Credit cards come with all sorts of rewards programs, whether you are earning airline loyalty points, hotel loyalty points, or bank-issued rewards points. Needless to say, there are options to suit everyone when it comes to earning rewards points.
Cash back credit cards are one option that is often chosen by individuals as a result of their simplistic earning and redeeming nature. Even for the most grizzled miles and points enthusiasts, cash back credit cards can find a purpose in their wallets for some niche uses.
With that in mind, let’s take a look at the best cash back credit cards in Canada.
Cash Back Credit Cards – Overview
Cash back credit cards have been around for ages and can be considered the traditional rewards method for consumers who swipe their credit cards. These rewards programs are easy to understand and often preferred by the average person who doesn’t want to deal with the ins and outs of rewards programs. After all, who doesn’t want to earn a few extra dollars back on their purchases for no effort?
Many cards offer a percentage cash back on all purchases, however, the cash back earning rate may vary based on the category of the purchase. Thus there is an argument for holding multiple cash back credit cards.
For example, a credit card may offer 3% cash back on fuel purchases, but only 1% cash back on all other purchases. In this case, it might make more sense to use a different cash back credit card that offers 5% cash back on grocery purchases, else you are leaving 4% cash back on the table by using a card that would only earn 1% on that purchase.
How Will I Receive My Cash Back?
Unfortunately, there is no universal answer to this question. Each cash back credit card or financial institution has a different process for paying out the cash back that has been earned. Some may pay it once a year on a set schedule, while others will allow you to request a payout once you reach a certain threshold, while others still award the cashback automatically on each monthly statement.
For the cards I mention below, I’ll share how you can “cash out” your cash back and if there are any restrictions to be aware of. Ultimately, it is preferred to have greater flexibility as to how you can receive your cash back as opposed to having it only paid out one time per year, for example.
Is a Cash Back Credit Card Better Than a Travel Credit Card?
When it comes to picking the right credit card for your personal needs, the right card can often be a subjective choice, similar to many other things in the personal finance world. One of the main things you always want to consider is the rewards program that is tied to the credit card.
We love travel credit cards on Frugal Flyer, simply because they are often the ticket to unlocking unique experiences, such as flying on Qatar Airways QSuites or enjoying your own private plunge pool at the Conrad Koh Samui. This is what keeps us going, and why we play the game we do with credit card welcome bonuses and loyalty programs.
However, we recognize that not everyone is as big on traveling and not all individuals have the same travel goals. For those individuals who simply want to earn on their credit card purchases, a strong cash back credit card can be a great ticket to effectively saving every time you spend.
Even then, for those who do travel a lot, a cash back credit card can provide some earning diversity to your wallet, and ultimately, cash is king when it comes to rewards.
As we will touch on in our list below, a couple of strong travel credit cards can actually become very effective cash back credit cards, if you understand the ins and outs of how to properly cash out your points.
How to Choose the Right Cash Back Credit Card
There are a few main factors that you want to consider when applying for a new cash back credit card: the annual fee, the cash back earning structure, and the welcome bonus.
Some cash back credit cards come with annual fees, whereas others are annual fee free. Typically, credit cards with annual fees will offer higher cash back reward rates and may offer additional benefits, such as travel insurance or airport lounge access. That being said, you will need to determine if the cost of the annual fee is less than the value you will generate from holding the card; a calculation only you can determine when considering your personal situation.
Each cash back credit card rewards cardholders with different earning rates depending on the purchase they are making. With that in mind, consider what the majority of your purchases would be classified as. For example, depending on the card you use, you could earn anywhere from 1% to 6% cash back on grocery purchases which is a massive range and ultimately, you could be leaving money on the table if you use a credit card that isn’t the best tool for the job.
You might also decide that the best cash back credit card is actually two different cash back credit cards for maximizing the cash back earned. No different than holding multiple travel credit cards, you can maximize your rewards earned by using the correct card for the correct purchase, as opposed to simply putting all purchases on one credit card.
