How to Pick the Best Rewards Credit Cards in Canada

Understand Different Kinds of Credit Card Rewards

First Published Date: October 29, 2015

Long gone are those days when credit cards were a luxury, not a necessity. We live in a time now where credit cards are intertwined from waking up to going to sleep at night – at every stage of modern lives. And why not? The protection, benefits, and rewards credit cards offer you are hard to ignore. If we are to use credit cards on a daily basis anyway, why not take advantage of it by maximizing our credit card rewards?

To get the most out of your credit cards, you need to understand how different kinds of rewards work. Today, I will go over the rewards basics you need to know before making your rewards selections. One important note I would like to point out is that this article is not about How to Pick Travel Rewards Credit Cards. I will write a separate article on travel rewards cards, as you need to understand first how different kinds of rewards work before moving to picking a travel rewards credit card.

Three Types of Rewards Cards

There might be 100s of different rewards credit cards, but if you break them down into categories, all of them will fall within these three categories:

Cash-Back Rewards Credit Cards

Travel Rewards Credit Cards

Other Rewards Credit Cards

Let’s decipher these three one by one.

Cash-Back Rewards Credit Cards

As simple as it sounds, you will receive cash back for each dollar you spend on your credit card. Credit card companies will give you direct cash amount or points (that represents cash amount) for your spending. The rate of return is usually 1 to 2 percent. However, there are credit cards that offer 3 to 4 percent cash back on selected categories such as grocery, drug store purchases, etc. Example: Scotia Momentum Visa Infinite card.

Cash-Back rewards are easy to understand and unlike travel rewards cards, you don’t need to master the ins and outs of various airline or hotel loyalty programs. Pick Cash-Back rewards if you don’t travel or don’t want to deal with travel rewards. However, keep in mind that Cash-Back rewards do not offer the most value you can get out of your credit cards like travel rewards credit cards do and one type of travel rewards card does offer simple rewards that are easy to understand (and can still provide more value than cash rewards) – which I will discuss below.

Travel Rewards Credit Cards

The travel rewards category is where you can get maximum return for your dollars that you spend on credit cards, but it can be quite complicated based on what kind of travel rewards you are dealing with. Let’s talk about the simplest travel rewards cards first.

Proprietary Rewards Points – These cards offer points (that offer fixed value, usually 1 cent =1 point) which can be redeemed through the credit card company for any flights, hotels, or travel-related matters. The beauty of proprietary rewards points is that you don’t need to spend time mastering various loyalty programs. However, your returns are usually the lowest among other types of travel rewards because you are always getting a fixed value for each point. Still, proprietary rewards points are a good option for those who want to avoid cash-back rewards cards and want a simple travel rewards credit card. Example: BMO World Elite MasterCard.

Cobranded or Loyalty Program Rewards Points – Credit cards that offer these kinds of rewards points are hotel travel credit cards, airline travel credit cards, etc. These types of cards can be cobranded with specific hotels, airlines, or their loyalty or frequent-flier programs. As these cards offer a variety of programs you can pick from, this is where you can make the most money. If you are knowledgeable about the loyalty program rewards credit cards offering, your return can be easily 2-4 percent. If you are extremely knowledgeable about the loyalty program rewards points, you can make lucrative returns such 4 to 8 percent return on your credit card spending. Example: TD Aeroplan Visa Infinite Card, Starwood Preferred Guest Card.

Hybrid Rewards Points – This is a combination of the two types of travel rewards discussed above. Credit cards offering hybrid points offer tremendous flexibility because you can use these rewards points to offset your travel costs through credit card company or you can transfer your points to various other hotel or flight points if you require. So these types of credit cards can work for both novice and expert users. Keep in mind that you will get more value for your dollar when you transfer to loyalty programs, rather than using points to offset travel expenses through a credit card company. Example: American Express Gold Rewards Card.

Other Rewards Credit Cards

Coffee shop and supermarket cards, gas station and automaker cards, and any other bizarre credit cards you can possibly think of that do not fall under cash and travel category fall under the other rewards category. These credit cards are only good when you want to shop and use your rewards at specific stores or for specific reasons. The rewards are not that great and options and features are limited for these types of cards. Example: Tim Hortons Double Double Visa Card.

Conclusions

So now you know the basics of different types of rewards credit cards. I will summarize everything in brief.

Cash-Back Rewards: Easy and simple to understand, but returns may not be that great. Go with this if you don’t travel and want hassle-free rewards from credit cards.

Travel Rewards: Can be complicated, but offers excellent returns. Go with this if you travel and want to get maximum rewards out of your credit cards.

Other Rewards: If you want to stick to specific stores or products and don’t mind whatever returns you get, this is for you.

