Credit Card Comparisons
In Canada, there are multiple different credit card providers, with a variety of card options that provide different types of benefits. These benefits range from generic cash back cards – cards that give you a percent of the purchase back- to travel rewards cards that use points to pay for flights and other travel related activities. We have taken the liberty to congregate much of this data into one simple spreadsheet, highlighting the company providing the card, card name, link to its website, and respective advantages. This spreadsheet also has information including interest rate, financial requirements to qualify for the card, and reward type. All benefits come directly from the respective links attached in the excel spreadsheet.With all the different types of cards out there, our team chose to analyze 3 different categories: Cash Back, Aeroplan, and Travel cards.
Cash Back Cards
Cash back cards allow you to earn a percent of the purchases made on the card to use later. Some companies While all cash back cards work similarly, different credit card companies will use different mechanisms to redeem the rewards. For example, TD keeps the cash rewards as a balance with the card that can be used to pay the credit card bill at the user’s discretion. On the other hand, Scotiabank will deposit the cash rewards into a pre-selected account at a certain date annually (such as Scotiabank). In addition, different credit card companies will offer higher percent returns on different types of products. For example, some TD cards will offer 1% cash back on all gas purchases, whereas some CIBC cards offer 3%. Depending on your monthly spending, you can calculate the estimated returns using the information in the excel spreadsheet to determine which card fits your needs best.
Aeroplan Cards
Aeroplan cards are partnered with Air Canada as a rewards program that helps reduce the cost of travel. Aeroplan cards allow individuals to accumulate points that can be redeemed towards flights and Air Canada travel packages. Combined with an Aeroplan membership, these cards can help you collect points for travel efficiently and offer other benefits depending on the card purchased. For example, some of the Aeroplan cards can be used to rebate $100 for Nexus applications every 48 months, reducing the cost of a Nexus travel program membership. They can also provide access to Air Canada lounges and provide travel insurance with automatic and optional coverage while travelling. As with the Cash Back cards, each card has its own list of benefits, so you have to look through and see which one will work best for you.
Travel Rewards Cards
General travel rewards cards are not associated with Aeroplan but can be used to accumulate travel rewards. These cards give company points (eg. BMO travel cards give BMO points) that can be redeemed for travel through the company’s travel programs. These cards typically provide less flexibility to redeem points compared to more traditional Cash Back cards, but because of this, offer a higher reward for each purchase. A general rule for credit cards, as you limit the options by which you can spend your rewards, the rewards become larger for each dollar spent. These cards, unlike Aeroplan, allow you to travel with a variety of Airlines, including West Jet. Again, depending on your lifestyle and ability to travel, these cards provide a variety of ways to redeem points, but are still less flexible than Cash Back.
Now that we have assembled all the research, here are a few more key things to note:
1: Company points can differ in their value. When looking at rewards points, go through company websites to see what the relative value of the rewards are. 1 company x point may be the same as 2 company y points, so make sure you understand the value of the points.
2: Read the details of how you can redeem points or cash back. Some companies have “blackout periods'', or periods where you can’t redeem points to pay for purchases. For travel cards, these are traditionally around busier travel times (such as the Christmas holidays). The same rule applies for Cash Back cards, make sure you understand how you redeem your cash back. For some people, having the flexibility to redeem the money against the card at any point may be worth accepting slightly worse reward rates, when compared to getting one cheque with the total annual reward sum sent at the end of the year.
3: Take time before choosing a card. Different cards can be incredibly powerful, when used in the right context. For people who drive a lot, cards that provide the highest cash back on gas can end up saving hundreds of dollars a year. Make sure you have read through the major cards you’re interested in and have selected the one that will help you the best!
Here is the link to an excel file, hosting comparison between a variety of cards available in Canada.