Credit Card Spending & Benefit Caps: Everything You Need to Know

Credit cards can be confusing for Canadians, whether they’re just starting their Miles & Points journey or are seasoned veterans.

As if juggling category multipliers, welcome bonuses, and minimum spends wasn’t hard enough, there’s an entire other category you should be aware of: spending caps. These are caps that make it so that you can only earn the most lucrative category up to a certain maximum amount. For example, we have an entire article on 5x credit cards, and each of those cards has an annual ceiling on the amount of 5x you can earn.

While this can be a bit counterintuitive to understand at first, stick with me while we go through it. It will all be rewarding in the end.

What’s In a Calendar When It Comes to Credit Cards?

So before we start off, we need to untangle all of the complexities.

The reason we want to understand the calendar is in order to book a seat on that Air Tahiti Nui business class flight to a sunny Bora Bora, you are going to want to earn as many points as possible. 

Well, guess what, the credit card companies know that as well. And while they’re happy to earn 100% of the swipe fees you charge through your card, they’re running a business. They won’t issue an infinite number of points at the maximum rate. This leads them to have a cap on the amount of points you can earn at the highest level.

This amount is often calculated annually. For most Canadians, annually just sounds like January 1st to December 31st of any given year. To credit card companies, this is the convention. A card like the Scotiabank Gold American Express Card allows you to earn 5x on eats and drinks up to $50,000 spent per calendar year.

In general, this is the ideal system because not only is it easy to understand, but you can potentially “double dip.” For example, if you got a new Scotiabank Gold American Express card in June, you’d have 6 months to spend $50,000 and still hit your annual limit. You’d then get an additional 6 months’ worth up to $50,000 in spend (or 250,000 Scene+ points equal to $2,500) before your annual fee even renews.

On the other hand, many products like the American Express Platinum Card and the BMO eclipse Visa Infinite Card have now transitioned to having their earn rates or special credits run via card membership year.

For example, the BMO eclipse Visa Infinite Card has a $50 lifestyle credit applied as a statement credit after your first $50 purchase. This was amazing when it was applied via calendar year, as it could be enjoyed on a new card in December and then again in January. Now you only get the second $50 after 12 statement periods elapse. 

As if this weren’t complex enough, CIBC has its own annual rewards structure. As far as CIBC is concerned, your December statement is when Santa resets your annual limits. What that means is that the day after your December statement is when all is forgiven and you get your limit back.  

However, increasingly, some cards are going to a model of monthly caps. The National Bank World Elite Mastercard is one example, as its 5x eats and drinks category caps out at $2,500 a month. It probably learned this from the famous and loved American Express Cobalt Card, which has that limit to prevent abuse.

But does monthly mean monthly, like from the 1st to the 31st? Nope, usually it means per statement period. That means that if, for example, your statement is issued on the 17th of a month, then you have from the 18th to the 17th of this month to the 18th of next month to earn up to the monthly cap. A bit confusing, eh?

This can be frustrating if your big expenses fall on a certain day, or your daily expenses simply won’t maximize the cap in a given month.

Canadian Credit Card Spending Caps: Details & Maximizing Value

Everything above can be a lot to take in, so I’ve made the following table detailing some of the more popular cards in Canada instead. It shows you what type of earn rate each major Canadian credit card has, the best/highest earning category cap, and its limits per month or year. 

Many of the cards not appearing on this list, such as the RBC Avion Visa Infinite Card, have no cap on their multiplier categories. There are also cards like the American Express Business Platinum and Scotiabank Platinum American Express Card, which have flat earn rates that never degrade, no matter how much you spend.

The card of the highest value here is without a doubt the American Express Cobalt Card, though just about every other 5x card can stake a claim to being useful on this chart. If you can regularly use it for dining out and grocery purchases, the value you can expect to receive is unmatched.

You can also see that there’s a lot of competition for the grocery and dining segment. This isn’t surprising as it’s the biggest category Canadians spend on, but nonetheless, it does mean you should be tactical about choosing which credit card to use.

If you want to dig a bit deeper to maximize your spending, check out our articles on the best credit cards for grocery purchases and the best credit cards for dining out.

Canadian Credit Card Benefit Credit Caps: Details & Maximizing Value

It should be noted that there’s a pile of credits available per year in Canada. The most notable are those attached to the American Express Platinum Card and the American Express Business Platinum Card.

Both products share an annual $200 Travel Credit. Let’s be clear: this is a product given based on your statement date. So you don’t get it every calendar year; only theoretically after paying each annual fee.

On the other hand, the personal card only has the $200 Dining Credit, good at a curated list of premium restaurants. This one is done by calendar year, so if you’re born early in the year like me, you can totally feel free to use it to buy a Christmas dinner in December and then a birthday one a month later in January.

The most important credits to keep an eye on are the lifestyle ones attached to both the BMO eclipse Visa Infinite and the BMO eclipse Visa Infinite Privilege cards. These cards come bundled with a $50 and $200 lifestyle credit, respectively, but they are tied to your card membership year.

To get your money’s worth, simply make a purchase exceeding either $50 or $200 right after the annual fee renews to get your credit to post. Of course, this also means you can make sure the annual fee is worth keeping, even with that reduction in mind.

Conclusion

If your head is spinning after all that, don’t worry, you’re not alone. The world of credit card caps, whether they’re annual, monthly, or based on some bizarre statement cycle only a bank could invent, is deliberately complex.

At the end of the day, understanding these limits is the difference between earning a trickle of points and a firehose. It’s about knowing when to switch from your American Express Cobalt to your Scotiabank Gold Amex to ensure you’re never leaving a 5x multiplier on the table.

The strategy is simple: know the spending cap rules for the main cards in your wallet. A quick calendar reminder for when your annual caps reset can save you from accidentally earning a paltry 1x on a major purchase. The banks set the rules of the game. By understanding the fine print, you’re playing to win.