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The Best Cash Back Credit Cards in Canada

Earn guaranteed cash back when you make everyday purchases with a cash back rewards credit card.

What's your rewards preference?
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Best Cash Back Credit Card in Canada for 2020

As part of our Best of Finance campaign, our team analyzed over 150 credit cards across 13 categories for the best value, to help take the guesswork out of shopping for a new card.

Our pick for Best Cash Back Credit Card in Canada for 2020 goes to the

TD Cash Back Visa Infinite* Card

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Today's best cash back credit card offer

What is a cash back credit card?

A cash back credit card is a rewards credit card that allows you to earn a small percentage (usually around 1-4%) of your purchase back in cash, helping you save money on everyday purchases. Cash back rewards can be based on a flat-rate, bonus, or flexible bonus structure. Each structure has its own benefits.

Most cash back cards allow you redeem your cash reward as either a deposit into your bank account or a statement credit that reduces how much you owe on your credit card statement. Start saving money by finding the best cash back credit card today.

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Cash back credit cards rewards structure

Every cash back card has its own rewards structure, allowing you to earn cash back rewards in different ways. Here are the three different types of cash back rewards structures you’ll see when you start comparing cash back credit cards:

Bonus cash back: Bonus cash back credit cards are the most popular cashback credit cards. A bonus cash back credit card offers you cashback bonuses on purchases that fall under certain categories such as groceries, gas, entertainment, and bill payments. Typically, the cash back rate on purchases in these categories are much higher than the flat rate you might earn on other cards. This specialization makes bonus cash back cards excellent choices for individuals who know they spend predominantly in these everyday categories. If all of your purchases don’t fall in one of the “bonus” categories, don’t despair. Purchases outside these categories will reward you at a lower fixed cash back rate, so you earn no matter what!

Flat-rate cash back: A flat-rate cashback credit card offers you a fixed cash back rate on every purchase. This is a good option for you if most of your purchases don’t tend to be focused around certain categories such as groceries or if you aren’t sure of your monthly purchases.

Flexible bonus cash back: A flexible bonus cash back credit card is customizable. It allows you to choose your cash back bonus category, helping you align your rewards with your spending habits. Your bonus categories can be anything from groceries, hotels, entertainment, to public parking.

Interested in earning cash back rewards? Here’s what you need to know.

What are the benefits of a cash back rewards credit card?

Using a cash back credit card allows you to earn a percentage of your money back when you make your purchases, meaning you don’t have to change any of your spending habits to start earning credit card rewards. Cash back rewards are just as good as cash because the cash back credit is instantly applied to your credit card statement. You have the flexibility of using your cash back rewards for anything you want.

Cash back cards do have their potential cons. Like most rewards credit cards, cash back credit cards may also come with a higher annual fee averaging $100-$120, so make sure that the cash back rewards structure helps you earn the maximum rewards on your day-to-day purchases (and offsets the annual fee). Also, many cash rewards programs have an annual maximum limit, meaning your cash back rewards will be capped at a certain amount.

How does a cash back credit card work?

Cash back credit cards usually work on a percentage formula. For example, if your cash back credit card promises you 3% instant cash back on grocery purchases, and you decide to purchase $500 worth of groceries with your card, you will earn $15 back into your credit account. This means you save 3% from your total amount spent.

If the same card promises you a bonus cash back of 5% on entertainment purchases and you purchase movie tickets for $200, you’ll receive an instant cash back of $10.

How can I redeem my cash back rewards?

When it comes to redeeming your cash back rewards, most credit card providers pay you the cash back in the form of a credit on your monthly statement. If you hold a bank account with the same credit card provider, you can also receive cash back deposits into your chequing account. The frequency of your cash back rewards payments depend on your credit card provider and the card itself. Some credit card providers allow you to redeem your cash back credit at intervals such as monthly, quarterly or annually, while others may set up an automatic redemption whenever you reach a certain balance, or even allow you to redeem whenever you choose.

Your credit card lender may also give you the option of receiving a cheque with your total cashback credit at the end of the calendar year.

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