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Top Cash Back Credit Cards in Canada for 2016

Top Cash Back Credit Cards in Canada for 2016Top Cash Back Credit Cards in Canada for 2016

This post was originally written in 2007 but has been updated several times since.  The reason why I’m posting it again now is because we have a new “best free cash back credit card” in Canada.  Check it out!

After you guys gave me your favorite credit cards, I did a little research and came up with what I think are the best free cash back cards in Canada.  With rewards points constantly depreciating in value, sometimes it’s best to get cold hard cash back.

It’s been a while since I’ve changed my number one pick in Canada, but the time has come for the title to change hands.

Here are the contestants for the coveted title of The Top Cash Back Credit Card in Canada (all with no annual fee – updated May 2016):

Tangerine Money-Back Credit Card (top editors pick)

  • Earn 2% Money-Back Rewards on purchases in up to three 2% Money-Back Categories of your choice, and 1% Money-Back Rewards on all other purchases;
  • No annual fee;
  • No limit on the amount of Money-Back Rewards you can earn;
  • Three 2% Money-Back Categories if you choose to have your Rewards deposited into your Tangerine Savings Account, or two 2% Money-Back Categories if your Rewards are deposited back onto your Credit Card (categories include: drug stores, restaurants, entertainment, furniture, gas, grocery, home improvements, hotels, public transportation and parking, recurring bill payments);
  • Earn 4% Money-Back Rewards for the first 3 months in your chosen categories;
  • 1.5% Foreign Conversion Fee (most cards charge 2.5%);
  • Free Cards for Authorized Users on your Account; and,
  • Purchase Assurance and Extended Warranty.
  • Full review here.

Big gas/grocery spender? If you spend more than $412/month in gas groceries, then the Scotia Momentum Infinite Visa which returns 4% on gas/groceries will return more than the Smart Cash even after the $99 annual fee. The Scotia card also offers 2% return on drug store purchases and recurring payments and 1% on everything else. More info here in my Scotia Momentum Infinite Visa review.  Limited time promo – annual fee waived for the first year.

MBNA Smart Cash MasterCard® (editors pick) (no longer taking new applications)

  • 5% cash back on all of your gas and grocery purchases for the first 6 months;
  • 2% cash back on gas and grocery purchases thereafter (up to $400/month spending);
  • And, you’ll always earn 1% cash back on all of your other qualifying net retail purchases (up to $1,250/month spending**);
  • Enjoy free online access to your credit card account;
  • And, with no annual fee and free additional cards you’ll start to see the benefits right away;
  • Once your cash back totals at least $50 at the end of a monthly billing cycle, they’ll automatically mail you a cheque – it’s that simple;
  • Car Rental Insurance;
  • Purchase Protection – 90 days insurance in case of theft or damage; and,
  • Extended Warranty – doubles warranty up to 1 yr.

**I recommend that once you obtain the Smart Cash card to upgrade to the free Smart Cash World card by calling or upgrading within your MBNA online login (Account Services).  This will eliminate the $1,250 spending cap on the 1% and add Price Protection insurance. The insurance will pay you back the difference if you find a lower price on a purchase within 60 days.

Capital One Aspire Cash Platinum Mastercard (editors pick) (get $75 cash back when signing up for this card)

  • Earn 25% extra cash rewards every year and pay no annual fee (cap one recently removed this bonus);
  • Earn 1% cash rewards on all purchases;
  • No limit to the amount you can earn;
  • Add an authorized user for $0, and earn even more cash;
  • Car rental insurance;
  • Purchase assurance – 120 days insurance in case of theft or damage;
  • Extended warranty – doubles warranty up to 2 yrs;
  • Price Protection – find a lower price within 60 days of purchase and they will cover the difference; and,
  • Baggage delay insurance.

Royal Bank Cash Back MasterCard

  • 2% cash back on grocery store purchases (up to $6k spending per year, after that, reverts back to 1%);
  • 0.50% cash back on regular purchases up to $6k spending;
  • 1% cash back on regular purchases after $6k spending in a year;
  • Purchase assurance – 90 days insurance in case of theft or damage; and,
  • Extended warranty – doubles warranty up to 1 yr.

Capital One Platinum MasterCard Exclusively for Costco Members 

  • 0.50% cash back on first $3,000 in purchases;
  • 1.00% cash back on any amount over $3,000;
  • 2.00% cash back on gasoline;
  • 3.00% cash back at restaurants.
  • Car rental insurance;
  • Purchase assurance – 120 days insurance in case of theft or damage;
  • Extended warranty – doubles warranty up to 2 yrs;
  • Price Protection – find a lower price within 60 days of purchase and they will cover the difference; and,
  • Baggage delay insurance.
  • Notes: Need a Costco Membership ($55/yr), rebate is collected every January @ Costco as a gift card or cash.

Canadian Tire Cash Advantage Mastercard

  • 0.25% cash back on the first $1,500 in purchases.
  • 0.50% cash back on the next $1,500 in purchases.
  • 1.00% cash back on any amount over $3,000.
  • 1.5% cash back on purchases over $24,000.
  • Double the cash back (depending on current tier basically up to 3%) at Canadian tire stores, gas stations and Mark’s Work Wearhouse.
  • No maximum rebate.
  • Pays out rebate quarterly which is applied against your balance.

CIBC 1% Dividend Visa

  • 0.25% cash back on annual purchases up to $1,500.
  • 0.50% cash back on annual purchases from $1,500.01 to $3,000.
  • 1% cash back for net annual purchases over $3,000.
  • No maximum rebate.
  • Purchase Protection – 90 days insurance in case of theft or damage.
  • Extended Warranty – doubles warranty up to 1 yr.

Based on my Scenario, since we funnel what we can through a credit card for the cash back and/or points, we typically spend about $30k / year on a credit card.  In that, about $11k in groceries and about $2.5k in gas.  Out of the top four cards above,  this would equate to a cash back rebate of:

  • Tangerine Money-Back Card Credit Card: $435 (no limit on two categories @ 2% – I picked gas and groceries)
  • MBNA Smart Cash (World): $348 (assuming I max out gas/groceries of $400/month)
  • RBC: $330
  • Capital One: $300 (lower but best insurance package)

Conclusions

If I was looking for a widely accepted free cash back credit card with a good return, there are four contenders, the Tangerine, MBNA, RBC and Capital One card.  They all have their own advantages.  Since Capital One recently removed their 25% bonus, it really pushed the Tangerine and MBNA cards ahead.  However, cap one still offers the strongest insurance package of the bunch (and the bonus $75 cash back on the Capital One card for new applicants doesn’t hurt).

My long-time favorite for the best free cash back credit card in Canada was the MBNA Smart Cash card.  It has a high return on gas/grocery spending (2% up to $400/month), offers 1% otherwise and with a decent insurance offering (purchase protection, extended warranty, and car rental insurance).  However, there is now a new king, the Tangerine Money-Back card, with better features and rewards.

Although the Tangerine money-back card is a new competitor, they have really jumped to the top of the ranks very quickly.  They offer 2% cash back on two categories of your choice (three if you have a Tangerine savings account) and 1% on everything else.  Best of all, no cash back limits!  One extra perk that they offer is a reduced foreign exchange fee.  Most cards charge 2.5% when buying items listed in a foreign currency, but the Tangerine card only charges 1.5%.

 If you are a big spender (spend more than $412/month in gas/groceries), then you will get better returns with a premium card even after the annual fee.  Check out my post on the best premium cash back credit cards in Canada.

Any thoughts?

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