cash-back credit cards

[Thorin]

I'm quite good at tracking my money and so am able to pay off my credit card bill every month, so we buy almost everything we need on our credit card.  This is good because the last few years we've had the Costco CapitalOne cash-back card, there's no annual fee and it pays back 3% for restaurant purchases, 2% for gasoline purchases, and 1% for all others (although only 0.5% for the first $3,000 of those others).  The card gives a rebate check once a year that you have to go cash in at Costco, so you need to have a membership for it to work.  Our rebate checks have been over $600 the last couple of years, I can't remember first two years.

I had to renew a card today, and one thing led to another and I ended up looking at a site that lists the best cards for various categories.  I found the ScotiaBank Momentum Visa Infinite, not a card I'd normally look at because there's an annual fee and I used to think that was a waste of my money since there were cards with no annual fees.  But it pays pack 4% on groceries and gasoline purchases, which I spend a huge amount on!  It also pays 2% on recurring bills and drugstore purchases, and then 1% on other purchases.

Hopefully I'll get approved, and then I should see this kind of cash back after a year:

ScotiaBank Momentum Visa Infinite
$664 groceries ($300/wk * 52wks + $1,000 camping = $16,600 * 4%)
$248 gas ($100/wk * 52wks + $1,000 camping = $6,200 * 4%)
$100 other charges ($10,000 - yes, we easily spend $10k on "other")
-$99 fee
-----
$913 subtotal

CapitalOne Costco
$ 86 restaurants ($55/wk = $2,860/yr * 3%)
-----
$ 86 subtotal

$999 total

That's quite the cashback just for stuff I'm buying anyway...  Just gotta remember to use the CapitalOne MC for restaurants and the ScotiaBank VISA for everything else.

[Lazybones]

I ended up looking at a site that lists the best cards for various categories

Mind sharing the site you used?

I have been using a PC Financial Elite MasterCard for a while now. I do the majority of my shopping at Costco and SuperStore and get a decent return from the card every month since Costco switched from Amex to MasterCard. I also purchase enough every month at costco to get a return greater than the cost of the Executive membership.

I happen to purchase gas at Esso (closet station to me) which also gets a point bonus on the PC Elite.

[Thorin]

https://creditcardgenius.ca/best-credit-cards

PC Financial World Elite Mastercard, right?  No annual fee.  You get 45 PC Optimum points per dollar spent at Shoppers, 30 points per dollar at Superstore or Esso or PC Travel, 10 points per dollar everywhere else.  It costs 10,000 points to get $10 at participating stores, so 1 point is worth $0.001, so getting 45 points is 4.5%, 30 points is 3%, 10 points is 1%, although you are limited to using the points as cash at certain stores.

Basically, that's 3% for groceries and gas and travel, 1% for everything else, for no fee.  This is pretty similar to the Scotiabank Momentum VISA Infinite, which is 4% for groceries and gas, 1% for everything else, for $99 a year (+$30 a year if you get your wife a card).  So the difference is basically 1% of your groceries and gas for the year.  You'd have to spend $12,900 a year on groceries and gas to equal the annual fee.  Now personally, my family spends at least $23,000 a year on that, you probably do as well.

[Thorin]

Huh, CowGirl just pointed out that Costco doesn't take VISA in-store in Canada, so we'll have to keep using the Costco Mastercard there.  So I guess I won't be getting as much cashback as I think, since we buy most of our gas at Costco and a lot of our groceries.  At least anything bought online at costco.ca (like tires) can be paid for with VISA.

https://www.greedyrates.ca/blog/costco-credit-cards-canada/

Oh well, the first year of this card has no annual fee so I can see how much we actually use it and cancel if it turns out to not save us money.

[Melbosa]

We use the Costco Capital One for the cash back options and find it works very well for us.  Perhaps not as rewarding as Infinite, but as you pointed out you have little options at Costco, so at least there is the option for a cash back reward using their card.

[Lazybones]

CowGirl just pointed out that Costco doesn't take VISA in-store in Canada,

As I mentioned they previously only took Amex, now they only take MasterCard. This is one of the reasons I like my PC Elite card but the category for Costco doesn't return much.

As for being limited as to where to spend that really doesn't matter if I ALWAYS need to spend money at SuperStore.. Points earn no interest so I convert them to a discount against my SuperStore purchases every trip.

Working out your ACTUAL spend without changes to behavior for the arbitrary categories and vendor bonuses however is tricky with these cards.

[Thorin]

I agree if you're buying at Superstore all the time then the PC Elite Mastercard makes sense. It's definitely a great deal.