What’s Next

After reading this article, if you would like to know more on Travel Rewards Credit Cards, you can read my next article How to Pick a Travel Rewards Credit Card. I will elaborate further on how to pick travel credit cards. I am still working on this article and will provide a link once completed.

How to Pick the Best Travel Rewards Credit Cards in Canada

Choosing the Best Canadian Travel Rewards Credit Cards

First Published Date : November 5, 2015

Last week I talked about How to Pick Rewards Credit Cards. Today, I will go into further detail for those who are interested in picking travel credit cards.

Before I start, I would like to clarify that this is NOT an article about any particular travel credit cards to pick. I cannot tell you what frequent-flier credit cards, hotel credit cards, proprietary credit cards, or hybrid rewards credit cards you should be using. It’s up to you to decide what cards suit your needs and lifestyle. However, I do have resources in the A Dawn Journal credit card section that you can use to come up with the best options. And don’t just use one site or one top credit card rating article to research. Spend a good amount of time and use various sites before making your decisions.

What I am going to discuss today is what features and options you need to be aware of before committing to any travel rewards cards. It might look simple on the surface, but there many things you need to be aware of and credit card companies will not provide you this information in black and white, unless you know what to look for and how to look for it.

Travel Rewards Credit Cards for Initial Sign-Up Bonuses

When you want travel credit cards solely for the hefty initial sign-up bonuses for free flights, free hotel nights, and so on, you don’t need to worry about what features the cards are missing because it’s likely you will cancel these cards in a year before the annual fee kicks in. Don’t forget to meet all the requirements for free flights or nights; usually certain amounts have to be spent in 3 months.

Travel Rewards Credit Cards for Ongoing Benefits

If you are holding on to travel credit cards for the benefits they are providing year after year and not using them for daily transactions, you don’t need to worry about missing any features because you use these cards for only one benefit.

Example: I don’t mind keeping the Marriott Rewards Visa Card and paying the $120 annual fee (although I don’t charge anything on this) because this card gives me a free night at Marriott every year, which I value more than $120. Another example: I don’t use my WestJet World Elite MasterCard, but I don’t mind paying the $99 annual fee because it gives me a companion flight (and free checked baggage) anywhere in Canada and the US for $100 every year, which I value at about $500 to $700.

Travel Rewards Credit Cards for Daily Transactions

Regardless of what kinds of travel cards you use, make sure you are getting maximum returns on each dollar and never settle for any credit cards that only give you 1 point (1% return) per dollar. For example, some credit cards will give you 4 points (or 4% return) on grocery, gas, and pharmacy purchases, but will only give you 1 point on all other purchases, including travel. Example: Scotiabank Gold American Express Card.

So what you can do is use one credit card for grocery shopping and another credit card (that gives you more than 1 point) on everything else. Example: BMO World Elite MasterCard gives 2 points on everything. If you do not want more than one card for daily transactions, pick one card that provides 2 (or more) points for everything. So avoid any cards that offer only one point for daily uses.

Also, make sure the cards you are picking for day-to-day needs give you a hefty sign-up bonus as well.

Travel Rewards Credit Cards for Travel Purchases

You have to be extra careful when you are using credit cards to buy plane tickets or hotels, as your trip should have full insurance coverage. Here is my list of coverage that I must have for my trip and I will only use a credit card that provides all these.

– Emergency Medical Insurance

– Travel Accident Insurance

– Trip Cancellation Insurance

– Trip Interruption Insurance

– Flight Delay Insurance

– Lost Luggage

– Hotel/Motel Burglary

– Auto Rental Theft and Collision/Loss Damage Insurance

I don’t mind if I don’t have Lost Luggage and Hotel/Motel Burglary insurance, but everything else is a must for my trip.

Another thing you need to be aware of is your card’s insurance provider. Stick to a credit card where the insurance provider is a reputable one and there are not many complaints when it comes to obtaining insurance benefits. Lots of credit cards offer a full suite of insurances, but the providers make it very difficult to claim and collect benefits when the time comes to do so. I discussed more on this here.

Travel Rewards Cards that Come With Personal Assistant

Do not settle for a travel credit card that does not provide you concierge service. Visa Infinite cards come with Visa’s own concierge service. Other cards usually provide concierge service through a third party or the card company’s own concierge service team.

Concierge service is a free service that is like having your own personal assistant at your disposal 24/7. Concierge service can do basically anything you can think of that you might need help with. Some of them are:

– finding and booking air, hotel, cruise, and restaurant reservations

– finding that hard-to-find concert ticket

– research for you something you need to find out

– help you when you are lost or in trouble in a foreign country

– sending flowers to someone on your behalf

– and much more

I use concierge service vigorously. In the last 6 months I used them to make me a list of all hotels with rates facing ocean in Myrtle Beach, providing me with a report on Las Vegas (what to see + do), and I even called them when I was in Niagara Falls to find me the closest movie theatre. The point is that this is a unique feature your credit card offers and you should take advantage of it.

