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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.
| First year value* | Credit score required | Winner | ||
|---|---|---|---|---|
| $790 | Good | AMEX SimplyCash® Preferred Card | ||
| $409 | Fair | Tangerine World Mastercard |
*The RATESDOTCA Best of Finance methodology assumes the cardholder spends an average of $2,000 a month on their card to determine the first-year value. The calculation includes all welcome bonuses and promotional offers at the time of publishing.
It’s all right there in the name. Cash back credit cards allow cardholders to earn a small percentage of each purchase back in rewards. We compared the top cash back credit cards using our Best of Finance methodology and ranked the cards that provided the highest first-year value.
To determine our winners, our team has analyzed 80 credit cards using more than 100 data points over several weeks.
| First year value* | Credit score required | Top features | ||
|---|---|---|---|---|
| $940 | Good | Valuable welcome offer. Earn 4% cash back on Gas and Grocery purchases. Includes complimentary travel insurance | ||
|
Runner up |
$745 | Excellent | Great cash back rates and welcome bonus. Includes great travel perks such as travel insurance and airport lounge access. | |
|
Runner up |
$717 | Excellent | Earn 4% cash back on grocery purchases and recurring bills. Includes complimentary travel and mobile device insurance. |
The beauty of the SimplyCash® Preferred Card from American Express is that its value proposition is just that — simple. You get 4% cash back on gas and grocery purchases and earn 2% cash back on all other purchases.
It also includes a decent travel insurance package and AMEX entertainment perks, including early access to covetable concerts and musicals.
Quite simply, we think this is a great card.
Credit score requirement for approval:
A good score is required. You’ve had a credit card for six or more years. You’ve had good credit for the last seven years (no bankruptcies or defaults on credit due to failing to pay debts back to creditors). You haven’t opened a new credit card account, loan, or line of credit in the last nine months. You’ve made the minimum payments for existing credit cards for the past three months.
Annual fee:
$119.88 ($9.99/month)
Annual fee for additional cardholders: $0
Limited time offer/bonus:
Earn a bonus 10% cash back on all purchases for your first 3 months (up to $2,000 in purchases). Plus, earn a $50 statement credit when you make a purchase in month 13. This could add up to $250 in bonus value in your first 13 months.
Offer expiry date: N/A subject to change
Rewards:
Earning potential:
How does this card stack up to other rewards credit cards? We crunched the numbers using our Best of Finance methodology to see how much an average Canadian could earn over 12 months.
Rewards earned over 12 months = $910
Annual fee = $120
Total earned over the first year (rewards minus annual fee) = $790
Insurance:
Other perks:
The BMO CashBack World Elite* Mastercard* allows you to earn 5% cash back on groceries, 4% on transit, and 3% on gas. The cash-back rewards and welcome bonus can help you secure $745 in the first year of card ownership, according to our Best of Finance methodology.
Additional benefits include complimentary roadside assistance, discounts at select car rental companies, and travel and medical insurance.
Annual fee
$120
Limited time offer/bonus
Offer expiry date: Ongoing offer.
Rewards
With this card, you can earn the following:
Apply for the Scotia Momentum® Visa Infinite* Card to earn 4% back on groceries, recurring bill payments and subscription purchases. Collect 2% back on gas and daily transit, including buses, taxis and rideshare services. Earn 1% back on everything else.
According to our Best of Finance methodology, you could have an extra $717 in your wallet within 12 months.
Annual fee:
$120
Annual fee for additional cardholders: $50
Limited time offer/bonus:
Offer expiry date: June 30, 2025
Rewards:
Just because a card doesn’t charge an annual fee doesn’t mean it skimps on rewards. Many no-fee credit cards offer hundreds of dollars in cash back for making everyday purchases and feature additional benefits like shopping coverage or exclusive offers.