Finally, consider the welcome bonus on the card. Many credit cards come with increased cash back for a period of time, and this can generate additional value when choosing a new card to sign-up for. Not to mention, you should also check to see if you can earn any additional cash back from our FlyerFunds Rebates program before applying!
Let’s take a look at some of the best cash back credit cards in Canada and do a deep dive into everything you need to know about these cards.
Best Cash Back Credit Cards in Canada
We’ve featured six credit cards below that we believe are the best cash back credit cards in Canada, in no particular order. These cards offer different spending bonuses, may or may not have annual fees, and some offer additional benefits for cardholders.
TD Cash Back Visa Infinite Card
The TD Cash Back Visa Infinite credit card is a classic cash back card, offering elevated cash back on multiple spending categories and the ability to easily redeem your cash back.
The TD Cash Back Visa Infinite* card earns cash back and gives cardholders the opportunity to earn 3% cash back on all eligible grocery purchases, gas purchases, and regularly recurring bill payments.
$350 cash back
$3,500
$350+
$139 (FYF)
Yes
Jun 3, 2024
The TD Cash Back Visa Infinite credit card earns 3% cash back on all eligible grocery purchases, gas purchases, and regularly recurring bill payments and 1% cash back on all other purchases made on this card.
One of the best parts of this card is that you can redeem your cash back at any time, provided you have accrued a minimum of $25. The convenience of being able to cash out when desired is a major plus, as opposed to having to wait for a once-a-year cash back disbursement. There is no limit to the number of times you can redeem cash back in a calendar year.
Finally, a small perk of this card is that it offers complimentary Deluxe TD Auto Club Membership, making it one of the best credit cards for road trips.
CIBC Dividend Visa Infinite Card
The CIBC Dividend Visa Infinite credit card is another more traditional option on this list, offering elevated cash back and a once-a-year redemption system.
The CIBC Dividend Visa Infinite card earns cash back and gives cardholders the opportunity to earn 4% cash back on gas and grocery purchases.
$0 cash back
$0
$0+
$120 (FYF)
Yes
–
The CIBC Dividend Visa Infinite credit card earns 4% cash back on eligible gas and grocery purchases, 2% cash back on eligible transportation, dining, and recurring bill payments, and 1% cash back on all other eligible purchases.
As the card has a small annual fee, it is important to ensure that you expect to earn a greater amount of cash back than what the annual fee is, else it may make more sense to consider a credit card with no annual fee.
The only drawback with this card is that the cashback is paid out automatically, once per year, on the December statement. While this may be convenient for those who indulge in Christmas shopping or vacations, it does provide less flexibility than other cards in which you can redeem cash back once you reach a certain dollar threshold.
Scotiabank Gold American Express Card
The Scotiabank Gold American Express credit card makes a surprise appearance in this list, as it isn’t a traditional cash back credit card, but can actually be used as one with some creative redemption options.
The Scotiabank Gold American Express card earns Scene+ Rewards points and gives cardholders the opportunity to earn 5x Scene+ points on grocery, restaurant, and entertainment purchases. This card charges no foreign exchange fees.
Check out our Scotiabank Gold American Express card review for more details.
40,000 Scene+
$7,500
$280+
$120
No
Jul 1, 2024
While the card does come with an annual fee, it has some of the best earning rates out of all of the cards on this list.
The Scotiabank Gold American Express card earns 6x Scene+ Rewards points (6% cash back) on all purchases at Empire Grocery stores, making the list of best credit cards for grocery purchases in Canada. It also earns 5x Scene+ Rewards points (5% cash back) on purchases at other grocery stores, restaurants, fast food, drinking establishments, food delivery services, food box subscriptions, and eligible entertainment purchases (including movies, theatre, and ticket agencies).
While this card earns Scene+ Rewards points, these can easily be redeemed towards grocery and liquor purchases at Empire grocery stores at a rate of 1 cent per point. If you shop at these stores, this card can be an easy way to build a large balance of points while also saving on future grocery purchases and gives you the opportunity to cash out points as effective cash back.
