Credit Cards Canada

The Best Cash Back Credit Cards in Canada

The concept behind cash back credit cards is quite simple. Whenever you buy something using your cash back credit card, you are awarded a small percentage in return for the purchase you made using your cash back credit card. That gives it the name “cash back”, since you are literally getting some of your cash back. The beauty of this technique is that cash back rewards are flexible and you are free to spend them on anything you like. The best cash back credit cards in Canada offer great additional features alongside the cashback as well.

When it comes to reward options in credit cards, cash back is one of the most attractive ones. The biggest reason behind that is its incredible flexibility. Instead of being limited to travel redemptions or merchandise purchases, you’ll have the option to use your cash however you would like. The best cash back credit card for you depends on your spending behavior and earning preferences. 

No two cash back credit cards are identical so you need to consider the annual fee, earn rate, how much are the usage charges to your card and any additional benefits before you apply. If you have the right cash back credit card, you will be able to reap an incredible amount of benefits every time you make a purchase using it. However, before you pick up your cash back credit card, it’d be best if you make a note of your spending habits and do some research about the cards. To help you with that, we have put together a list of the best cash back credit cards in Canada for you. We have also divided our list among different categories so that it becomes easier for you to choose.

Here are the best cash back credit cards in Canada as of 2020:

Best cash back credit card:

Scotia Momentum Visa Infinite

The Scotia Momentum Visa Infinite is a wonderful cash back credit card that gives competitive perks and rewards and comes with a superb welcome offer. Cardholders can earn an impressive 4% cash back on groceries, recurring bills and subscription services—a structure that may well suit large families or households. Transportation expenses—gas and public transit—earn at 2%, and everything else comes in at 1%. Note that there’s a $25,000 cap on qualifying spends in each category; any purchase exceeding that quantity will earn the bottom 1%. There’s also $1,000 in mobile device insurance and $1,500 per person in trip cancellation protection.

Since this is a Visa Infinite card, there is a minimum annual income of $60,000 or a minimum household income of $100,000 required to get the approval for this card. The annual fee—now $120—will be waived for new applicants for the first year.

Annual fee: $120 (first year free)

Welcome bonus: 10% cash back on all of your purchases for 3 months, upto $2,000.

Earn rate: 

  • Groceries, recurring bills and subscription services – 4% cash back
  • Transportation system and gas – 2% cash back
  • Everything else – 1% cash back

Here’s an example with numbers to illustrate this further: Let’s assume you spend $1,000 on groceries per month. With this card, you will be pocketing a neat little $40 cash back from that. Let’s say your monthly expenditure on recurring bills is $300, you will get an additional $12 for that. So that’s $52 from just the first category in a month. What’s more, you can enjoy the welcome bonus earn rate of 10% on all categories of expenditure for the first three months.

Income requirement: $60,000 (personal) or $100,000 (household)

Additional benefits:

  • Mobile device insurance
  • Travel insurance
  • Concierge service
  • Visa Infinite Dining and Wine Country Series

Best cash back credit card for groceries and gas:

Meridian Visa Infinite Cash Back

For many Canadians, the largest and most regular expenses are gas and groceries. For them, finding a cash back card that rewards well on these expenditures is simply good money management.The Meridian Visa Infinite Cash Back tops the list here with a whopping 4% back in both of these categories. You’ll receive 2% on drug store purchases and recurring bills, and the 1% base earn rate on all other purchases sweetens the deal even more. 

The Meridian card also offers a couple of extra features like mobile device insurance and up to 48 days of travel insurance.

Annual fee: $99 (first year free)

Earn rate: 

  • Gas and groceries – 4% cash back
  • Drug stores and recurring bills – 2% cash back
  • Everything else – 1% cash back

Income requirement: $60,000 (personal) or $100,000 (household)

Additional benefits: 

  • Mobile device insurance
  • Travel insurance Concierge service
  • Visa Infinite Dining and Wine Country Series

Best flat-rate cash back credit card:

The SimplyCash Preferred Card from American Express

The SimplyCash Preferred Card from American Express is right for if you spend tons on your mastercard and don’t want to affect different spending categories. You’ll earn 2% cash back on all your purchases, regardless of whether it’s gas, groceries or plane tickets.

