Many options areu available to you if you’re looking for the best cash back credit cards in Canada. According to a 2021 report by Payments Canada, of the 88% of credit cards in Canada that offer rewards programs, 41% of them give cash back.
However, not all cash back cards are created equal, so doing some research is necessary before choosing one. Top contenders from various card categories are included in our list of the best cash-back credit cards in Canada, allowing you to pick the card that will work best for your spending patterns and financial objectives.
Key Takeaway
- What is a cash-back credit card?
- The 8 best cash back credit cards in Canada
- Pros and cons of a cash back credit card
What is a cash-back credit card?
Cashback credit cards allow you to earn money from the money you spend by either paying you back a percentage of what you spend or rewarding you with reward points.
They only make sense if you pay off your balance in full each month and never exceed your credit limit. Otherwise, the cost of interest will outweigh the benefits.
Each of the cash back credit card has its own set of features and benefits, so compare the annual Fee, earning rate, and any additional benefits before applying.
Types of cash back cards?
Flat-rate cash back, tiered cash back, and rotating cash back are the three main ways to earn cash back from a card.
- Flat-rate cash back: The most straightforward way to earn cash back is with a credit card that offers the same amount of cash back on every purchase. These cards are ideal for people who don’t want to waste time trying to maximize credit card rewards. However, they do not always provide the highest cash back rate.
- Tiered cash back: While this type of cash back card may offer more cash back than a flat-rate card, your cash back will be limited to a certain number of purchases. Tiered credit cards come in a variety of categories, each with a different amount of cash back. To make the most of this type of cash back card, you must keep track of how much you spend in various cash back categories.
- Rotating cash back: Similar to tiered cash back, this type tends to offer more cash back but on a limited number of purchases. The difference is that rotating credit cards have bonus categories that change every quarter and require activation. So, if you’re not the type to remember to sign up for cash back, this card might not be for you.
The Pros and cons of a cash-back credit card
Pros
- Ease of use; Cash-back cards make it simple to earn valuable rewards.
- Welcome bonuses and also introductory offers can be quite generous.
- Reward points can be used to reduce your card balance.
- High earning rates for items you buy on a regular basis can result in significant rewards.
Cons
- You may not typically purchase items with above-average earning rates.
- Amassing rewards can be very slow depending on how much you spend each month and whether you pay your bill in full.
- Bonus and introductory offers frequently include conditions, such as spending minimums, that can be difficult to meet.
list of 8 best cash back credit cards in Canada for 2023
Below is a list of the top cash back cards available in Canada for you, and they include the following:
1. SimplyCash Preferred Card from American Express
This card is the most straightforward and without a cap and also one of the best cash back credit cards in Canada, Due to the fact that you don’t have to worry about what rate of cashback you’re getting for which purchase category, Instead, you receive a flat rate of cash back, forever and on all purchases, with no spending limit. This card is the one to get if you just want to get your cash back without having to think about anything.
Rewards:
2% cash back on every purchase with no limit.
Welcome Offer:
Get 10% cash back on purchases for the first six months of card membership (up to $400).
Annual Fee:
$119.88 (monthly payment of $9.99)
Other Benefits and Drawbacks:
This card offers the highest welcome offer for cash back rewards of any cash back card in Canada ($400), in addition to a consistent flat rate of cash back. Apart from the fact that the annual Fee increased in October from $99 to 12 payments of $9.99 for a total of $119.88 per year, this card hasn’t many disadvantages.
2. BMO CashBack World Elite Mastercard
On many other “Best of” lists, this card is the reigning champion for 2023. However, in terms of annual cash back earnings, it is somewhat limited. Despite this, it’s still a good rewarding card with some seriously high cash back rates on certain purchases, most notably groceries (at least at the beginning of every month for families and potentially the whole month for single individuals).
Rewards:
Cash back of 5% on eligible grocery purchases up to $500 per statement. Ground transportation purchases are eligible for 4% cash back on the first $300 purchased per billing cycle. 3% cash back on the first $300 in gas and electric vehicle charging purchases per billing cycle.
You’ll also get 2% cash back on your first $500 in recurring bill payments, such as a subscription or gym membership. Finally, you will receive 1% cash back with no limit on all other purchases.
Welcome, Offer:
Up to $260 in cashback in your first three months on purchases of $2,600 (before December 6, 2023). The annual Fee of $120 is also waived for the first year.
