BEST CREDIT CARD REWARDS PROGRAMS
MD PRACTICE | MISCELLANEOUS SERIES
LAST UPDATED: MARCH 3, 2021
LAST UPDATED: MARCH 3, 2021
There are two types of credit card rewards: points and cash back. Points can be redeemed for a number of different things, but to get the most value out of them, you want to use them for travel. Do not be tempted to use them on purchasing merchandise, getting statement credits, or shopping with points. The one caveat is PC Optimum points - you can't use these points for travel.
Cash back is more straightforward and there are many reviews online elsewhere, so I will forgo this area. However, I would like to make a special mention for a few credit cash back cards that go below the radar:
Cash back is more straightforward and there are many reviews online elsewhere, so I will forgo this area. However, I would like to make a special mention for a few credit cash back cards that go below the radar:
- No fee Rogers World Elite Mastercard: 1.5% unlimited cash back on all eligible purchases; 3% back on purchases made in US dollars.
- No fee Tangerine Money Back Mastercard: 2% back on purchases made in 2 spend categories that you choose yourself; 0.5% back on everything else.
- No fee Costco Capital One Mastercard: For Costco members, this card is great for restaurant (3%) and gas (2%) purchases. However, Capital One will be leaving Canada at the end of 2021, so I would not recommend this.
FIXED POINTS TRAVEL PROGRAMS
When using points for travel, you can redeem them for the price of an airline ticket at market value. However, to maximize your points value even further, you want to use them on a fixed points travel program. In Canada, three programs are offered:
RBC offers a very compelling travel program, but earning points with RBC is difficult because their credit card welcome bonuses are low and their points earn rate is relatively low. Hence, the choice between programs should either be Aeroplan or American Express.
- Aeroplan
- American Express (Amex)
- Royal Bank of Canada (RBC)
RBC offers a very compelling travel program, but earning points with RBC is difficult because their credit card welcome bonuses are low and their points earn rate is relatively low. Hence, the choice between programs should either be Aeroplan or American Express.
EARNING POINTS
You can earn Aeroplan Points in a variety of different ways. The easiest way to start would be to use Aeroplan-branded credit cards (offered through Amex, TD, and CIBC). You can also shop at over 100 Aeroplan-affiliated retailers both in-store and online to earn additional points. You can even double dip by buying with your Aeroplan-branded credit card and also using your Aeroplan points card for the same purchase at an Aeroplan-affiliated retailer. Finally, you can earn points by flying with Air Canada or any of their Star Alliance Partners. One especially valuable ability with the Aeroplan program is the ability to merge points and then share with other members of your family.
Earning Membership Rewards (MR) Points with Amex is more straightforward. You use their credit cards, and that's about it. They have many options to choose from however with competitive welcome bonuses and earn rates. Amex does run a Refer a Friend referral program for select Amex cards that allows you to earn additional points.
Of note, Amex has two tiers of MR points and this is not well emphasized in their marketing. Regular MR points can be transferred to other airline programs like Air Canada's Aeroplan or American Airlines' AAdvantage. However, their lower tier MR Select points cannot be transferred. As of this writing, the Amex Cobalt and Amex Choice cards earn these lower tier MR Select points, while the remainder of the other Amex cards earn regular MR points. This is important to know because one of the best benefits of earning Amex points is the ability to transfer them to the various airline partners, including the Aeroplan program. And as it would happen, the Amex card that most people are going to earn the most points with is the Amex Cobalt card - earning only MR Select points.
Earning Membership Rewards (MR) Points with Amex is more straightforward. You use their credit cards, and that's about it. They have many options to choose from however with competitive welcome bonuses and earn rates. Amex does run a Refer a Friend referral program for select Amex cards that allows you to earn additional points.
Of note, Amex has two tiers of MR points and this is not well emphasized in their marketing. Regular MR points can be transferred to other airline programs like Air Canada's Aeroplan or American Airlines' AAdvantage. However, their lower tier MR Select points cannot be transferred. As of this writing, the Amex Cobalt and Amex Choice cards earn these lower tier MR Select points, while the remainder of the other Amex cards earn regular MR points. This is important to know because one of the best benefits of earning Amex points is the ability to transfer them to the various airline partners, including the Aeroplan program. And as it would happen, the Amex card that most people are going to earn the most points with is the Amex Cobalt card - earning only MR Select points.
