The holiday season is fast approaching, and soon, shoppers will be making their lists and checking them twice—deciding which family and friends have been naughty or nice. But last-minute shopping is a thing of the past, as the Canada Post recommends getting your orders in fast. It’s best to start planning and preparing too before you gift grandma an IOU.

This year is unlike any other, and the postal service is expecting significant parcel volumes for the December holidays. According to a recent study by Deloitte, COVID-19 has fast-tracked the shift to online shopping, with Canadian consumers expecting to spend 44% of their holiday budgets online.

Not only that, but as Canadians choose to stay at home and keep gatherings small, they will also see a decline in travel, dining, alcohol and entertainment purchases. However, the pandemic is inspiring Canadians to increase their charitable donations by an average of 86%.

Overall, Canadians plan to spend $301 less than last year, with an average budget of $1,405 for the 2020 holidays. Further findings suggest consumers expect to pay for these purchases primarily with credit cards (63%), debit (20%) and cash (10%).

Using a credit card is an excellent choice for your holiday spending, particularly when it comes to online shopping. The right credit card can safeguard your purchases and reward you with points or cash back.

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Choose the right credit card for your holiday shopping

Before you open a million tabs in your browser or loop on your face mask to visit any retailers, you should evaluate your payment preferences and shopping habits. Will you be spending money online or in-store? Who will you be shopping for this year? And what will you be buying?

In the past, you may have been expecting to host a big family get-together with lots of food, drinks and treats. You may have sent a gift for the teacher with your kids or participated in the work white elephant gift exchange. However, the festivities this year may be a bit smaller than last, and your shopping habits may look a little different.

Understanding how you plan to shop this holiday season can help you get the most cash back or rewards for your purchases. Consider which payment option will provide the best value per dollar you spend.

Flat-rate cash back or rewards cards

When it comes to holiday shopping, you’ll likely find yourself making purchases from various stores and buying several different items. For this reason, using a flat-rate rewards credit card may be your best bet this season. Using a credit card that rewards you for shopping no matter the category can simplify your spending and provide you with the best value.

Unlike a typical travel rewards credit card, which may reward you with an accelerated rate for buying gas, groceries, flights or entertainment, flat-rate cash back or rewards credit cards provide cardholders with more flexibility.

Here is a comparison of three leading credit cards using the average Canadian holiday budget of $1,405.

Holiday spending**

Travel credit card:

Scotiabank®* Gold American Express® Card


*Best of Finance Winner: Best Travel Credit Card in Canada for 2020

Grocery rewards card:

President’s Choice Financial® World Elite Mastercard®


*Best of Finance Winner: Best Credit Card for Families in Canada for 2020

Flat-rate rewards card:

SimplyCash™ Preferred Card from American Express

Groceries earn rate: 5 points per $1 ($298 average spend)


Travel earn rate: 3 points per $1 ($104 average spend)


Other earn rate: 1 point per $1 ($1,003 average spend)

Groceries earn rate: 30 points per $1 ($298 average spend)


Travel earn rate: 30 points per $1 ($104 average spend)


Other earn rate: 10 points per $1 ($1,003 average spend)

Earn rate: 2% on all purchases

Holiday value = $22.44

Holiday value = $22.09

Holiday value = $28.10

**The above calculations do not account for annual fees or welcome promotions to give a holiday value. The holiday value represents a cash value rather than a travel value. Compare credit cards using the RATESDOTCA credit card marketplace to see a year-over-year value.

Since holiday spending can vary drastically, using a flat-rate rewards card can help you earn rewards without keeping track of categories. However, if you have a primary and secondary credit card, carefully selecting which payment option to use for each purchase can maximize your earning.

Pro-Tip: Using the credit card that offers the most rewards for groceries or gas to buy those items and then using a flat-rate reward card for purchasing toys, gifts and décor can provide you with the best value overall.

This shopping mindset can help you get the most rewards or cash back all year-round. A flat-rate reward card can help you earn points or cash back when purchasing birthday presents, furniture, and other miscellaneous items—regardless of the season.

Here are three great credit cards that will offer you an excellent flat-reward rate for all your holiday shopping and everyday spending.

SimplyCashTM Preferred Card from American Express

Apply for the SimplyCash™ Preferred Card from American Express and earn 10% cash back for the first four months, up to $4,000 in total purchases. That is equal to $400 cash back in your pocket.

Regular features and benefits of this card include:

  • Annual fee: $99
  • Annual fee for additional cards: $0
  • Earn 2% cash back on everything you buy

Enjoy all that American Express Invites® offers, including exclusive access, advanced ticket sales, experiences, and deals. This card also features travel and shopping coverage, which is perfect for the holiday season.

Offer expiry date: N/A subject to change without notice

SimplyCashTM Card from American Express

If you are looking for a similar no-fee option, sign up for the SimplyCash™ Card from American Express to earn 2.5% cash back for the first three months, up to $6,000 in total purchases. That is equal to $150 in rewards.

Regular features and benefits of this card include:

  • Annual fee: $0
  • Annual fee for additional cards: $0
  • Earn 1.25% cash back on everything you buy

Access American Express Invites® for advanced ticket sales, experiences, and special offers and enjoy shopping coverage with this card.

Offer expiry date: N/A subject to change without notice

MBNA Rewards World Elite® Mastercard®

New cardholders of the MBNA Rewards World Elite® Mastercard® can earn up to 30,000 MBNA Rewards Points. Get 20,000 points when you spend at least $2,000 within the first 90 days of opening the account and get another 10,000 points when you enroll in online banking and sign up for paperless statements.

Regular features and benefits of this card include:

  • Annual fee: $120
  • Annual fee for supplementary cards: $0
  • Earn two points per dollar you spend on eligible purchases

Enjoy shopping coverage, including purchase assurance, extended warranty benefits and price protection. Price protection is a unique perk that can save you money after you shop. If you make a qualifying purchase in Canada and the price drops within 60 days, you can get a refund for the difference of up to $500 per item, up to $1,000 in claims per year.

Offer expiry date: N/A subject to change without notice

Tips for holiday shopping

Take a look at your credit card details. Many credit cards offer shopping coverages like extended warranty and purchase protection for a little extra peace of mind. If your delivery is lost or damaged, you may be able to get a refund or replacement.

Lastly, if you already have a travel rewards credit card, you may find that the loyalty program offers some unique benefits to earn points faster or help spread the holiday cheer.

Some features may include:

  • Partnered brands: Aeroplan, for example, allows members to earn more rewards when shopping through the e-Store. It doesn’t cost anything extra; however, it can be more rewarding.
  • Pay with points: Programs like AIR MILES, BMO Rewards or Scotia Rewards offer ways for cardholders to pay with points, which can help reduce your holiday spending.
  • Make donations: Many rewards programs allow members to donate points to good causes.

Remember to start your shopping early this year and to stick to your holiday budget.

Have a safe and happy holiday season!

Rates, product information, and rewards estimates are subject to change at any time and do not constitute financial advice. Information in this article is accurate as of the date of this posting, November 18, 2020.

Hayley Vesh

Hayley Vesh is a creative, resourceful, and knowledgeable content producer who is passionate about financial literacy, storytelling, and generating ideas. She writes about credit cards, savings, debt management, and personal finance. In her spare time, Hayley can be found wandering in the woods, hunting for second-hand treasures, or curled up with a steeped tea and a good podcast.

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