Although this cash back credit card has an annual fee of $99, you get an increased earn rate of fifty cash back (up to $300) on all purchases for the initial six months of card membership.

If you’re looking to reduce your debt, you can also take advantage of the optional balance transfer at the time of application. The balance transfer rate is 1.99% for the first six months and you can transfer up to 50% of your credit limit, up to a maximum of $7,500.

Annual fee: $99

Welcome bonus: 5% cash back on all purchases for the first 6 months (up to $300 cash back)

Earn rate: 2% cash back on all purchases

Additional benefits:

  • Referral bonuses
  • Exclusive American Express Invites
  • Optional transfer of balance

Best no-fee cash back credit card with bonus categories:

Tangerine Money-Back Credit Card

If you are looking for a cash back credit card with no fees and extreme simplicity of use and understanding, then the Tangerine Money-Back Card may be a good selection for you. All cardholders get to settle on two categories where they earn 2% cash back. In case you select the option of depositing your cash back directly into your Tangerine Savings Account, you get to avail 2% cash back from a third category. All other purchases earn you 0.5% cash back.

Since this is a no fee cash back card, the additional benefits are few and far between. However, you do get purchase assurance, which protects your purchase from loss, theft or damage within 90 days and an extended warranty that doubles your manufacturer’s warranty up to an additional year.

If you meet the $60,000 annual income requirement you’ll automatically be considered for the Tangerine World Mastercard, which comes with additional perks such as mobile device and rental car insurance.

Welcome bonus: New cardholders can take advantage of a low rate of 1.95% on balance transfers for six months (subject to a fee of 1% of the value of your balance transfer)

Earn rate: 2% cash back on up to three categories; 0.5% on all other categories

Income requirement: $12,000

Best no fee cash back credit card:

Rogers World Elite Mastercard

The Rogers World Elite Mastercard often doesn’t get as much love as it deserves. With this card, you earn 1.75% cash back on all of your purchases. Best of all, you’ll redeem that cash back towards most of your purchases completed with the help of your card within the last 90 days.

The 4% cash back on purchases made in a foreign currency effectively means you earn 1.5% in cash back on purchases once you factor in the 2.5% foreign exchange fee. In other words, this is a great card for travellers.

Getting 2% cash back on Rogers products and services is good, on top of that, the basic travel insurance is also included, but they aren’t game changers.

Welcome bonus: $25 in cash back rewards once you make your first card purchase

Earn rate:

  • Purchases made using a foreign currency – 4% cash back
  • Rogers products and services – 2% cashback
  • All other purchases – 1.75% cashback

Income requirement: $80,000 (personal) or $150,000 (household)

Additional benefits: 

  • Foreign purchases can also give you cash back
  • Free travel insurance

Honourable mention 

TD Cash Back Visa Infinite Card

With an annual fee of $120 (which is waived for the first year for you and one other cardholder) and an earn rate of 3% cash back on gas, grocery and recurring bill payments, the TD Cash Back Visa Infinite Card is a serious contender for the best cash back credit card in Canada title.

The welcome bonus of 6% on all purchases is great, as is the included TD Auto Club membership which is basically a roadside assistance package. TD Auto Club is comparable to CAA and covers you for things such as a dead battery, tire changes, gas delivery, $200 in accident towing, $200 in emergency transportation and more.

When it comes to travel insurance, you only get travel medical coverage and delayed and lost baggage insurance which is not very comprehensive, however the welcome offer and the TD Auto Club membership are excellent perks in their title.

Annual fee: $120 (free for first year)

Welcome bonus: 6% cash back on all purchases for the primary 3 months on the initial $2,000 in purchases

Earn rate:

  • Gas, grocery and recurring bill payments – 3% cash back
  • All other purchases – 1%

Income requirement: $60,000 (personal) or $100,000 (household)

Additional benefits: 

  • Medical Insurance
  • Free membership to the TD Auto Club membership

How to choose the right cash back credit card for yourself? 