WHERE IS AMERICAN EXPRESS NOT ACCEPTED
There is one specific disadvantage to using an Amex card that needs to be dealt with first. If this disadvantage is a deal-breaker for you, then Aeroplan is your points program of choice.
Visa and Mastercard are universally accepted across Canada (and the rest of the world for that matter), but American Express is not. Amex has traditionally had lower acceptance rates because of the higher transaction costs for businesses. As such, people who use Amex as their primary credit card are also forced to also carry a secondary Visa or Mastercard with them in case their Amex is not accepted. Unfortunately, this second Visa or Mastercard will not earn Amex points may have an annual fee associated with them.
While acceptance for Amex has grown within Canada, it continues to lag behind its competitors in the grocery category and with small businesses. Groceries may make up a large proportion of a month's credit card bills, and both the Amex Platinum and Cobalt card only offers 1 point per dollar spent while the Amex Gold card offers 2 points per dollar spent.
Amex is not accepted at the following businesses:
However, it is accepted at Save-On-Foods, Metro, Sobeys, Safeway, IGA, H-Mart, and Shoppers Drug Mart. It is also accepted at Home Depot, Canadian Tire, and Walmart.
Visa and Mastercard are universally accepted across Canada (and the rest of the world for that matter), but American Express is not. Amex has traditionally had lower acceptance rates because of the higher transaction costs for businesses. As such, people who use Amex as their primary credit card are also forced to also carry a secondary Visa or Mastercard with them in case their Amex is not accepted. Unfortunately, this second Visa or Mastercard will not earn Amex points may have an annual fee associated with them.
While acceptance for Amex has grown within Canada, it continues to lag behind its competitors in the grocery category and with small businesses. Groceries may make up a large proportion of a month's credit card bills, and both the Amex Platinum and Cobalt card only offers 1 point per dollar spent while the Amex Gold card offers 2 points per dollar spent.
Amex is not accepted at the following businesses:
- Loblaws and it's subsidiaries, including:
- Superstore
- No Frills
- T&T Supermarket
- Costco
- Variable acceptance with small businesses
However, it is accepted at Save-On-Foods, Metro, Sobeys, Safeway, IGA, H-Mart, and Shoppers Drug Mart. It is also accepted at Home Depot, Canadian Tire, and Walmart.
MY PERSONAL POINTS EARNINGS
I have been using the American Express Colbalt card since it's introduction in 2017. American Express delivers a year end report of your annual spends and conveniently places them into spend categories. With this information, I calculated how many I points I would have earned if I had instead used an Amex Platinum, Amex Gold, or TD Aeroplan Visa Infinite Privilege card instead. I lead a fairly modest lifestyle eating at home with dining and/or takeout once or twice a week.
I earned the most points with the Amex Cobalt card. This was followed by the Amex Platinum card (87% of the Cobalt card's points), then TD Aeroplan Visa Infinite Privilege card (77%), and lastly the Amex Gold card (76%). If I had purposefully chosen to purchase more of my travels with Air Canada, the points I would have earned with the TD Aeroplan Visa Inifinite Privilege would have been higher.
I earned the most points with the Amex Cobalt card. This was followed by the Amex Platinum card (87% of the Cobalt card's points), then TD Aeroplan Visa Infinite Privilege card (77%), and lastly the Amex Gold card (76%). If I had purposefully chosen to purchase more of my travels with Air Canada, the points I would have earned with the TD Aeroplan Visa Inifinite Privilege would have been higher.
AMERICAN EXPRESS VS AEROPLAN
If you are a person who flies a lot, especially for business, the Amex Platinum card is the way to go. You will automatically get Gold Membership Status at major hotel chains and have unlimited access to airport lounges with the Priority Pass (along with free guest access). You still retain the ability to use the Amex Fixed Points Travel Program and fly with Amex-affiliated airlines, or convert your MR points to another airline partner's program. Your secondary card should be a Mastercard so that you may shop at Costco where Visa or Amex is not accepted.
