Canadians love to collect travel points, and over the years credit card companies have branched out from the traditional Air Miles and Aeroplan credit cards (or their own rigid loyalty programs) and now offer a wide range of travel options for consumers.
While collecting travel points may not be the most practical rewards choice for some people, there’s no denying that these programs can be extremely lucrative.
In the latest MoneySense Magazine they ranked the best travel rewards credit cards on the market. Here’s a look at the overall top 10:
Best Travel Rewards Credit Cards
- Capital One Aspire World MasterCard
- CIBC Aventura World MasterCard
- CIBC Aerogold Visa Infinite
- CIBC Aerogold Visa
- CIBC Aventura Visa Infinite
- BMO World Elite MasterCard
- CIBC Aventura MasterCard
- American Express Blue Sky
- Capital One Aspire Gold MasterCard
- American Express Air Miles
Unlike a cash back credit card, it can be difficult to determine the value of your travel points because there are so many variables involved. You have to take into account the value of your hotel room, flight and other benefits. And depending on the destination that you’re travelling to and the type of hotel, that can almost be impossible to figure out.
Thankfully, MoneySense did the work for you and calculated the value of your points based on your monthly spending level and the city that you’ll fly out of. Let’s take a look at the winners based on flying out of Toronto:
Annual cash value of travel points if you spend $1,000/month
- Capital One Aspire World MasterCard – $290.00
- American Express Blue Sky – $170.00
- Capital One Aspire Gold MasterCard – $138.00
Annual cash value of travel points if you spend $4,000/month
- Capital One Aspire World MasterCard – $1,010.00
- BMO World Elite MasterCard – $819.00
- CIBC Aventura World MasterCard – $656.75
Now here is a look at the winners based on flying out of Calgary:
Annual cash value of travel points if you spend $1,000/month
- Capital One Aspire World MasterCard – $290.00
- CIBC Aventura World MasterCard – $179.81
- CIBC Aerogold Visa Infinite – $179.81
Annual cash value of travel points if you spend $4,000/month
- Capital One Aspire World MasterCard – $1,010.00
- CIBC Aventura World MasterCard – $924.19
- CIBC Aerogold Visa Infinite – $924.19
There are two important points that stand out to me from this list. First, the Capital One Aspire World MasterCard is by far the best travel rewards credit card, regardless of where you live or what your spending levels are. It’s not even close, so if you like redeeming your rewards for travel you need to get your hands on this credit card.
The second point is that the cash value from travel rewards credit cards easily dwarf those from cash back and retail rewards cards (beating the MBNA Smart Cash MasterCard to the tune of $250 a year), but consumers need to ensure that it’s in their best interests to collect travel rewards rather than redeeming points for gift card rewards or cash back.
Travel typically incurs an expense over and above the redemption of rewards, but if you’re comfortable with that fact and you prefer to stock up on travel points to supplement your annual vacation expenses, you can’t go wrong choosing one of the best travel rewards credit cards listed here.
While travel points are still the most popular reward credit cards in Canada, lately there has been a push in favour of cash back credit cards.
For people like me, collecting travel rewards is not the best value for my spending habits and lifestyle. I like to put cold-hard cash back in my wallet every month to help supplement my everyday spending.
In the latest MoneySense Magazine they ranked the best cash back credit cards on the market. Here’s a look at the overall top 10:
Best Cash Back Credit Cards
- MBNA Smart Cash MasterCard
- Capital One Aspire Travel World MasterCard
- Capital One Aspire Cash Platinum MasterCard
- Capital One Aspire Cash World MasterCard
- Scotiabank Momentum Visa
- Scotiabank Momentum Visa Infinite
- MBNA Premier Rewards Platinum Plus MasterCard
- CIBC Dividend One MasterCard
- CIBC Dividend Unlimited World MasterCard
- CIBC Dividend Visa Infinite
Note that some of these are not marketed as cash back credit cards but your travel points can be converted to cash.
In order to determine the best rewards card for your own situation, you need to analyze your spending habits and figure out how much money you spend each month. There is no point getting a top cash back card with an annual fee if you only spend $1,000 a month.
With that in mind, MoneySense worked out a few scenarios to determine which credit card comes out on top based on your monthly spending.
Annual cash back if you spend $1,000/month
- MBNA Smart Cash MasterCard – $199.20
- Capital One Aspire Travel World MasterCard – $172.50
- Capital One Aspire Cash Platinum MasterCard – $154.00
- Scotia Momentum Visa Infinite – $141.00
- Scotia Momentum Visa – $129.00
Annual cash back if you spend $4,000/month
- Capital One Aspire Cash World MasterCard – $764.00
- Capital One Aspire Travel World MasterCard – $712.50
- MBNA Smart Cash MasterCard – $638.40
- Scotia Momentum Visa – $633.00
- CIBC Dividend Visa Infinite – $616.00
Apparently the methodology used to rank the best cash back credit cards in Canada took into account the annualized amount of cash back you would receive in the first 5 years after paying any annual fees. Any sign-up bonuses were also included in the rankings.
I was pretty happy to see who came out on top of this list, since I just switched to the Smart Cash MasterCard a few weeks ago. It wasn’t a surprise to me though; I did my research based on my spending habits and came to the same conclusion when I looked for the best cash back credit cards.
What do you think of the best cash back credit cards list?