When choosing a credit card, are you looking for travel rewards, a low interest rate or maybe a good starter card for a student’s lifestyle?
Every year we go the extra mile to figure out exactly which products offer the best value. In picking the winners of the 2016 Best of Finance Awards, we spent hours upon hours breaking down miles, points and cash back. We examined interest rates, promotional balance transfer rates and annual fees. And we compared these figures using the everyday expenditures of the average Canadian over a two-year period to come up with a list of the best cards currently on the market.
To determine and compare the true value proposition of each card, we have converted all rewards -- from points and miles to interest promotions -- to cash earned over a 24-month period, based on the average Canadian household expenditure according to Statistics Canada.
The one exception is the Best Low Balance Transfer category, which is measured over a 12-month period. Here are the best Canadian credit cards of 2016*:
Best Grocery Rewards Credit Card
WINNER: President’s Choice Financial® World Elite Mastercard®
2nd Place: Capital One® Platinum Mastercard® (for Costco members)
3rd Place: President’s Choice Financial® Mastercard®
Best Specialty Rewards Credit Card
WINNER: Scotiabank GM VISA Card
2nd Place: President’s Choice Financial® World Elite Mastercard®
3rd Place: MBNA Rewards World Elite® Mastercard®
Best Travel Rewards Credit Card with No Fee
WINNER: Blue Sky™ Credit Card from American Express
2nd Place: Capital One® Aspire Travel™ Platinum Mastercard®
3rd Place: Shell® AIR MILES® Mastercard® from BMO
Best Travel Rewards Credit Card with Fee
WINNER: TD® Aeroplan® Visa Infinite
2nd Place: American Express® AeroplanPlus® Platinum Card
3rd Place: CIBC Aventura® Visa Infinite
Best Travel Rewards Credit Card - Specialty
WINNER: Alaska Airlines World Elite® Mastercard®
2nd Place: The Starwood Preferred Guest® Credit Card from American Express (This card is no longer available. See Marriott Bonvoy.)
3rd Place: WestJet RBC® World Elite Mastercard
Best Cash Back Credit Card with No Fee
WINNER: Tangerine Money-Back Credit Card
2nd Place: SimplyCash™ Card from American Express
3rd Place: RBC® Cash Back Mastercard
Best Cash Back Credit Card with Fee
WINNER: Scotia Momentum® Visa Infinite
2nd Place: MBNA Rewards World Elite® Mastercard®
3rd Place: BMO® CashBack® World Elite® Mastercard®
Best Gas Rewards Credit Card
WINNER: Scotia Momentum® Visa Infinite
2nd Place: Shell® CashBack® World Mastercard® from BMO
3rd Place: MBNA Smart Cash Mastercard® credit card
Best Student Credit Card
WINNER: BMO SPC® CashBack® Mastercard® (discontinued)
2nd Place: Scotiabank SCENE® VISA Card
3rd Place: StudentAwards MBNA Rewards Mastercard® credit card
Best Low Interest Credit Card
WINNER: MBNA TrueLine® Mastercard®
2nd Place: National Bank Syncro Mastercard®
Best Low Balance Transfer Credit Card
WINNER: MBNA Platinum Plus® Mastercard®
2nd Place: RBC Rewards Visa Gold
Best Credit Card for Building Credit
WINNER: (TIE) Capital One® Guaranteed Mastercard®; Capital One® Guaranteed Secured Mastercard®
2nd Place: National Bank MC1™ Mastercard®
3rd Place: Home Trust Secured Visa Card
*All data was compiled between August 29 and September 7, 2016.
How did we choose the winners?
Rewards credit cards
To calculate the return earned on each Canadian rewards credit card, we assumed a total monthly spend on the card of $1,149.82*, divided into the following categories:
- The credit card balance was paid in full each month, with no interest charges accrued.
- The consumers always use the card at partner retailers, if applicable (e.g. all gas purchased at Shell locations).
- All points and miles were calculated into a cash value in order to compare cards like for like.
- Spending was calculated over a 24-month period, taking into account all signup bonuses, good standing bonuses, first-purchase bonuses, annual fees and waivers.
- Gas mileage was based on a 2016 Honda Civic.
*Source: Statistics Canada
Low interest credit cards
To calculate the value of low interest credit cards, we assumed the following:
- The cardholder is starting with the average Canadian credit card balance of $2,660, and pays the minimum payment plus $10 monthly over a 24-month period
- The interest paid on the balance over the 24-month period is compared to that of the average credit card with a 19.99% APR.
- Total card value takes into account all signup bonuses, good standing bonuses, first-purchase bonuses, annual fees and waivers.
Low balance transfer credit cards
To calculate the value of low balance transfer credit cards, we assumed the following:
- The cardholder is starting with the average Canadian credit card balance of $2,660, and pays a monthly installment of $221.67 in order to pay the balance within a 12-month period
- The cardholder has transferred the balance from another card to activate the promotion balance transfer interest rate, and has paid a 1% fee of $26.60.
- The interest paid on the balance over the 12-month period is compared to that of the average credit card with a 19.99% APR
- Total card value takes into account all signup bonuses, good standing bonuses, first-purchase bonuses, annual fees and waivers.
We have also compiled a list of the best banking products in Canada. Click here to view the winners of these categories.
Do you have a winner in your wallet? If not, why not check out the best credit cards today!