Currently 3 of my credit cards offer concierge services from 3 different providers. However, Visa’s concierge is very reputable and possibly the best on earth. This is simply their wide coverage across the globe and they know how to deal with a situation in any country. I would not mind paying a $120 annual fee on one credit card just to have Visa concierge, if I don’t use that card for anything else.

How About Annual Fees

If you are looking for all the benefits and features a credit card offers, the fees are indispensable. A no-fee card is not going to offer you anything we talked about so far. So the way you approach fees is that you need to make sure your benefits surpass the total of all the fees you are paying.

My total spending on fees from all credit cards comes to about $700 – $800 annually. However, my benefits exceed well beyond $800. So this $800 is not actually a spending, but it’s an investment that provides me more returns.

Last Word

Before making your selections on your travel credit cards, spend time researching all the features and benefits. It’s likely you will not find everything you need in one card. But the good thing is you can have as many cards as you like. And there is nothing wrong with paying fees on premium credit cards as long as you can justify the fees for the features, services, and benefits you are receiving from your cards.

Bonus Tip – Same banks have several travel rewards credit cards providing different types of rewards. If you are on good terms with your banks, they will gladly transfer your account from one type to another type without hesitation. This serves you both ways because you don’t need to apply for the other credit card you want from your bank (which saves you one hard credit check) and still can get the sign-up bonus. I always have had success doing this with my banks. You have a better chance if you ask your bank after 2-3 years of using one card. If you ask them every year, there is a good chance they will decline

WestJet RBC World Elite MasterCard: Should You Keep It?

WestJet RBC World Elite MasterCard Review

First Published Date: July 19, 2015

The WestJet RBC World Elite MasterCard is a MasterCard Elite series

high-end travel rewards credit card that lets you earn WestJet for everyday purchases that can be used towards WestJet flights and vacations without any blackout periods or restrictions.

The Cost

Annual Fee = $99. Additional cards = $49

Minimum annual income required = $70,000 (or household income = $120,000)

Rewards Points Snapshot

– Earn 2 WestJet dollars for every $100 spent on WestJet flights and vacations.

– Earn 1.5 WestJet dollars on everything else.

– There is no limit or restrictions on earning.

First Time Bonus

A $250 WestJet dollars welcome bonus when you use your card for the first time.

Anniversary Bonus

An annual companion flight for $99 (plus applicable taxes, fees and charges) to fly anywhere in Canada or the United States (excluding Hawaii and Puerto Rico).

Features & Benefits

– The primary cardholder (and up to 8 additional guests on the same reservation) awarded 1st checked bag for free on all WestJet flights.

– Emergency Medical Insurance (15 days<65, 3 days>65 or older).

– Travel Accident Insurance (Up to $500,000 CAD).

– Auto Rental Collision/Loss Damage Insurance.

– Trip Interruption Insurance ($5,000 each, maximum $25,000).

– Emergency Purchases (After 4 hrs,$250 day, maximum $2,500 per occurrence).

– Flight Delay Insurance (After 4 hrs,$250 day, maximum $500 per occurrence).

– Hotel/Motel Burglary Insurance ($2,500 per occurrence).

– Purchase Security (For 90 days, up to $50,000)

– Extended Warranty Insurance (1 additional year)

What’s Missing

Some of the important benefits this card does not offer:

– Price Protection Insurance

– Trip Cancellation Insurance

– Delayed and Lost Luggage Insurance

– No Concierge services

My Take

Although The WestJet RBC World Elite MasterCard is missing some elements of insurance and services you would expect from a high-end credit card, its anniversary bonus makes it a card to consider adding to your credit card portfolio.

You can easily offset the annual fee and still stay on the plus side if you use the annual companion flight for $99 each year. Here is one example from my Las Vegas trip: Regular return trip fare from Toronto to Las Vegas = $600 (includes base fare, taxes, and fees)

My companion return trip would cost only $250 ($99 plus fees and taxes)

My total round trip cost for 2 = $850

That’s a $350 savings ($1,200 – $850)

Plus I would save on checked bags = $25×4 = $100

As you can see, you can save at least $450.00 on an average trip. Your savings can be lower or higher based on your trip distance. If you are not planning to use the annual companion flight feature every year, keeping this card makes no sense, as you can make more money with other cards that offer better returns and more benefits.

I personally hold this card as of this writing and I’m planning to hold it as long as I make one trip on WestJet every year. I use this card for some of my expenses as well. However, if I were not to use this card for any transactions, I would still hold it and would not mind paying $99 just to get the annual companion fare.