Taking it further, if you don’t want to apply your Scene+ towards grocery purchases, you can actually turn Scene+ directly into a statement credit with the use of the refundable hotel trick, allowing you to essentially cash out your Scene+ Rewards points as desired at a rate of 1 cent per point. This means that you could redeem 10,000 Scene+ Rewards points for a $100 statement credit, giving you that money to use as you desire.
The Scotiabank Gold American Express card is also one of the best credit cards with no foreign transaction fees, making it a good option for any purchases in foreign currencies.
American Express Cobalt Card
The American Express Cobalt credit card is another non-traditional cash back credit card with strong earning rates and a very flexible rewards currency.
The American Express Cobalt card earns Membership Rewards points and gives cardholders the opportunity to earn 5x Membership Rewards on eligible restaurant, food delivery, and grocery store purchases. In 2024, we selected this card to receive the award Best Credit Card for Grocery Purchases.
Check out our American Express Cobalt card review for more details.
15,000 Membership Rewards
$9,000
$174+
$156
Yes
–
The American Express Cobalt credit card earns 5 Membership Rewards points (5% cash back) for every dollar spent on food and drink purchases in Canada (including restaurants, delivery services, and grocery stores). Effective August 15, 2023, cardholders are eligible to earn 5x on up to $2,500 in monthly purchases, for a total of $30,000 per calendar year.
The card also earns 3 Membership Rewards points (3% cash back) for every dollar spent on eligible streaming subscription services in Canada, 2 Membership Rewards points (2% cash back) for every dollar spent on travel and transit purchases, including Amex Travel Online for eligible hotel and car rental bookings, and 1 Membership Rewards point (1% cash back) for every dollar spent on all other purchases.
While the cash does not earn cash back directly, American Express Membership Rewards points can be redeemed for a statement credit at a rate of 1 cent per point. This means that 1,000 Membership Rewards points can be cashed out for a $10 statement credit at any point.
Since the card earns the most flexible points currency in Canada, Membership Rewards points, there are other, better options, available if you are looking to branch out past straightforward statement credits and want to dip your toes into the travel world.
For example, you could look at transferring points to Aeroplan, British Airways Executive Club, or Marriott Bonvoy to unlock a whole world of previously unobtainable travel experiences.
Tangerine Money-Back Credit Card
The Tangerine Money-Back Credit Card is the last option on our list and is another strong contender if you would rather have a credit card with no annual fee.
The Tangerine Money-Back credit card earns cash back and allows cardholders to choose three accelerated spending categories to increase their cash back earnings.
Check out our Tangerine Money-Back credit card review for more details.
$100 cash back
$1,000
$100+
$0
Yes
Oct 31, 2024
The Tangerine Money-Back Credit Card earns 2% cash back on three money-back categories of your choice and 0.5% cash back on all other purchases. In order to select three categories, the cardholder will need to have an active Tangerine savings account, else they will only be able to select two elevated money-back categories.
The spending categories that can be selected for the increased 2% cash back category include grocery, furniture, restaurants, hotel/motel, gas, recurring bill payments, drug store, home improvement, entertainment, and public transport/parking.
Cardholders are able to adjust their elevated 2% cash back categories whenever desired, however, it will take one billing cycle for the change to take effect. This means that if you are looking to change your spending habits or have bigger purchases coming up, plan ahead if you are looking to maximize the value of your Tangerine credit card.
Money-back rewards that are earned on the Tangerine Money-Back Credit Card are paid monthly. The cash back will be issued either as a statement credit on the credit card account or as a deposit to a Tangerine savings account, depending on what redemption option the cardholder has specified.
Conclusion
While travel cards are the heart and soul of Frugal Flyer, cash back cards can absolutely have a place in your wallet and fill a unique need. If you are considering adding one to your credit card lineup, consider all aspects of the card including the annual fee, earning rates, cash out method, and welcome bonus before applying for your next credit card.
Josh Bandura
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