If you're like the majority of travellers who only fly a few times a year, perhaps you may benefit more by using the same money on an Aeroplan-branded black credit card (Amex Aeroplan Reserve card or the TD or CIBC Aeroplan Visa Infinite Privilege card). This means that you are committing to Air Canada and the Aeroplan program, but you can focus your spend on one airline. The black credit card already gives you nice perks with Air Canada, including priority check in, priority boarding (Zone 2), and free checked bags that are tagged as priority. You also get free unlimited access to Maple Leaf Lounges along with 6 passes to Priority Pass Lounges. You also receive an annual Companion Pass when you spend $25,000 in net purchases, and cardholders who hold Aeroplan Elite Status can rollover unused Status Qualifying Miles (SQMs) and eUpgrade credits to the following year. One downside to the black card is that other family members and guests entering the Maple Leaf Lounge will have to pay a fee, and the only way to avoid this is to earn Aeroplan 50k Elite Status.
If the majority of your spend on your credit card is dining, takeout, and food delivery, use the Amex Cobalt card. The 5x multiplier for this category on your Cobalt card allows to you to earn MR Select points very quickly. You may not get any special perks with airlines for holding the card, but you earn a lot of points and can use them on the Amex Fixed Points Travel Program.
If you're like the majority of travellers who only fly a few times a year, perhaps you may benefit more by using the same money on an Aeroplan-branded black credit card (Amex Aeroplan Reserve card or the TD or CIBC Aeroplan Visa Infinite Privilege card). This means that you are committing to Air Canada and the Aeroplan program, but you can focus your spend on one airline. The black credit card already gives you nice perks with Air Canada, including priority check in, priority boarding (Zone 2), and free checked bags that are tagged as priority. You also get free unlimited access to Maple Leaf Lounges along with 6 passes to Priority Pass Lounges. You also receive an annual Companion Pass when you spend $25,000 in net purchases, and cardholders who hold Aeroplan Elite Status can rollover unused Status Qualifying Miles (SQMs) and eUpgrade credits to the following year. One downside to the black card is that other family members and guests entering the Maple Leaf Lounge will have to pay a fee, and the only way to avoid this is to earn Aeroplan 50k Elite Status.
If the majority of your spend on your credit card is dining, takeout, and food delivery, use the Amex Cobalt card. The 5x multiplier for this category on your Cobalt card allows to you to earn MR Select points very quickly. You may not get any special perks with airlines for holding the card, but you earn a lot of points and can use them on the Amex Fixed Points Travel Program.
REFERENCE: AEROPLAN TRAVEL ZONES
Aeroplan flight redemptions are based on travel zones and the distance you have to travel from your home airport. There are some nice sweet spots for travel using the Aeroplan program. View Air Canada's Flight Reward Chart for more details. Air Canada may not fly to all destinations listed below, but the cities are all listed for reference.
Vancouver to within North America Zone:
Within 0-500 Miles:
Within 501-1,500 Miles:
Within 1501-2,750 Miles:
2,750+ Miles:
Vancouver to Pacific Zone (Asia and Australia): Within 0-5,000 Miles:
Within 5,0o1-7,500 Miles:
Within 7,501-11,000 Miles:
Vancouver to Atlantic Zone (Europe, Africa, India): Within 0-4,000 Miles:
Within 4,001-6,000 Miles:
Within 6,001-8,000 Miles:
Within 8,001+ Miles:
Vancouver to South America Zone: Within 0-4,500 Miles:
Within 4,501+ Miles:
Flights from Vancouver to vacation destinations such as Arizona, Hawaii and Japan will be the best sweet spots using Aeroplan points. Cancun and Cuba are just outside the 2,750 mile limit, but you're likely booking an all-inclusive vacation to these destinations anyways. |
Toronto to within North America Zone:
Within 0-500 Miles:
Within 501-1,500 Miles:
Within 1501-2,750 Miles:
2,750+ Miles:
Toronto to Pacific Zone (Asia and Australia): Within 5,0o1-7,500 Miles:
Within 7,501-11,000 Miles:
Within 11,000+ Miles:
Toronto to Atlantic Zone (Europe, Africa, India): Within 0-4,000 Miles:
Within 4,001-6,000 Miles:
Within 6,001-8,000 Miles:
Within 8,001+ Miles:
Toronto to South America Zone: Within 0-4,500 Miles:
Within 4,501+ Miles:
|