Annual Fee:
$120
Other Benefits and Drawbacks:
Even though the BMO CashBack World Elite offers the highest cash-back rate in Canada on groceries (5%), it also offers a nearly equal rate on ground transportation and electric vehicle charging (4%).
The problem is that both categories are hard-capped at $500 per month: $500 for groceries and $300 for ground transportation and electric vehicle charging.
This is the only reason it isn’t higher on the list, as the annual cash back earnings are less generous than with higher-tier cards. Meanwhile, if you are under age 65, you will receive $2 million in emergency travel medical insurance for up to eight days of your trip.
3. CIBC Costco World Mastercard
This card offers $422.58 in annual cash back if you make the majority of your purchases at Costco. Along with other World Mastercard benefits like car rental insurance, travelers can also enjoy free Wi-Fi at Boingo hotspots and access to airport lounges through Mastercard Travel Pass.
But keep in mind that you must earn $100,000 in household income or $60,000 in personal income each year to be eligible for this card.
Rewards:
Cardholders receive 3% cash back at restaurants and on Costco gas (with a $5,000 annual cap on Costco gas purchases). Additionally, they receive 2% cash back at other gas stations and on Costco.ca purchases (with a yearly cap of $8,000).
When the caps are reached in the relevant purchase categories within a given year, they will also receive 1% cash back on all other purchases.
Welcome Offer:
None
Annual Fee:
$0 (it requires Costco membership: $60 for Gold, $120 for Executive)
Other Benefits and Drawbacks:
Although there isn’t an annual fee for this card—in theory, at least—you need a Costco membership to get one, and that membership’s annual Fee ($60 for Gold and $120 for Executive) practically counts as an annual fee.
Aside from that, this card shouldn’t be used by those who rarely or never shop at Costco due to the stark difference in annual earnings: $422.58 in cash back earned with Costco purchases versus $367.62 without any.
4. Scotia Momentum Visa Infinite Card
Not only does this card offer a high 4% cash-back rate on groceries and recurring bills, as well as 10% cash back on $2,000 spent in the first three months, but you also get 11 types of insurance (and one optional type), including the extremely rare mobile device insurance.
Rewards:
Receive 4% cash back for every $1 you spend on subscriptions, recurring payments, and grocery store purchases. For every $1 you spend on gas and daily transit, you’ll earn 2% back (including Uber). Additionally, 1% cash back is available without a cap on all other purchases.
Welcome Offer:
10% cash back on purchases up to $2,000 in the first three months.
Annual Fee:
$120
Other Benefits and Drawbacks:
This card has the most insurance options on the list in terms of insurance benefits. Even though the annual Fee is $120, you get a ton of value for that money, including $1 million in emergency travel medical coverage for 15 days and $1,000 in mobile device insurance.
The only significant drawbacks are the $60,000 annual personal income and $10,000 annual household income requirements.
5. Simplii Financial Cash Back Visa
This card is appealing to social butterflies and urbanites because it offers generous cash back rates on bar, restaurant, and also coffee shop purchases.
Furthermore, if you tend to carry a balance, you’ll appreciate the lower promotional purchase interest rate of 9.99% for 6 months, which allows you to pay down your debt before the APR returns to the more standard 19.99%.
Rewards:
Cardholders receive 4% cash back on purchases at bars, coffee shops, and restaurants up to $5,000 per year. They also receive 1.5% back on eligible gas, grocery, and drugstore purchases and pre-authorized payments of up to $15,000 per year.
Welcome, Offer:
10% cash back at bars and also restaurants for the first four months up to a $500 spend.
Annual Fee: $0
Other Benefits and Drawbacks:
While the cash back rewards at restaurants, coffee shops, and bars are fantastic, the cash-back rate for any other purchase drops dramatically, with only 1.5% cash back for everyday necessities like gas, groceries, and drugstore purchases. This is quite a reversal given that these everyday purchase categories are typically the mainstays of most cash back cards.
However, if one lives in a big city and rarely drives or cooks at home, this card could be ideal for you. You can also rest easy knowing that you’ll get an extra $50 cash back if you spend a maximum of $500 in the first four months on restaurant, bar, and coffee shop purchases. However, if you’re looking for insurance coverage, this card only offers extended warranty and purchase protection plans. It only makes this list because of the high rate of cash back in its featured purchase categories.
