best cash back credit card in Canada

This post was originally written in 2007 but has been updated annually since. The reason why I’m posting it again now is because there have been changes to the best free credit card in Canada.  More below.

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.

Getting paid to use a credit card combined with no annual fee is a combination that I look for when choosing a credit card. Funneling our spending through a free cash back credit card (or a combination of a couple) gives us a significant cash back bonus at the end of the year. In fact, we’ve used our cash back rebate over the past couple of years to offset large “nice to have” expenses like travel.

What do I look for in a cash back card?  If I’m looking for a single “do it all” credit card, then the most important feature is high cash back on everyday spending.  What’s great about high cash back on everyday spending is that it can be paired with a credit card that offers higher cash back on particular categories.  To me, secondary features are insurance coverage for purchases and travel.

A couple years ago, I named the Tangerine money-back credit card as the best free cash back credit card in Canada. At the time, they offered 2% cash back on two spending categories (up to three categories if you opened a savings account with Tangerine), 1% on all other spending, and a 1.5% surcharge for foreign exchange transactions (typically 2.5%). A real winning combination of features.  Unfortunately, Tangerine reduced their “all other spending” to 0.5% cash back and jacked up their foreign exchange transactions to match the market at 2.5%. 

This year, we have a new winner for the best free cash back credit card in Canada, and it wins by quite a margin in my opinion.

Let’s take a look at how the best free cash back credit cards compare.

Top Cash Back Credit Cards in Canada (all with no annual fee – updated August 2019):

Rogers World Elite Mastercard (editors top pick)

  • 4% unlimited cash back rewards on all eligible purchases made in a foreign currency
  • 2% unlimited cash back rewards on Rogers™ products and services charged to your card
  • 1.75% cash back rewards on all other eligible purchases
  • Instantly redeem your cash back rewards towards any eligible purchase in the last 90 days via Mastercard® Pay with Rewards™ app.
  • Insurance coverage: Extended Warranty and Purchase Protection; Rental Car Collision/Damage; Out-of-Province/Out-of-Country Emergency Medical; Trip Interruption and Trip Cancellation.

Big gas/grocery spender? Check out the Scotia Momentum Infinite Visa which returns 4% on groceries and recurring payments. The Scotia card also offers a 2% return on gas and daily transit purchases and 1% on everything else. Limited time promo – annual fee waived for the first year ($120/year after the first year).  More details here.

Tangerine Money-Back Credit Card (editors pick)

  • Earn 2% Money-Back Rewards on purchases in up to three 2% Money-Back Categories of your choice, and 0.5% 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);
  • Free Cards for Authorized Users on your Account; and,
  • Purchase Assurance and Extended Warranty.
  • Full review here.

Capital One Platinum MasterCard Exclusively for Costco Members (editors pick)

  • 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 manufacturer warranty (maximum extension of 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.

The Simply Cash Card from American Express

It’s not very often I recommend an American Express credit card due to lack of retail acceptance, but this one is worth mentioning since it offers 1.25% cash back on all purchases regardless of the type of spending.

  • 5% cash back on all of your gas, grocery and restaurant purchases for the first 6 months;
  • 1.25% cash back on all purchases;
  • Car Rental Insurance;
  • Purchase Protection – 90 days insurance in case of theft or damage; and,
  • Extended Warranty – doubles manufacturer warranty (maximum extension of up to 1 yr).

Capital One Aspire Cash Platinum Mastercard 

  • 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 manufacturer warranty (maximum extension of 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.

RBC 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 manufacturer warranty (maximum extension up to 1 yr).

CIBC Dividend Visa

  • 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 manufacturer warranty (maximum extension of up to 1 yr).

Canadian Tire Cash Advantage Mastercard
Although there are better free cash back credit cards out there, I included it on the list for spenders who put much more than $24k on their credit card. From $24k onward, the cash back reward is boosted to 1.5%.

  • 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; and,
  • Pays out rebate quarterly which is applied against your balance.

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. This would equate to a cash back rebate of:

  1. Rogers World Elite Mastercard: $525
  2. AMEX: $375 (assuming that I can use this card everywhere I shop – big assumption since AMEX acceptance is not great from my experience)
  3. Tangerine Money-Back Card Credit Card: $352 (no limit on two categories @ 2% – I picked gas and groceries. Return would be higher if I had a savings account with Tangerine which gives three categories for 2%)
  4. Costco M/C: $340 (strong insurance package)
  5. RBC: $330
  6. CIBC: $330
  7. Canadian Tire: $303
  8. Capital One: $300 (lower but strong insurance package)

Conclusions

Finally, a free cash back card in Canada that gives premium credit cards a run for its money!  The Rogers World Elite Mastercard is a breath of fresh air in offering a generous 1.75% cash back on general spending, and 4% cash back on foreign purchases (net 1.5% cash back after 2.5% FX fee)! 

While the Rogers Mastercard is pretty strong, it gets even better if you stack the card with other free cards like the Tangerine card and the PC Financial World Elite MasterCard.  Combining these cards would likely bring your cash back to over 2% per year.  Not bad for not paying any annual fees! 

Although AMEX ranked fairly high for cash back (1.25% on all spending), the issue as previously mentioned is that the acceptance is spotty.  From my previous experience of using an AMEX, I would say that it was accepted about 50% of the time based on my own shopping habits.  The $375 in cash back is likely closer to $190, however, your shopping habits may have better luck with AMEX.

If you are a big spender, then you may 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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