5 Best Cashback Cards in Canada

Cashback credit cards can be counted as rewards cards. Cashback cards can be used to earn cash rewards on purchases. Cashback cards are easier to use as the reward is cash. 

There are two types of reward cards available. Cashback cards are one of them. Using a cashback card, you can earn a percentage of cash back as a reward on each purchase. For example, your cashback card offers 5% cash back on easy purchases, so if you make any payment using that card you will get 5% cashback as a reward. 

All cashback credit cards offer you to convert your rewards into cash. You can transfer the rewards as cash directly to the bank account. Some travel cards also offer cashback as a reward but you might get less amount if you choose cash back as a redemption option. 

Types of Cash-Back Credit Cards

Cashback credit cards can be categorized into two major categories. These are: 

Flat-Rate Cashback Cards

Flat-rate cashback credit cards offer a single rate for cashback on any purchases. Previously, the standard cash-back reward rate was 1% but now most of them offer 1.5% to 2% as a standard cash-back rate. Some of the cards have an annual fee or other fees. Those fees were changed from the reward amount. For those who do not want to spend a lot of time on finding credit card rewards programs, flat-rate cards are the best fit for them. Flat-rate credit cards let you know exactly how much you are earning on each purchase.

Advantages

 It is a hassle-free cash-back card. Flat-rate cash-back credit cards are very easy to use as you do not think much about better offers. You will receive the same amount of rewards on every purchase and every purchase is eligible for cash back. Moreover, those cards usually don’t have any annual charge.

Disadvantages 

The main disadvantage is the reward rates do not usually exceed 2 percent. Most of the cards offer 1 to 1.5 percent cash back on every purchase. You will receive a fixed amount of cash back on every purchase. No matter how many products they purchased, the cashback amount will be the same. It does not come with other benefits except cashback.

Bonus Categories or Tiered Rewards Cards

Some cards offer a certain range of cashback rewards depending on where you use the card. These cards are categorized based on the bonuses they offer. Dining cards give cashback offers at restaurants, and gas cards give cashback offers at gas stations. This card has a flat rate of 1 percent cash back on other purchases. These cards come with a limited amount of bonus cash back for earning each quarter or year. It can be the best option for those who spend most of their money on a specific type of purchase.

Advantages 

This card comes with a higher percentage of cash back in selected categories. Bonus category cash back cards mostly offer 5 percent cash back on specific spending which is significantly higher than the flat-rate cards. Bonus category cards give you a higher rate in different categories. With planning you can avail the best cash-back offers in a different category.  

Disadvantages 

Bonus category cards have a spending cap. The spending amount depends on the card. If you reach a certain spending limit, your rewards rate will lower down to 1 percent. Another disadvantage is you can only earn a higher cashback on specific categories. It is hard to maximize rotating bonus categories. Rewards usually vary quarterly with bonus category cards, so it will be hard to get the maximum rewards without planning. Quarterly activations are sometimes required. On each quarter, rotating bonus category cards require an active new bonus. Failing to activate, results in a lower bonus rate.

Top 5 Cashback Cards in Canada

There are many cashback cards available in Canada. Here are the top 5 listed: 

BMO Cash Back World Elite Mastercard

The BMO Cashback World Elite Mastercard has the highest cashback rate in Canada on grocery shopping. It has an annual fee of $120 but it can be waived for the first year. 

Key Features: 

• 10% cashback up to $260, on purchases for the first three months 
• Highest cash-back on groceries in Canada which is 5% on spending amount of first $500 per period. After reaching the limit you can enjoy 1% unlimited cash back. 
• 3% cashback on gas stations on the spending of the first $300. 1% flat rate after reaching the spending limit.
• 4% cashback on the first $300 spent on transportation. This includes ride-sharing, taxis, and public transportation. Once the limit, enjoy 1% unlimited cash back. 
• Get 2% cashback on recurring bills such as phone, gym, or any streaming services.