When comparing cash back cards, be very careful while calculating what amount of cash back it’ll be providing to your account. Where and how you spend your money is the biggest determining factor. However, other things like where you bank, how often you would like to receive cash back, how you would like to use your cash back, and if you would like other perks from your credit card will make it easier to choose. The items listed below are of utmost importance when it comes to choosing a great cash back credit card:

Promotional Earn Rate

Many cash-back credit cards will offer a brief term promotional earn rate, which will allow you to earn a supercharged amount of money back on some or all of your purchases. This typically lasts for up to 3 months, and can make a big difference in the card’s benefits to you. If you happen to make a gargantuan purchase with your cash back credit card, like booking a dream European vacation or buying a new car, you can reap major cash back rewards.

Earn Rate By Spending Category

Cash back credit cards either offer a flat rate of money back, or they provide tiered rates, with higher returns in some spending categories than others. Knowing your personal budget and spending behavior will tell you where you spend the most money, and therefore can reap the most rewards. A lot of cash back cards come with high earn rates on buying groceries and gas, but a lower earn rate on everything else. Review your own spending patterns to work out if you’ll earn the foremost from a flat-rate cash back card, or can enjoy one that rewards specific categories of purchases.

Cash Back Caps

One of the more frustrating aspects of some cash back credit cards may be a cap on what proportion cash back you’ll earn. Sometimes this cash back is merely for the promotional period at a better earn rate, but sometimes it’s for a selected spending category or overall for that particular cash back credit card. Most cash back caps are quite high, but some are surprisingly low which can really put a dampener on the value of a card. However, there are many cash back credit cards out there that permit you to earn unlimited cash back. Knowing how much you’re planning to charge to your credit card before you apply will tell you if you’ll hit a cash back limit or not, so do the math before you apply.

Redemption Frequency and Flexibility

Virtually all cash back cards will offer you the choice to use your cash back for statement credit. Others will deposit it to a chequing or savings account. Some cash back cards require you to hit a minimum cash back balance of $25 or $50 to redeem, whereas others will automatically disperse any amount you’ve earned. There are cash back cards that pay monthly, and ones that pay annually. The schedule and threshold required to access your cash back that you simply feel comfortable with. is completely personal and depends on your spending habits.

Annual Fee

Paying an annual fee for a cash back credit card seems counter-intuitive, but it can be worth it if the card offers a particularly high cash back rate and other perks. Don’t write off a card with a fee immediately, because the rewards sometimes pay off the fee. Do your calculations and figure out if the quantity you wish to spend on the cash back credit card generates enough cash back to offset the fees.

Processor

A card’s payment processor, whether Visa, Mastercard, or American Express, can tremendously impact its cash back value to you. Let’s assume that you have an American Express card which provides great cash back rates for grocery shopping. However, if your favourite grocery shop doesn’t accept American Express cards, you will not be able to earn a single cent of cash back with the help of your card. Your lucrative cash back rates won’t matter. To truly earn cash back from a credit card, you need to make sure it’s accepted where you shop, so take this into consideration before you apply.

Cash back versus travel credit cards

When it comes to choosing a rewards credit card, many Canadians find themselves torn between two types: cash back and travel. This fact shouldn’t come as a surprise to anyone, both of these cards are extremely popular among the Canadians and they come with a host of features. Here we will break down both card types so that we can assist you with choosing the perfect card for yourself. We are not going to directly compare specific cards (no Scotia Momentum vs Expedia for TD)  but we will compare cash back and travel credit cards in general.

Simplicity

It’s important to completely and thoroughly understand your credit card rewards program, and cash back cards are about as clear as you’ll get. If you earn 2% back, you absolutely know you’re going to receive two cents on every dollar—no complicated math is required here. Travel rewards credit cards also come with varying rates of earning and different redemption values. These variables can affect how or when you want to collect or redeem. 

