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The Best Cash Back Credit Cards Canada
Are you after cash back cards that provide refunds when you make purchases? If so, 41% of the 88% of credit cards in Canada that come with rewards programs offer cash back.
Of course, there are important differences between cards, especially regarding the percentage they offer and the type of purchase they give refunds for. Depending on the card, you may get rebates for gas, groceries, dining at restaurants, or other purchases.
So, let's see what could be the best cash back credit card in Canada for you!
Best Cash Back Credit Cards for November 2024
Tangerine Money-Back Credit Card
- 0% annual fee
- Two categories of your choice for 2% cash back
- 0.5% refund for everything else
BMO CashBack® World Elite® Mastercard®
- 5% cash back on groceries
- 4% refund on transit
- Welcome offer: up to 10% cash back for the first three months and the first annual fee waived
Scotia Momentum® Visa Infinite* Card
- 4% cash back on recurring bills
- 2% refund on transit and gas
- 10% cash back on all purchases within the first quarter
TD Cash Back Visa Infinite Card
- $120 annual fee
- 3% money-back on groceries, recurring bills, and gas
- 1% refund on other purchases
CIBC Dividend® Visa Infinite* Card
- $120 annual fee
- 4% refund on gas and groceries
- 2% cash back on transportation and dining
Top Canadian Cash Back Credit Cards in 2024:
Tangerine Money-Back Credit Card - Best no-fee cash back credit card
BMO CashBack® World Elite® Mastercard® - Best for groceries
Scotia Momentum® Visa Infinite* Card - Best for recurring payments
TD Cash Back Visa Infinite - Best for rewards redemptions
CIBC Dividend® Visa Infinite* Card - Best for gas purchases
Cash Back Credit Cards: Advantages and Drawbacks
Now, let's take a quick look at cash back credit cards' pros and cons.
Benefits
- Cash-back cards make it easy to earn valuable rewards.
- Welcome bonuses and introductory offers can give you a lot of extra cash.
- Your rewards can help pay off your card balance.
- High rates for items you buy can lead to substantial rewards.
Downsides
- It can take a long time to accumulate rewards points depending on how much you spend.
- Introductory and bonus offers may come with various conditions.
Summary
Now that you know how cash back credit cards work, we can conclude the following:
- You need to evaluate your expenses and assess various credit cards to choose the one offering the best value.
- Some credit cards offer higher money-back rates for specific purchases, while others provide equal cash back for many categories.
- Annual income is among the defining eligibility requirements. Some have a high threshold (as high as $80,000), while others (the SimplyCash Preferred Card, for example) don't have this requirement.
What Are Cash Back Credit Cards and How Can You Evaluate Them?
Canadian cash back credit cards are rewards cards offering percentage rates that often vary according to what you purchase. As such, it makes sense to consider your spending habits and choose the one that offers the best rate for your most frequent purchases.
But there’s more to the story. Let’s take a closer look to establish what else you should remember when evaluating them.
Interest Rates
When looking at different cash back credit cards, it's essential to compare interest rates. The credit cards with the highest cash back typically have an interest rate of 19.99% or similar. However, if you pay off your balance in full every month, the provider won't charge you any interest.
Suppose you don't usually pay off your credit card balance in full every month. In that case, looking for a cash back credit card with either 0% interest for an introductory period or a lower ongoing interest rate might be a good idea. That way, you can save on interest payments while still earning rewards on your spending.
Annual Fee
You’ll need to decide whether you’re willing to pay an annual fee for your credit card. In most cases, paying a yearly fee means earning more cash back and having better benefits. Cards without an annual fee may have a lower earnings rate, which you can compensate for if you don't charge much to your card.
Welcome Offer
Welcome bonuses are a common perk of cash back rewards cards in Canada. These bonuses typically consist of a higher cash back rate for new cardholders for a set period.
For example, you may get 1% cash back on all purchases, but also earn 5% cash back on your spending for the first three months (up to a $200 maximum) thanks to the welcome bonus.
When comparing cash back welcome offers, it's essential to look at:
- The accelerated cash back percentage
- The terms and conditions, to find out how long the offer lasts
Cash Back Bonus Categories
Credit cards with cash back offer various earning rates on bonus categories. With that in mind, it's essential to consider where you spend the most money so you can choose the card that provides the best rate on your regular spending.
If you’re a gourmand, for example, you might want a credit card that offers:
- 4% cash back for grocery shopping
- 3% for dining at restaurants
- 1% on everything else
Remember that the amount you spend on bonus categories every year could potentially earn you more than any welcome bonus offered. Therefore, it’s important to factor this in when deciding which credit card is right for you.
What Are Common Cash Back Categories in Canada?
Some bonus categories the best cash back credit card in Canada may offer for maximizing your budget are:
- Gas
- Groceries
- Restaurants
- Travel (airline tickets, hotels, rentals)
- Transportation (taxi, Uber, public transport)
- Entertainment (cinemas, theatres, concerts)
- Recurring bill payments (internet, cellphone)
Insurance
Most cash back credit cards offer benefits, such as rental car insurance, protection for purchases, and extended warranties on items you buy. You may also get access to more specialized perks like complimentary roadside assistance or mobile device insurance with some cards.
Note, though, that travel insurance for cash back cards doesn't match that offered by travel cards. If you travel a lot, you might consider opting for a cash back or travel rewards credit card.
FAQ
What is the best cash back credit card in Canada with no annual fee?
We adjudge the Tangerine Money-Back Credit Card to be the best cash back credit card without an annual fee in Canada. It allows cardholders to choose two purchase categories for maximum cash back (2%) and pays rewards monthly.
How does 5% cash back work on credit cards?
Generally, 5% cash back promotions work for purchases until you reach the cap. Once you get there, the basic money-back rate takes over.
Which bank gives the highest cash back?
The best cash back credit card in Canada for groceries is the BMO CashBack World Elite Mastercard, giving 5% money-back. The Scotia Momentum Visa Infinite Card offers 4% on recurring payments, while the TD Cash Back Visa Infinite gives 3% on gas.