6. Rogers World Elite Mastercard
This card may appear to give you a discount on your Rogers phone, internet, and cable bills (it doesn’t), but for people who make the majority of their purchases in US dollars, it’s a sleeper hit. If you buy a lot of things in US dollars, you should consider this card because it offers the highest cash back rate.
Rewards:
3% cash back on purchases in US dollars and 1.5% cash back on all other purchases, with no spending limit.
Welcome Offer:
$25 when you make your first purchase within three months.
Annual Fee:
$0
Other Benefits and Drawbacks:
The World Elite status of this card entitles you to a slew of travel and insurance benefits, including rental car insurance and also access to 1,300 airport lounges worldwide via the Mastercard Travel Pass app, which DragonPass powers.
However, it should be noted that, aside from the high rate of cash back on US dollar purchases, there is not much here, and that’s with the income requirement of maintaining $15,000 in annual income to remain eligible.
Since rental car insurance is secondary, it will cover any theft, damage, or loss not already covered by your primary auto insurance. While Mastercard Travel Pass membership is free, using this credit card to access an airport lounge still carries a fee. Be mindful that each participation costs $32 USD ($41.72 CAD) per person.
7. CIBC Dividend Visa Infinite Card
Even with an annual fee of $537.50, this card offers you the highest annual cash back earnings in Canada. Your annual cash back earnings can reach a maximum of $657.50 with the first year’s annual Fee waived.
Rewards:
Earn 4% cash back on gas and groceries purchases and 2% cash back on dining, transportation, and recurring bills or payments. But there is a limit: annual gas and grocery purchases of up to $20,000 or annual net credit card purchases of up to $80,000 (whichever comes first). Furthermore, with no limit, you will receive 1% cash back on all other purchases.
Welcome, Bonus:
10% cash back on net purchases of $2,000 in the first four statements of the first year.
Annual Fee: is $120.
Other Benefits and Drawbacks:
The CIBC Dividend Visa Infinite is among the best cash back credit cards in Canada; the Card offers a substantial amount of cash back each year, as well as a $200 welcome bonus and eight different types of insurance.
However, the $120 annual fee reduces the cash back you receive in the first year, and you must pay to play due to the high-income requirements of $60,000 in personal or $100,000 in annual household income required to qualify.
8. Scotia Momentum Visa Card
This card is the non-Infinite version of the Scotia Momentum Visa. It has a more affordable $39 annual fee, a lower $12,000 annual income threshold, and a straightforward cash-back structure.
Even though the cash back isn’t as high as the Visa Infinite card, it still offers a respectable annual value, and if you carry a balance, the balance transfer interest rate is fantastically promotional. If you want to reduce your debt, look to this card.
Rewards:
On purchases of gas, groceries, prescription drugs, and recurring bills, cardholders receive 2% cash back, with a $25,000 annual cap on gas and groceries. On all other purchases, they also receive 1% cash back.
Welcome Offer:
None
Annual Fee:
$39
Other Benefits and Drawbacks:
The benefit of 0% interest on balance transfers for six months cannot be overstated. Only a few credit cards in Canada offer low promotional balance transfer rates. When it comes to drawbacks, it’s a shame that no purchase categories earn more than 2% cash back on this card.
It would also be higher ranked if the card offered more insurance options than just purchase protection and an extended warranty. It’s also a disadvantage that it has no income requirement at all.
Read Also:
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FAQs
Is 5% cash back worth it?
A 5% cash-back card can be valuable if you want to maximize your rewards. They frequently have standard interest rates and no annual fee. These rotating category cards, however, are not for everyone. Optimizing your usage can be time-consuming, and many people dislike the hassle.
Are there any downsides to cashback?
A cash-back rewards card has a few drawbacks, including a higher-than-average APR, having to wait to access your cash-back funds and a yearly limit on how much you can earn. Furthermore, when it comes to travel rewards such as airline miles, the miles can sometimes be worth more than the cash. Experian.
Is it better to use cash or credit in Canada?
Whenever possible, use a credit card instead of cash. Credit card companies typically charge fees for international transactions, and you may get the best exchange rate and fees that are lower than those associated with cash exchange.
Do shoppers do cash back in Canada?
You can get 1% cash back on drugstore purchases, gas, and groceries. However, if you use Shoppers to make your online purchases, you’ll get 1.5% cash back instead (you still get 0.5% back on everything else).
You can learn more from the video below:
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