Disclosure: Information provided here may not be accurate and no longer valid. The mentioned card provider is not related to A Dawn Journal and neither monitor this site nor responsible for any inaccurate information. Contact the card company directly for accurate and updated information. A Dawn Journal or my YouTube Channel are not compensated by or affiliated with any credit card companies. All credit card articles are 100% unbiased and honest.

Is It Still Possible to Make Lots of Rewards Points from Credit Cards?

Rewards Points Opportunity Still Exists

First Published Date : July 23, 2015

In the past, credit card rewards points explorers were able to take advantage of juicy sign-up rewards bonuses over and over from the same cards and various different cards. However, some credit card companies closed the loophole that existed and others are working on closing it.

If you check the footnotes underneath credit card profiles on issuers’ websites, you will see that some of them are started to add something like this: Bonus offer is applicable to new members only. If you have held this card in the past, we may still approve your application, but will not reward you with any bonuses.

So this raises the question: Are the rewards points parties that existed until now all over? The answer is actually surprisingly both yes and no. Yes in the sense that like many points explorers did in the past – opening 5 to 10 accounts every year to rack up rewards points and then close those accounts after 3 months and then reopen them again to continue this rewards points party cycle – again and again are over. Credit card companies became aware of these parties and are closing the loopholes that existed.

However, the other answer is – no, it is still possible to make decent rewards points from bonuses every year and year after year. Slow and steady process is the key here and if you carefully apply for one credit card every six months, you can still make decent points without damaging your credit score.

But to succeed with this slow and steady process, there are other details you need to carefully consider and that’s what I will talk about in my upcoming book Credit Card Hacks: What Credit Card Companies Don’t Want You to Know. A full chapter will be dedicated on how to travel for free or with very little money from rewards points. Stay tuned for more once the book is published.

The American Express Gold Rewards card: Should You Keep It?

The American Express Gold Rewards Card Review

First Published Date : August 12, 2015

The American Express Gold Rewards card is a flexible highbred travel rewards credit card that lets you earn American Express points for everyday purchases that can be used towards eligible travel costs without any blackout periods or restrictions.

The Cost

Annual Fee = $150. Additional cards = $0

Minimum annual income required = $20,000

Rewards Points Snapshot

– Earn 2 points for every $1 spent at eligible gas stations, grocery stores and drugstores in Canada.

– Earn 2 points for every $1 spent on eligible travel purchases.

– Earn 1 point for every $1 spent on everything else.

First Time Bonus

A 25,000-point (valued $550 or more) welcome bonus when you spend $500 within 3 months. Also, the annual fee is waived for the first year.

Anniversary Bonus

None.

Features & Benefits

– Book any travel purchases with this card and use points to pay them when appear on statement.

– This is a charge card. Balance has to be paid in full every month.

– Transfer points to Aeroplan or AVIOS at 1:1

– Emergency Medical Insurance (15 days<65, none>65 or older, Amount: 5 M/per person).

– Travel Accident Insurance (Up to $500,000 CAD).

– Auto Rental Theft and Collision/Loss Damage Insurance ((maximum $85,00)

– Trip Interruption Insurance ($1,500 each, maximum $6,000).

– Flight Delay Insurance (After 4 hrs, maximum $500 per occurrence).

– Lost Luggage (maximum $500)

– Hotel/Motel Burglary (maximum $500)

– Extended Warranty Insurance

– Purchase Security

What’s Missing

Some of the important benefits this card does not offer:

– Price Protection Insurance

– Trip Cancellation Insurance
– No Concierge services

My Take

Although the American Express Gold Rewards card is a highbred card that charges a high $150 annual fee, it is missing some important elements of insurance and services you would expect from a $150 per year credit card, and it has no anniversary bonus to consider to add it to your credit card portfolio.

For a cheaper annual fee, for example $120 per year, you will find many other cards that offer features that the American Express Gold Rewards card is missing, such as Trip Cancellation insurance, Concierge service, etc., and you will find more value for your dollar.

I personally do not hold this card as of this writing and I’m planning not to hold it after its 1st year even if I get this card in the future.

However, a point worth mentioning is that this card earns 2 points for every $1spent at gas stations, grocery stores and drugstores and then lets you convert them to Aeroplan points. This makes it a high Aeroplan earner (2 Aeroplan points for each dollar) comparing any other cards.

Disclosure: Information provided here may not be accurate and no longer valid. The mentioned card provider is not related to A Dawn Journal and neither monitor this site nor responsible for any inaccurate information. Contact the card company directly for accurate and updated information. A Dawn Journal or my YouTube Channel are not compensated by or affiliated with any credit card companies. All credit card articles are 100% unbiased and honest.