feature: The ability to choose your own bonus categories means you can customize the card to suit your spending habits and maximize your rewards
  • Who it’s good for: Cash back enthusiasts who don’t want to collect points or pay an annual fee; anyone who wants to supplement credit card rewards with a second card to maximize earnings; cardholders who might not qualify for premium cards with higher income requirements
  • Accolades: Tangerine ranked first in the J.D. Power 2019 Canada Credit Card Satisfaction Study. The Tangerine credit card was also named best no fee cash back card in MoneySense’s Best Credit Card rankings

Click here for more details about the Tangerine Money-Back Card*

The Tangerine Credit Card

What is the Tangerine card offering?

By offering customers high 2% cash back rates in two out of 10 spending categories (or three, when they also open a savings account), Tangerine is an attractive option right off the bat, especially for strategic spenders. Let’s explain: Every credit card company sorts spending into categories (there is some variation company to company), such as groceries, gas and recurring bill payments. At Tangerine, you can choose categories based on where you do the bulk of your spending so that you can maximize the money back, instead getting locked into categories where you don’t spend as much. Two percent is a better-than-average rebate rate, and Tangerine’s app and website set things up so you can easily see your earnings, making this an excellent everyday card for most Canadians.

For those not yet in the Tangerine family, the bank frequently tempts new customers with time-limited offers. The current offer, good until March 31, 2020, gives you a $250 credit if you spend at least $5,000 within the first three months. In addition, new customers who transfer balances from other cards within 30 days of sign-up pay only 1.95% interest for six months.

How to get the most out of your Tangerine credit card categories

Aside from being a good everyday card, it’s also extremely flexible, meaning that you can swap categories as many times as you like (but swaps take effect only once per billing cycle). This is where the Tangerine card really shines. Let’s say you have a big renovation coming up. If you’ve selected the home improvement category, you’ll get 2% back on those purchases. Booking a trip? Travellers will do well with the hotel-motel option. Those looking to buy new furniture stand to earn back a healthy percentage. The 10 Tangerine categories offer a lot of variety:

  • Groceries
  • Gas
  • Restaurants
  • Furniture
  • Hotel-motel
  • Recurring bills
  • Drug store
  • Home improvement
  • Entertainment
  • Parking/public transit

By thinking ahead and selecting the right categories, consumers can really stow away some extra cash.

There’s also another way for you to maximize your credit card rewards: try pairing the Tangerine card with a second credit card to get the most cash back possible on every purchase. For example, say you chose gas, restaurants and groceries as your three 2% cash back categories on your Tangerine card, but you want to spend money on a new couch. If you use another credit card for that sofa purchase, such as the SimplyCash American Express card which has a cash back rate of 1.25%, it beats Tangerine’s earn rate of 0.5% for other categories.

Are there any drawbacks to the Tangerine Money-Back Card?

The regular cash back rate on the Tangerine card is only 0.5% which is better than nothing but it’s not going to make headlines. Also, there’s not much on offer by way of extras with this card (for instance, it lacks travel insurance benefits) though the standard purchase protection and extended warranty applies.

What about the competition?

Truth be told, there aren’t many products that compare to the Tangerine Money-Back card since no other card lets you pick your own bonus categories, but these four cards deserve a mention.

Simplii Financial Cash Back Card

Simplii Financial Cash Back CardThough less flexible than the Tangerine card, this product from Simplii offers a huge 4% back on purchases at restaurants, coffee shops and bars up to $5,000 annually, and 1.5% back on gas, groceries, drug store purchases and pre-authorized payments up to $15,000 per year. Once a consumer reaches those limits, they earn at the default 0.5%. For those who dine out frequently, this can be an excellent choice.

SimplyCash Preferred Card from American Express*

SimplyCash Preferred Card from American ExpressThe SimplyCash Preferred Card from American Express shares the second place spot with the Platinum Mastercard because they both offer a competitive 1.25% standard cash back rate which will appeal to consumers looking to earn without having to strategize around spending categories. The American Express boosts their product with $100,000 in travel accident insurance and promotional 2.5% back for three months, while the Mastercard offers 3% cash back on purchases in foreign currencies, and 2% back on Rogers products and services.

Click here for more details about the SimplyCash Card from American Express*

Rogers Platinum Mastercard

Rogers Platinum MastercardThe Rogers Platinum Mastercard shares the second-place spot with the SimplyCash Preferred Card because they both offer a competitive 1.25% standard cash back rate, which will appeal to consumers looking to earn without having to strategize around spending categories. The American Express boosts their product with $100,000 in travel accident insurance and promotional 2.5% back for three months, while the Mastercard offers 3% cash back on purchases in foreign currencies and 2% back on Rogers products and services.

Rogers World Elite Mastercard

Rogers World Elite MastercardApplicants for this World Elite Mastercard have to make at least $80,000 annually but for those who qualify the rewards are considerable. All spends in foreign currencies receive 4% back, Rogers products and services earn 2% and there’s a standard rate of 1.75% on all other purchases. Additionally, cardholders are covered with a range of travel, car rental and purchase insurance, and enjoy airport lounge access and other perks from Mastercard Airport Experiences.

How can I tell if the Tangerine card is the best option for me?

Every card on this list carries valuable perks and earnings. These questions will help you determine the best product for your situation.

  • Are you hands-on when it comes to managing your finances? Are you comfortable setting and changing your spending categories? With its high 2% rate and flexible spending categories, Tangerine offers a great deal for those willing spend strategically
  • Do you spend a significant amount on restaurants, coffee shops and bars? At 4% back on these purchases, the Simplii card can’t be beat. Keep in mind, though, the Simplii Visa will only give you 4% on your initial $5,000 in purchases, after which it defaults to 0.5%
  • Do you want a good regular cash back rate with a few extras? Rogers customers should consider the Platinum Mastercard for solid savings. Those wanting to carry an Amex (or looking for travel accident insurance) should check out the Simply Cash card
  • Do you cross-border shop and/or travel frequently? Are you a high earner? The Rogers World Elite Mastercard provides plenty of opportunity for healthy rebates to folks in these categories, but note that the regular rate is 1.75%—that’s 0.25% less than the Tangerine card (in selected spending categories)