Get money-saving tips in your inbox.

Stay on top of personal finance tips from our money experts!

News & Resources

What Are Retail Rewards Credit Cards Worth?

April 8, 2013
4 mins
A male barista hands the point of sale terminal to a customer tapping their smartphone

About a decade ago, my wife and I spent three months backpacking through Southeast Asia. It was a fantastic experience but, I have to admit, one of the highlights was actually travelling there in the pampered luxury of Singapore Airlines’ business class seats. My wife travelled for work a lot at the time and had racked up enough air miles to cover the cost of the two tickets (about 10 grand each!!!). But when you’re spending the money yourself to earn points, how rewarding are all those loyalty cards in your wallet?

Here, we look at the value of common point-earning methods such as Aeroplan, along with retail rewards credit cards, and how you can accelerate your reward returns.

Aeroplan Earnings

The Aeroplan program – launched by Air Canada but now owned by a multinational loyalty management company – is probably the largest rewards plan in the country with, at last count, nearly five million members. While a couple hundred thousand of those are considered “status” members, who earn boarding, seating, and lounge privileges for actual airline travel, the majority of cardholders accumulate most of their points by making purchases with Aeroplan-linked credit cards.

For example, the American Express Aeroplan Gold Card will earn one mile on every dollar spent, and will gift 20,000 bonus points to new sign ups with the first use of the card - a qualifying Toronto to Montreal flight would be worth about $250 to $300. Not bad for just signing up.

Retail Cards Reward Your Spending Loyalty

There are several credit cards provided by specific retailers that help shoppers earn points on their purchases. By rewarding their brand loyalty, these cards provide consumers with a strong incentive to return - and shoppers feel they're earning value from their shopping choices.

A popular choice is the President’s Choice Financial MasterCard, which earns 10 points for every dollar spent on the card to go toward free groceries. They also have a debit card offering that earns five points on the dollar. Once you reach 20,000 PC Points, you can cash those in for $20 in groceries. Doing the math, you need to spend $2,000 (not including any points bonuses) to save $20. Admittedly, not great, but better than nothing.

Shoppers Drug Mart’s Optimum plan is similar, offering 10 points per dollar spent. The lowest incentive rate is a $10 discount with 8,000 points. That works out to just over a penny saved per dollar spent.

It’s A Gas

Gas companies also have their own programs, such as Petro Canada’s Petro Points and Esso’s Extra plans. Both can be used towards free gas, or products ranging from snacks to iPods.

Petro Canada offers five points for every $1 spent on regular fuel; 20 per dollar spent in convenience store items. At those rates, you’d have to spend about $200 on gas to earn a free bottle of water. Spend $12,000 and you can trade in your points for a CAA membership ($70 value).

Esso Extra points start at one point per dollar spent (jumping up to three per dollar spent on premium fuel). You can cash in 1,800 points for a $10 gas card (that’s about a half-cent discount per dollar spent on regular-grade gas), or hold on to them and build up 12,800 points to net yourself a Hockey Canada jersey.

Pro Tip: Looking for a credit card with high return on gas purchases? We've got a great offer right now on the MBNA Smart Cash Master Card - you'll earn five per cent cash back for the first six months on your gas and grocery purchases AND you'll score a free $100 gift card!

Bring On The Bonuses

One way to accelerate your earnings is to take advantage of the many bonuses and other incentives these plans offer. You can earn as many as 50,000 Aeroplan points for signing up for an affiliated credit card. The program also has partnerships with a variety of businesses (including Delta Hotels and Hertz car rentals) where purchases qualify for additional points on top of the base dollar value. At Home Hardware stores, for example, shoppers earn one mile for every two dollars spent.

At Esso, consumers have the choice of joining Extra, or swiping their Aeroplan card instead. The company recently improved the amount of Aeroplan points earned, maxing out at one mile per dollar spent on premium gasoline. (Previously it had been one mile for every three dollars spent.)

PC Financial often mails out coupons for bonus PC Points if, for example, consumers spend $100 or more at a Loblaw-affiliated store, and Shoppers Drug Mart does the same, with an ongoing incentive offering 16,000 bonus points for purchases over $100.

Do you regularly use a rewards credit card to earn on your everyday purchases? What retailer card is your top pick?

Allan Britnell

Toronto-based freelancer Allan Britnell is an award-winning writer with nearly 20 years’ experience. He covers a diverse range of topics, including DIY and professional home renovation projects, nature and the environment, small business, personal finance, and family and health issues. He is also the managing editor of Renovation Contractor, the publication written for small- and medium-sized contracting and custom home building companies. He lives in Toronto with his wife, two daughters, and their dog, Oscar.

Latest life insurance articles

10 Life insurance myths debunked
Life insurance is for someone older or has kids, right? Wrong. Let’s debunk life insurance myths and learn why everyone needs some form of coverage.
6 mins read
Do you need life insurance? A primer for Canadians
Life insurance isn’t a one-size-fits all solution. But if you have dependents, it can be an important financial safety net for those you love.
7 mins read
Why life insurance should be part of estate planning for new parents
Life insurance is one of the best ways new parents can protect their family and help loved ones in the event of your unexpected death.
5 mins read

Subscribe to our newsletter

Stay on top of our latest offers, relevant news and tips!

Thanks for joining!

You'll be hearing from us shortly - stay tuned.