Most Canadians know the benefits of belonging to an association like CAA. For a small annual fee, you get 24-hour roadside assistance, competitive insurance rates, travel planning and discounts on a wide variety of items.
What many Canadians don’t know is that CAA offers a great line-up of credit cards for members to save and earn points.
The true benefit of the CAA MasterCard is realized if you are a CAA Member. As you use your MasterCard, you earn CAA Dollars which you can apply towards any CAA product or service.
Related: How To Earn Aeroplan Miles
You’ll grow your CAA Dollars with every eligible purchase you make with the CAA MasterCard. Then, you can redeem for things like membership renewal fees and upgrades, the latest travel merchandise, your next cruise, flight or hotel, and more.
Every CAA Dollar you earn is equivalent to $1. Here is a list of partners you can use your MasterCard and save and earn CAA dollars:
CAA has three cards for you to choose from; the CAA No Fee MasterCard, the CAA Premium MasterCard, and the CAA Low Rate MasterCard. Here’s how they work:
CAA No Fee MasterCard
With the no-fee card, you’ll earn 1% in CAA Dollars with each eligible purchase, and get 2% back at Husky gas stations. The interest rate is 17.99%. This card offers basic insurance protection on purchases and while travelling.
Related: Save On Foreign Conversion Fees Using These Two Credit Cards
You’ll need to spend $6,700 a year to earn enough CAA dollars to cover a basic annual membership ($67) and $13,700 a year to cover the premium membership fee ($137).
CAA Premium MasterCard
With the premium card, you’ll earn 1.5% in CAA Dollars with each eligible purchase, and get 2.5% back at Husky gas stations. This card comes with a $99 annual fee, and an interest rate of 19.99%.
In addition to the larger earning potential you’ll also get added insurance coverage, including car rental, flight delay and trip interruption protection.
When you spend $6,700 a year, you’ll earn $100.50, which just offsets the annual fee (note: although you can’t redeem CAA Dollars towards your annual fee).
To justify the annual fee, you’ll need to spend $20,000 a year on your CAA Premium MasterCard, which will earn you $201 a year, net of fees.
CAA Low Rate MasterCard
If you carry a balance from month-to-month, CAA offers a low rate card. At 11.99%, the Low Rate MasterCard is a decent option. It comes with a $29 annual fee, but unlike most low rate cards, the CAA card still allows you to earn rewards.
You’ll get 0.5% back on eligible purchases, including at Husky gas stations. The insurance benefits are the same as you get with the no fee MasterCard.
With the low rate card, you’ll only need to spend $5,800 to offset the annual fee, but be careful. The purpose of a low rate card is to keep your interest costs down on your monthly balance.
Final Thoughts
CAA offers a wide variety of savings, discounts and benefits to its members. If you’re already a member, then the CAA MasterCard’s are worth a look. The rewards are comparable to other cards like the PC MasterCard, and you can easily redeem points for things you need.
The MBNA Smart Cash Platinum MasterCard has been one of the best cash back credit cards in Canada for a few years, but when TD bought MBNA’s Canadian credit card business last December, we knew changes would be coming.
That belief was confirmed earlier this week when MBNA, Canada’s fourth largest credit card issuer, announced changes to the Smart Cash rewards program that significantly reduces your ability to earn cash back.
MBNA Smart Cash Changes Explained:
Effective December 1st, 2012, the amount of cash back you can earn on gas and grocery purchases will be reduced from 3% on your first $600 in monthly spending to 2% on your first $400 in monthly spending.
You’ll continue to earn 1% cash back on all other purchases, including gas and groceries over and above $400 a month, but MBNA Smart Cash Platinum cardholders will have their 1% cash back earnings capped at the first $1,250 in monthly spending.
If you’ve been upgraded to the Smart Cash World MasterCard, there’s no cash back earn limit, but the other reductions still apply.
For new customers, these changes take effect immediately.
MBNA Canada has sent out letters to existing customers advising them of the changes to their rewards program.
The majority of MBNA’s Smart Cash customers currently have the Smart Cash Platinum card, which has been in market for a few years now. Last year, MBNA introduced the Smart Cash World MasterCard.
Smart Cash Platinum cardholders with personal income of $60,000 or greater or total household income of $100,000 or greater can request an upgrade to Smart Cash World.
By upgrading, you’ll again receive up to 5% cash back on gas and grocery purchases for the introductory six months.
When I spoke with MBNA, they wouldn’t say why they were making these changes, but said they regularly review their products and will make changes to improve their business while trying to remain competitive in the market.
“We still feel the Smart Cash World MasterCard is one of the best no-fee cash back credit cards on the market,” said Cathy Velasquez, Media Relations at MBNA Canada.
But a closer look at the numbers reveals a steep decline in potential cash back earnings with the new Smart Cash credit card.
Before these changes, when you spent $1,000 a month and took full advantage of the gas and grocery spending bonus ($600 a month) you could earn $336 in the first year and $264 in subsequent years.
Now, when you spend $1,000 a month, and max out the gas and grocery multiplier, you’ll earn just $240 in the first year and $168 in subsequent years. That’s a decline of 29% in the first year, and 36% thereafter.
Final Thoughts
If you’re an existing Smart Cash cardholder, you might be evaluating your need for a new cash back credit card.
The Capital One Aspire Cash World MasterCard might be your best option, depending on how much you spend each month.
At $1,000 a month spending with Capital One Aspire Cash, you’ll get $280 back in the first year and $180 back in subsequent years.
The RBC Cash Back MasterCard is also worth a look. You’ll get 2% cash back on groceries and up to 1% back on all other purchases.
The bottom line: MBNA Smart Cash used to be the undisputed cash back king in Canada, but these changes from MBNA will take a big bite out of your rewards.