I don't buy at Superstore, I'm a Costco/Walmart customer for groceries and house supplies. I thought this annual-fee Scotia Visa Infinite was going to be great, but have now learned that neither Costco nor Walmart are considered grocery stores so they fall into the 1% rate instead of the 4% rate. Well, that's basically the same as what the no-fee Costco Mastercard pays. So it will likely not be worth it.

I should have instead got the Rogers World Elite, no fee, 1.75% flat cashback, no categories (other than foreign transactions at 4%). I did the math, that one would get me about $220 more per year than I do now. Not quite as good as the $400 more I thought I'd get. I don't know if $4.25 a week is worth the headache of remembering which card to use where.

[Lazybones]

I agree if you're buying at Superstore all the time then the PC Elite Mastercard makes sense. It's definitely a great deal.

I don't buy at Superstore, I'm a Costco/Walmart customer for groceries and house supplies. I thought this annual-fee Scotia Visa Infinite was going to be great, but have now learned that neither Costco nor Walmart are considered grocery stores so they fall into the 1% rate instead of the 4% rate. Well, that's basically the same as what the no-fee Costco Mastercard pays. So it will likely not be worth it.

I should have instead got the Rogers World Elite, no fee, 1.75% flat cashback, no categories (other than foreign transactions at 4%). I did the math, that one would get me about $220 more per year than I do now. Not quite as good as the $400 more I thought I'd get. I don't know if $4.25 a week is worth the headache of remembering which card to use where.

Ya I can't be bothered to have more than one main card / point program so this one fits me well currently.

Also interesting is that the new PC Optimum program has the concept of a household. While my wife an I already use the PC Mastercard joint she was also able to merge in her previous optimum card / have an optimum card so she used that as well when she doesn't use the master-card.

[Tom]

Recently Mila was approved for a card, a cash-back card which I think will be helpful in the long term for the cashback-ness. But the initial reason for grabbing it was the initial 1.9% balance transfer rate we get for the first 9 months. It's not going to save a TON of money, but taking $4500 off my larger card at 19.8% and moving it to the new one should help a little. 

[Thorin]

Recently Mila was approved for a card, a cash-back card which I think will be helpful in the long term for the cashback-ness. But the initial reason for grabbing it was the initial 1.9% balance transfer rate we get for the first 9 months. It's not going to save a TON of money, but taking $4500 off my larger card at 19.8% and moving it to the new one should help a little. 

The simple math says the original interest for nine months is $4,500 * 19.8% * (9/12) = $668.25, the low rate interest for nine months is $4,500 * 1.9% * (9/12) = $64.13, so you save $604.12 over nine months.  That's worth it.  Watch out for the balance transfer rate to jump after nine months, sometimes the initial-low-rate offers end up with higher than average rates after the initial rate ends.  Remember to pay the minimum payment on the 1.9% card and then throw anything extra you have at whatever debt has the highest interest rate, I'm assuming that'll be whatever's left on your existing card.

** the math is actually a little more complex because you'll be paying that balance down by the minimum payment each month so the interest will be a little less than what I calculated, but it's close enough.

Which card did she qualify for?  Is there an annual fee?

[Tom]

Recently Mila was approved for a card, a cash-back card which I think will be helpful in the long term for the cashback-ness. But the initial reason for grabbing it was the initial 1.9% balance transfer rate we get for the first 9 months. It's not going to save a TON of money, but taking $4500 off my larger card at 19.8% and moving it to the new one should help a little. 

The simple math says the original interest for nine months is $4,500 * 19.8% * (9/12) = $668.25, the low rate interest for nine months is $4,500 * 1.9% * (9/12) = $64.13, so you save $604.12 over nine months.  That's worth it.  Watch out for the balance transfer rate to jump after nine months, sometimes the initial-low-rate offers end up with higher than average rates after the initial rate ends.  Remember to pay the minimum payment on the 1.9% card and then throw anything extra you have at whatever debt has the highest interest rate, I'm assuming that'll be whatever's left on your existing card.

** the math is actually a little more complex because you'll be paying that balance down by the minimum payment each month so the interest will be a little less than what I calculated, but it's close enough.

Which card did she qualify for?  Is there an annual fee?

Yeah, the rate after the promo is the cash advance rate (22.8% or something dumb) so we'll have to either transfer it back somewhere or pay it off real quick like. She qualified for a BMO Cashback Mastercard @ reg 19.9% and a max limit of $5000. Surprised the heck out of me, but hey w/e. No anual fee afaicr. I can't recall what the actual cash back rules are, looked briefly for the information but it's not close by atm.