I’m always mystified as to why Canadians love paying for everything with their debit cards. We pay for the privilege of using our debit cards through excessive bank fees and limited monthly transactions. Not only that, but we don’t earn rewards for using our debit cards the way we do with rewards credit cards.
So enter the Scotia Moneyback Account, the only chequing account that pays you a 1% rebate with every purchase on your debit card. Let’s take a look at how it works:
Scotia Moneyback Account
With the Scotia Moneyback Account, every purchase you make on debit gives you 1% cash back. Your account also comes with other features, including:
- Unlimited self-service transactions
- Two free non-Scotia ABM transactions/month
- One teller assisted transaction/month
- Free paperless statements
- Free text and/or email alerts to help you manage your account
- Monthly fee of $14.95/month
The maximum annual rebate for the Scotia Moneyback Account is $300, meaning if you spend $30,000/year on your debit card you will receive the full $300 rebate.
But with a steep monthly fee of $14.95, that only works out to a $120 profit for the year. In fact, Scotia Moneyback Account holders would need to spend at least $18,000/year ($1,500/month) on their debit cards just so the rewards would cancel out their monthly account fees.
Worst Chequing Account Ever?
Most banks offer a chequing account with unlimited monthly transactions plus some additional features, which is essentially what the Scotia Moneyback Account is trying to do here. The problem is that the math just doesn’t add up. Even if you maximize this account to earn the $300 rebate, you’re still out $180 in bank fees for the year.
Scotia’s marketing tactic is to try and mimic a rewards card by offering a rebate back on your every day spending. I’m all for rebates, but with the PC MasterCard I wouldn’t have to pay an annual fee and if I spent $30,000/year I would earn $300 worth of PC Points.
With a cash back credit card like the MBNA Smart Cash MasterCard you could earn $372 in cash rewards with no annual fee for that amount of spending.
The Scotia Moneyback Account definitely had the right idea by trying to capitalize on the popularity of rewards cards and integrating it into an unlimited debit card program. They might lure some loyal debit card users to try it, since it might save them money vs. their existing account.
I just don’t see any benefit to using a chequing account like this one over using a no fee rewards credit card for all of your purchases. If I was able to spend $30,000 a year on stuff, I could certainly make a lot more than $120 in rewards at the end of the year.
What do you think of Scotia Moneyback?
I’m not much of a traveler these days, with a young family at home. Still, I love collecting rewards through loyalty programs like Air Miles. I can typically earn between 100 and 200 Air Miles every month by shopping at sponsor locations like Safeway and Shell, and then using my Air Miles credit card for most of my everyday spending. But even though I’m racking up the points every month, I’m not saving up for a flight or a dream vacation. I prefer to redeem Air Miles for gift cards to spend on movies, gas and groceries to help supplement my monthly budget.
Redeem Air Miles for Movie Gift Cards
Possibly the best value for your Air Miles rewards is to redeem Air Miles for movie gift cards. A night at the movies isn’t cheap anymore, so treating yourself to some movie rewards is a great way to subsidize your entertainment costs. For 175 Air Miles you get a movie package that includes 2 free admissions, 2 regular soft drinks, and 1 regular popcorn. 175 Air Miles is worth approximately $20, and considering it costs about $10 per movie ticket these days, you can see the great value you’re receiving with this redemption.
You can redeem Air Miles for movie gift cards to both Empire Theatres and Cineplex Theatres, making this one of the few rewards that are redeemable all across the country. Single movie passes are also available for 75 Air Miles.
Redeem Air Miles for Gas Gift Cards
Although the movie gift cards are the best value, I see entertainment as more of a discretionary spending category. My favorite way to redeem Air Miles is for gas gift cards. For 175 Air Miles you get a $20 gas gift card to use at Shell gas stations. I can typically earn enough Air Miles to get a $20 gas gift card every month, and last year I was able to subsidize my fuel purchases by earning $360 in gas gift cards from Air Miles. Since I need to gas up my car every week or two, I like that I can use my Air Miles to help offset my fuel expenses.
Redeem Air Miles for Groceries
One thing that remains a mystery to me is why you can’t redeem Air Miles for groceries at Safeway. They are a sponsor location where you can earn a ton of bonus Air Miles through various promotions each month, yet they don’t offer any gift card rewards for their stores. Unfortunately for shoppers in Western Canada there are no options available to redeem Air Miles for groceries. Fortunately for those of us in Eastern Canada we have a few options at grocery stores and pharmacies:
- Metro – $20 gift card (175 Air Miles)
- Jean Coutu – $20 gift card (175 Air Miles)
- Sobey’s – $20 gift card (175 Air Miles)
- Rexall Pharma Plus – $25 gift card (225 Air Miles)
Like with the gas gift cards, groceries are something we just can’t live without. It’s nice to be able to save $20 or $30 on your grocery budget each month just by cashing in your rewards points.
For those of you who don’t save up your Air Miles for traveling, what do you like to redeem Air Miles for?