We compared the top no-fee cash back credit cards using our Best of Finance methodology and ranked the cards that provided the highest first-year value.
| First year value* | Credit score required | Top features | ||
|---|---|---|---|---|
| $409 | Fair | Earn 2% back in up to three categories of your choice. | ||
|
Runner up |
$383 | Good | Earn 3% cash back on your first $500 spent on groceries. | |
| $468 | Good | Earn 2% cash back on gas and grocery purchases. |
The Tangerine World Mastercard® offers cardholders the unique ability to set their own accelerated earning categories to maximize rewards. Cardholders can earn 2% cash back in up to three Money-Back Categories of their choice, with options including groceries, gas, furniture, home improvements and even parking. Cardholders can choose the spending categories that reward them the most and tailor them to keep up with ever-changing circumstances.
This card also features mobile device insurance and basic travel perks.
According to our Best of Finance methodology, the average Canadian would earn around $409 cash back in the first year.
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Annual fee
$0
Rewards
Earn 2% cash back in up to three categories of your choice. Start with two Money-Back Rewards Categories and earn a third when depositing your rewards into a Tangerine Savings Account. Get 0.5% unlimited cash back on everything else. You can also earn an extra 10% back* (up to $100) when you spend up to $1,000 in everyday purchases within your first 2 months.* (Apply by January 31, 2025).
Tangerine Money-Back Categories:
Change up your categories to match your spending style and maximize your rewards.
Earning potential
How does this card stack up to other rewards credit cards? We crunched the numbers using our Best of Finance methodology to see how much an average Canadian could earn over a 12-month period.
Rewards earned over a 12-month period = $309*
Welcome Bonus = $100
Annual fee = $0
Total earned over the first year (rewards and offers minus annual fee) = $409
*Assumes the cardholder deposits their rewards into a Tangerine Savings Account, earning the third category. The categories selected were groceries, recurring bill payments, and gas.
Ways you can redeem your points:
Insurance
Benefits
The BMO CashBack Mastercard®* offers members 5% cash back for the first three months*. After that, earn 3% back on grocery purchases, 1% back on recurring bill payments, and 0.5% back on everything else you buy. Earn even faster by adding additional cardholders for free.
According to our Best of Finance methodology, the average Canadian will have $383 within the first year.
Annual fee
$0
Limited time offer/bonus
Sign-up bonus expiry date: N/A - subject to change without notice
Rewards
Cardholders of the SimplyCash® Card from American Express earn 1.25% on all purchases, with no limit on how much cash back you can earn. As with all Amex cards, you get solid insurance and entertainment perks.
According to our Best of Finance methodology, the average Canadian would earn around $468 cash back in the first year and $368 a year thereafter.
Annual fee
$0
Annual fee for additional cardholders: $0
Limited time offer/bonus
Offer expiry date: N/A - subject to change without notice
Rewards
Different cash back credit cards offer different perks. But generally, you can compare cash back credit cards in Canada that either have fees or don't.
The most important difference between the two is that cash back credit cards without an annual fee offer less cash back rewards than those with fees.
An example of this can be seen in some major bank credit card offerings. The Scotiabank Momentum Visa Infinite Card, for example, offers an introductory offer of up to $200, an annual fee of $120 (which is waived the first year), and a reward rate between 1% and 10%.
However, the HSBC Cash Rewards Card, without a fee, offers a lower reward rate – between 0.5% and 1.5% – and an introductory bonus of $100.
The choice is yours, but make sure you understand the nuances of rewards before deciding on which card is best for your spending needs.
Every cash back card has its own rewards structure. Here are the three different types of cash back rewards you’ll see when comparing cash back credit cards:
Got more questions about cash back credit cards? We got you covered.
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.
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.
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.
It’s difficult to say which is better. If you are someone on a tight budget or a fixed income, you might appreciate the card that offers no fees but still allows you to earn some rewards on your purchases.
If, however, you are not as financially constrained and you frequent certain stores or categories of shopping, you might want to consider the cards with fees that offer greater rewards. It’s really a personal decision that can be helped by comparing cards and rewards options on sites like RATESDOTCA.
RATESDOTCA may receive compensation when you click on links to those products or services. however, our content and calculations are objective and free from bias. The opinions expressed are purely those of RATESDOTCA; thus, partners are not responsible for any editorials or reviews that may appear. For current term and conditions on any advertiser or partner’s product, please visit their website.
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