Pros

• Competitive welcome bonus for the first three months.
• Highest cash-back rewards on grocery purchases.
• Automatic cash back.

Cons

• A high annual charge
• Have a spending limit on each category. 
• For an individual, a minimum annual income is $80,000 and $150,000 for a household.

Scotia Momentum Visa Infinite Card

The Scotia Momentum Visa Infinite is one of the best cards in Canada. Offers a bonus in some of the spending categories during inflation, and it has travel insurance coverage for all cash-back cards.

Key Features: 

• Get 10% cash back for the first $2000 spent within the first three months
• Earn 4% cash back on groceries and recurring payments
• Earn 2% cash back on gas stations and transportation.
• Earn 1% cash back on any other purchase without any limit.
• It offers travel insurance including flight delay, baggage loss, and trip cancellation.
• Rental car damage coverage.
• Coverage for mobile devices is up to $1,000.
• 25% discount on car rentals.
• Visa Infinite benefits on hotel upgrades.

Pros

• Up to 4% cash back on groceries.
• Travel insurance coverage
• Waiver in the first-year annual fee

Cons

• Cash-back rewards are paid once a year.
• Welcome bonus looks more attractive than the actual.

TD Cash Back Visa Infinite 

This card comes with 3% cash back on your essential spending, such as gas and groceries, and 1% cash back on others. The TD Cash Back Visa Infinite is a hassle-free way to earn cashback. It can be listed as one of the best cash-back cards in Canada. 

Key Features:

• Enjoy 10% cashback up to $3,500 on any purchase for the first three months. 
• Annual fee rebate available for the first year
• 3% cashback on groceries, gas, and bill payments. 
• 1% cash back on everything else.
• The spending limit is $15,000 for the 3% category, 
• No spending limit for the 1% category. 
• Minimum 10% off on all budget car rentals in Canada and 5% off in the USA. 
• Up to $2 million in travel and medical insurance for 10 days. 

Pros

• Earn cash-back rewards in every category.
• Redeem cash-back rewards at any time.
• Medical insurance and travel benefits.

Cons

• You can only use cash-back rewards against your statement balance.
• No balance transfer offer.

CIBC Dividend Platinum Visa Card

It offers one of the highest rates available in Canada. It allows you to earn on spending over essentials like groceries, gas, bills, and more. This card can be the best option for anyone who spends highly on gas filling stations or in supermarkets.

Key Features: 

• No annual fees for the first year
• Add three authorized users for $30 each. Enjoy the first year rebated.
• 3% cash back on groceries and gas. The spending limit is $20,000 annually.
• On dining, bill payment and transportation services earn 2% cashback. The spending limit is $20,000 annually.
• Make any purchases below $80,000 and get 1% cashback. 
• Insurance coverage and purchase protection.
• Save up to 25% off on car rentals 

Pros

• High earning options
• Redeem your cash back any time.
• Save up to 10 cents per liter of gas.

Cons

• A minimum household income of $15,000 is required annually. 
• It comes with an annual fee of $99 but is waived for the first year.

Tangerine World Mastercard

This card gives you the option to choose where to earn extra cashback with no spending caps. This card has no annual fee.

Key Features: 

• Earn 10% cash back as a welcome bonus for the first two months. But with a limit of $1000.
• No annual fee.
• Get 2% cash back on any three categories you choose.
• If you deposit your reward into your Tangerine Savings account, you will get 2% cash back on a third category. 
• On all purchases, enjoy 0.5% cashback.
• Cashback can be transferred into your savings account 
• No cash back limit 
• Interest is 1.95% on balance transfers for six months. But you should make the transfer within the first 30 days. 
• Add five authorized users without additional cost.

Pros

• No annual fee.
• Earn 2% cash back in your chosen category.
• Cash-back rewards are paid out monthly without any limit.

Cons

• Compared to others, fewer benefits are offered.
• Only 0.5% cash back on all purchases

There are plenty more cashback cards available in Canada. The best five are listed here according to the available data. This will help you to choose the right card for you.