Best rewards credit card canada no annual fee: Rewards credit cards come in many different forms, making it more challenging to determine how they compare.
But failing to choose one of the best rewards credit cards can mean leaving benefits—and even cold, hard cash—on the table. Here are our picks for the best rewards credit card in canada for 2023.
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What Is a Rewards Credit Card?
when you use the card. Typically, cardholders earn a certain percentage of eligible spending in the form of cash back or a certain number of points with every dollar spent on eligible purchases.
Rewards cards may also offer a welcome bonus that provides additional rewards to new cardholders after spending a certain amount within a certain period of time after the card is approved.
General Rewards Credit Cards: These cards earn you points that you can redeem for a wide range of rewards, such as merchandise, gift cards or travel discounts.
Because they offer a general-purpose rewards program, you won’t get the most attractive deals compared to cards geared toward a specific destination, like travel.
Travel Rewards Credit Cards: These cards enable you to earn points or miles to convert to travel-based rewards.
Depending on the rewards program structure, you can get valuable discounts on airfare, car rentals, accommodations, cruises, and vacation packages.
Some travel credit cards offer loyalty programs tied to a specific airline and hotel brand.
Cash Back Credit Cards: These cards offer the most convenient, transparent and straightforward rewards program: you get cash back on a fixed percentage of your spending every month.
Benefits of a Rewards Credit Card
Before you sign up for a rewards card, it’s wise to familiarize yourself with the advantages and disadvantages you may experience when using one.
A Great Way to Save Money: Let’s say you want to reduce your household expenses.
In that case, a rewards card can help you achieve this goal if you use it regularly and responsibly.
Rewards cards can offer you big savings, especially when it comes to travel-based spending.
Access to Valuable Perks: Many rewards cards offer a variety of perks that can come in handy.
These may include airport lounge access, advanced safety features, roadside assistance, travel insurance, zero foreign transaction fees and an extended purchase warranty.
Opportunity to Earn a Sign-up Bonus: Rewards cards regularly offer attractive sign-up bonuses to entice customers.
You can earn a large amount of points as you go, giving you a good head start on collecting the levels you need to redeem for the rewards of your choice.
Types of Credit Card Reward Programs
Cash-back cards earn a percentage of eligible purchases as cash back, often redeemable as a statement credit or bank account deposit.
Travel rewards cards offer points or miles and are often co-branded with airline or hotel partners to earn with travel loyalty rewards programs. Redemption options for travel rewards cards often include brand-specific redemptions, such as for hotel stays or airline tickets.
Cash-Back Rewards: Depending on the particular cash-back card used, a consumer can get flat-rate or tiered-rate cashback on eligible purchases. Earning plans and structures may include higher earning rates on certain expense categories, such as gas or food, and caps on the amount of rewards earned.
Flexible Travel Rewards: A travel rewards credit card earns points or miles on eligible purchases, which can often be redeemed in partnership with an airline or hotel loyalty rewards program or a card issuer’s rewards program for travel, including airline tickets. Also included. , hotel stays or cruises.
What is a no-fee credit card?
No-fee credit cards have no annual fee: Card issuers charge a one-time fee to help cover card rewards and program costs. Most of the best Canadian credit cards have an annual fee of more than $100.
Now, that doesn’t mean you can’t pay fees while having a no-fee credit card—you still have to deal with interest charges, inactivity fees, and the like. But the annual fee? A no-fee card is a card that carries unnecessary charges a May help reduce re.
The only downside? No-fee cards may not offer the same premium benefits that often come with cards with annual fees. That said, no-fee cards still have some perks, including cash-back rewards programs, travel points, and more.
Choosing the Right Rewards Credit Card
There is a wide assortment of rewards cards to choose from, each tailored to a specific budget and lifestyle.
As a result, it can be overwhelming to sift through what’s available to find the right one for you.
Review your Spending Habits: Your primary goal should be to find the card that best matches your spending habits.
This way, you will be able to maximize the number of points you collect through your daily purchases.
First, list the products and services that make up the bulk of your spending.
These can be things like gas, groceries, restaurants, clothing, electronics, and vacations.
Divide your list into clear categories to determine which ones will score you the most.
Second, ask yourself how you want to spend your points.
Are you primarily interested in getting free household items? Do you prefer to receive cash directly into your bank account from time to time? Or are you interested in getting a great discount on a luxury hotel on your trip abroad?
Analyze the Earn Rate of the Card
A rewards card’s earning rate refers to how many points you earn with each qualifying purchase.
With a flat rate structure, you collect points based on a certain percentage on each qualifying purchase.
For example, you can earn 2% per dollar on a cashback card, which is $2 back for every $100 you spend.
For a general-purpose rewards card, you collect a certain number of points for every dollar you spend.
under a model where you earn 1 point for every cent you spend, if you charge $100 to your card you’ll earn $1 worth of points.
Under the bonus-rate model, your earning rate varies by category of purchase spend based on your card’s rewards program policy.
Flexibility of the Rewards:
The ability to transfer your points is a nice benefit because there are times when your points provide more value when used through alternative rewards programs.
Some card brands allow you to transfer rewards points to hotel and frequent-flyer programs, which leads to better redemption deals.
For example, if you use the CIBC Aventura card, you can transfer your points to the Aeroplan loyalty program.
The best credit card depends on you and your financial needs. Carefully consider your spending habits—do you often spend money on gas, groceries, travel, or at a particular store? Look for a rewards card or set of rewards cards that give you the most return on every dollar you spend, whether it’s cash back on dining purchases or redeemable for travel, Amazon purchases or more points.
Redemption options and value will vary depending on the type of rewards card you hold and the card issuer or co-brand card offering. Cash back can often be redeemed in the form of direct deposit, statement credit or purchases. Points can be redeemed on the card issuer’s website if there is a travel or shopping portal with special offers Airline miles or hotel points can be easily redeemed through your personal account on the airline or hotel website when booking travel.
Many credit cards have no limit on how many points you can earn, but some have quarterly or annual earning limits. Card terms may limit how much spending is eligible for rewards, especially with category bonuses.
Whether your rewards are taxable depends on how you earn the rewards For example, the IRS often views cash-back rewards as deductions, not taxable income. Welcome bonuses and bonus points from referrals (especially lucrative ones) can be viewed as taxable income if the amount exceeds a certain threshold. Talk to a representative of your credit card company and tax advisor for more information about your individual situation.
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