Which Credit Card Rewards Are Best For You?

We use credit cards that give us cash back.
I'm not really a fan of credit cards. Don't get me wrong, I love accumulating rewards. There are many credit cards and different types of rewards to choose from, it's hard to stay on top of everything.

From cash back, to points, to travel rewards, there is no shortage of reward options. I've combed through the list of reward cards available in the past to determine the best cards to use for wifey and my situation.

First thing I look for in a credit card is the annual fee. I don't like annual fees. Sure, there are calculations where the rewards earned more than cover the annual fees, but I just don't believe in paying these fees.

Next is the type of reward we get. I'm not a fan of travel rewards. It just doesn't make sense to me to collect points for years just so I can travel to St. John's for free. Also, before, some travel rewards points had an expiry date of 7 years. Yikes! This one company has since changed their policy, but I had already selected other cards.

There's another card out there that rewards you in movie tickets. The assumption is that movies cost at least $10. You earn 1 point for every $1 you spend on the card. When you have 1000 points (or for every $1000 you spend on the card), you can see a free movie. This is approximately a 1% reward card, but instead of cash, they give you movie tickets. The problem with this reward is that some theatres charge $8 or $9 for movie tickets. Using your free ticket here means you lose money. This reward turns out to be less than 1% in these situations. Also, how many movies can you watch in a year? Wifey and I are particular about the movies we watch. We've only been to the theatre a few times this year. Each time we've used a free movie voucher*, so the only costs are driving to the theatre.

Walmart released a Mastercard a couple of years ago. You could get $25 for signing up for the card and registering for e-statements. You earn 1.25% cash back for using the card at Walmart and 1% cash back for use everywhere else. While on its own, a great card, there is a better option.

Currently, our main card for groceries and gas purchases is the MBNA Smart Cash card. We get 2% up to the first $600 and 1% afterwards. Other purchases are given back at 1%. The rewards are calculated as points. Each dollar spent gives you 1 point. Once you get 5,000 points, MBNA will mail us a cheque for $50. Not bad. The way you earn rewards is a bit confusing, though. The first $600 you spent on the card are eligible for the 2% cash back on grocery and gas purchases. After you spend $600, the rest will always be 1%. If you split your purchases between clothing and groceries for the first $600 ($300 each), even if you buy groceries the rest of the month, you will only earn 2% on $300 of your grocery purchases.

Confusing, right?

When we first got this card, the rewards were even better. For the first 6 months of having this card, we were given 5% cash back on groceries and gas purchases! Wow! After the first 6 months, our cash back rewards were dropped to 3%. Still very good. There was no limit on how much qualified for the 3% cash back. It was really great.

It's still not too bad, but that means we need an additional card to put our other purchases.

For this, we use the PC Financial Mastercard. While we only get 1% cash back, the rewards are easy to redeem. For every dollar spent, we get 10 points. When we have 20,000 points, we can redeem it for $20 worth of groceries from where the card is accepted. I know of No Frills, Loblaws, and Superstore. Not sure where else. After the 20,000 point threshold, you can increase in increments of 10,000 to redeem an additional $10. With this card, we've managed to buy all sorts of things for a few dollars or less. It's hilarious picking up huge packs of beef for around $10 each, milk, other goodies and only pay 30 cents at the register. The trick to stretching the rewards on this card is by buying things only when they are on sale and buying them in bulk so we hit the $20 threshold to redeem points.

Sure, there are other cards that offer 1% back like the Walmart card. While we do buy things at Walmart, we only go there when groceries are on sale. Now that we're riding our bikes to buy groceries, we make fewer trips to Walmart than No Frills. As a result, we'll likely spent more money at No Frills so the rewards of the PC Financial Mastercard are more useful to us.

Also, here's a tip you might not know. At most Walmart's, you can buy whatever you want and it'll be counted as groceries with the MBNA Smart Cash card! That's 2% rewards for shopping at Walmart. I know of one Walmart where it doesn't trigger the 2% rewards. For that Walmart, I use the PC Financial card. However, like I mentioned earlier, we don't shop at Walmart as much anymore.

As for which rewards are best for you? I have no idea. Everyone is different. If you travel a lot, maybe a travel rewards card is best for you. If you love movies, maybe the movie rewards card is best. In any case, make sure you read the fine print and check to see what the annual fees are.

*Earned with travel points from an airline. Also earned free movies using the movie theatre points card. You can earn points from the theatre even if you use a free voucher. Madness! If you go with your SO, just make sure you get the tickets separately so you can get the points on both cards. More proof how loonie I am.


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