I only use cash back cards for my personal and business accounts. I’ve used EVERY type of card reward program and I find after all of the fees, taxes, and levies the points cards don’t add up. I much prefer charging my business expenses and only my fixed personal expenses to separate cash back cards and then getting the cash at the end of the year. Last year I earned total $365.75 and only paid $25 for my US$ MC in fees. I’d rather the cash and then shop for the best rate on any airline when I travel.
I’ve crunched all the numbers for the top cash back cards and it looks like they are close to each other rewards while. My thinking is if I only get an extra $50 a year and I have to add a card to my credit rating and get hit a few points for the credit approval – it isn’t worth it. Plus I like the fact that my cash back card is from my bank so I don’t have to check another online banking site for my real time balance.
I crunched the numbers with the following average spend. I don’t include the interest rates because I never run a balance. I’ve also deducted the yearly fee from the cash back amount highlighted.
MONTHLY SPEND
Groceries/Pharmacies $500
Fuel $200
Utilities/Insurance $200
Mobile Phone/Internet $100
Miscellaneous $1500
Total Spend of $2,500 on the card a month
American Express Gold Card: Total cash back towards airline purchases $234 a year
I just found out that American Express gold cards have a cash back option. Earn double points for every $1 in eligible travel purchases charged to the Card, including flights, hotels, car rentals, cruises, etc.. The benefit is you can use points or cash back on the same card.
Earn double points for every $1 in eligible gas, grocery and drugstore purchases charged to the Card. You’ll also earn one point for every $1 in card purchases everywhere else.
You can apply the points as a cash back against your balance once you have more than $50. 10,000 points equals $100 cash back and you get 15,000 free points when you open an account plus the first year’s $150 fee is waived. If you apply the points towards flights that you’ve charged it works equals to a 1% cash back on everything else and 2% cash back on gas grocery, flights, travel and drug stores.
MBNA Smart Cash: Total cash back $468 a year
3% cash back on gas a grocery purchases
1% on everything else
No annual Fee
Once your total equals $50 they’ll mail you a cheque at the end of each billing month.
Scotia Momentum Visa: Total cash back $489
4% cash back on gas and grocery store purchases
2% cash back on drug stores and recurring bill payments
1% on other eligible purchases
$99 yearly fee
BMO CashBack Master Card Premium: Total cash back $299
3% cash back at Shell Stations for gas
1% on everything else
$49 yearly fee
Scotia is the big winner but not by a huge margin. If you have one of the other cards I’d see if it is worth changing based on your spending habits.
Have an awesome week,
Dave