Bottom line: If you’re invested in earning travel rewards, acquainting yourself with your card’s program may be the best way to go, otherwise you can’t top cash when it comes to simplicity.

Rewards and bonus categories

How you earn can be just as important as what you earn. Travel rewards credit cards usually offer a very wide array of spending categories to earn in, while cash back cards can be more restrictive.

Aside from a couple of exceptions, the bulk of money back credit cards offer a similarly limited selection of bonus categories (namely gas, groceries and utility bills). In comparison, travel credit cards have a far larger selection of bonus categories (like restaurants, hotel stays, flights, Uber rides and public transit, in addition to the groceries and gas), which means you can potentially earn more points on more types of purchases. 

Bottom line: You’re likely going to earn more Points or Miles, in more spending categories, with a travel rewards card than cash with a cash back card. 

Flexibility

The reason they say cash is king is because it can be used for anything you want, such as your everyday spending on gas and groceries. In contrast, the points you earn on travel cards are usually geared towards travel rewards and offer the best value when redeemed for flights and hotel stays.

Bottom line: Cash is the most flexible reward out there, but if you’re looking to save on flights and hotel stays, a travel card can offer considerably more value.

Welcome bonuses

Typically, travel rewards cards can offer hundreds of dollars in rewards as a sign-on bonus, while cash back cards usually offer an increased earning percentage for a short introductory time. One thing to notice is that bonuses on cash back cards are usually easier to earn—while travel rewards cards usually are worth more but have stricter spending requirements. 

For example, with the BMO World Elite Mastercard, you can get 3,000 bonus Points ($240 value) only after you spend $3,000 on the card within your first three months. In contrast, the BMO CashBack World Elite’s welcome offer allows you to earn 5% cash back right out of the gate on all of your purchases for the primary three months but maxes out at just $200. 

Bottom line: The welcome bonuses on cash back cards are typically worth less but are easier to urge than the offers available on travel cards.

Side perks

Perks are little extras available to you as a cardholder. These are usually things like airport lounge access, longer and more comprehensive travel insurance coverage, or refunds on certain expenses like a Nexus entry fee. As you can see, perks are very often tied directly to travel, so it should come as no surprise that you’re more likely to find them on travel rewards cards than on cash back cards.

Bottom line: In more ways than one, cash ends up being the major perk on every cash back card. If you’re looking for little extras, your best bet is a travel rewards card.

Cash Back Credit Cards: FAQs

How can I redeem my cash back?

Depending on your card of choice, you will have the option to choose your cash back as statement credit or rewards. When you select the reward option, you will need to carry out another action (such as buying something with your reward points) in order to redeem the cash back. Most cash back can be redeemed online, some credit issuers provide that service via phone as well. However, it is recommended that you do it online by yourself.

When can I redeem my cash back?

Depending on your card issuer, you can redeem your cash back at certain intervals (monthly/quarterly/yearly). Some issuers also provide the option of automatic redemption once a balance threshold is crossed.

How long does it take for cash back to show up? 

The exact time will vary based on the credit card issuer, but the usual range is between immediate to 14 business days for the cash back to pop up in your account.  Some credit card providers might take even longer.

Is there an annual fee for cash back credit cards?

A lot of cash back credit cards in Canada come with an annual fee. Before applying for your cash back credit card, remember to keep the annual fee under consideration. Do some math to evaluate your monthly spending vs. the annual fees. Don’t just look at lucrative cash back rates and enticing welcome rates before signing up for a cash back credit card. Some cash back credit cards like the Tangerine Money-Back credit card do come with no fees but the earn rates and bonus features are lower than other cards with annual fees. It’s better to do a complete break up and calculation of your expected annual expenses and prospective cash back before you select your cash back credit card.

Best Cash Back Credit Cards in Canada: Conclusion

So these are the best cash back credit cards available in Canada today. Along with enlisting them and describing their quirks and features, we also covered a lot of information about cash back credit cards in detail. Hopefully, this will be helpful to you before you go ahead and sign up for a cash back credit card. Always remember to weigh a cash back credit card’s pros and cons against your needs before signing up.

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