The best rewards credit cards in Canada for 2024

Frequently asked questions

Top points credit cards: How much a rewards points is worth 

With consistent rewards programs, the points are worth a fixed amount and this doesn’t change. Here are the values of points with consistent rewards programs.  

Are rewards credit cards worth it in Canada?

Rewards credit cards can be a great choice for Canadians looking to earn points or cash back on everyday purchases. For frequent travellers, a card with travel rewards can significantly reduce out-of-pocket travel costs, while a cash back card can provide a simpler way to get a percentage of spending back as cash. However, many rewards cards come with annual fees and interest rates that need to be factored in.

A card that offers excellent travel rewards might be less appealing to someone who rarely travels. Rewards cards may also have complex terms and restrictions, such as redemption limitations and category caps on rewards. For those who pay their balance in full each month and strategically use their card for frequent purchases, rewards cards are often worthwhile. But for those who tend to carry a balance, the cost of interest can quickly outweigh any rewards earned. In the end, rewards cards offer strong benefits for disciplined card holders who align the card’s rewards with their lifestyle.

Pros and cons of rewards credit cards

Before applying for a credit card with high rewards, consider the following pros and cons:

Pros:

• Earn rewards on everyday purchases: Earn cash back or loyalty points that can be redeemed for travel, merchandise and gift cards. Many cards offer accelerated earning on specific categories, such as groceries, dining or travel, allowing you to pick strategically to maximize the benefits.
• Valuable sign-up bonuses: Many cards offer lucrative rewards for meeting initial spending thresholds. These rewards bonuses can be worth hundreds of dollars.
• Additional perks: Premium cards often include travel insurance, airport lounge access, concierge services and exclusive deals.

Cons:

• Annual fees: Many rewards cards charge annual fees, which can range from modest to significant, reducing the overall value for low spenders.
• Higher interest rates: Rewards cards often have higher annual percentage rates (APRs), making them less ideal for those who carry a balance.
• Complex redemption rules: Travel rewards can come with blackout dates, restrictions or fluctuating point values, making it harder to redeem at full value.
• Temptation to overspend: The lure of earning rewards might encourage spending beyond your means.

How to choose the best rewards card

If you’re shopping around for a new credit card, you may notice most boil down to two types of rewards: points or cash back. It might be tempting to pick the card that gives you the best return, but it’s not always that simple to find the best credit card for the best rewards in Canada. Where you shop, how much you spend each month and the type of rewards you prefer, these should all be part of your decision for the best rewards credit card for you.

The case for cash back rewards

If you prefer simplicity, cash-back cards are the way to go. The best cash back credit cards give you the highest return based on your everyday spending habits. They may even rank as the highest rewards credit cards in Canada. Here’s what to consider:

• Payouts: Depending on the card, cash back is paid out monthly, quarterly or annually and refunded in the form of a statement credit, direct deposit to your bank account or a cheque in the mail.

• Percentage earned: Cash back credit cards offer fixed percentage on rewards based how much you spend on the card. Generally speaking, cash back cards with an annual fee will earn you a higher base percentage, so you need to factor that in if you’re comparing it to a no-fee credit card.

• Multipliers: Some cash back cards offer multipliers, which give you a higher percentage of cash back in popular spending categories such as grocery stores, gas stations, drugstores and automated payments for recurring bills.

The case for points

Instead of earning cash, travel rewards credit cards net points that can be used to claim travel (flights, hotels), gift cards, or merchandise. Rewards cards can be quite lucrative when you know how to earn and redeem points effectively, but there are several features to consider.

• Type of rewards earned: Rewards credit cards are either linked to a specific travel brand (airline or hotel), or give you flexibility to travel on any carrier. If you’re loyal to a specific brand, it makes sense to pick a co-branded card. If you prefer flexibility, then pick a card that gives you the most options.

• Signup bonus: Most rewards cards offer a huge signup bonus to entice Canadians to apply. Assuming you can meet the minimum spend requirement, that bonus could be worth a few hundred dollars.

• Ease of redemption: Rewards are useless if you cannot use them. Look for loyatly programs without blackout dates. Another no-deal: Too many restrictions, so you can’t redeem your points whenever you want.

• Value of your points: Know what your rewards (specifically points or branded dollars) are actually worth. For example, if you earn 1 point for every $1 spent, and it takes 100 points for you to claim $1 in rewards, your points are worth 1%. If you have a co-branded credit card for flights or hotels, you need to determine how many points it takes to get a free flight or hotel room.

• Additional benefits: Aside from rewards, you’ll want to look at the additional perks and benefits. Many rewards card offer the following as standard benefits: comprehensive travel insurance package, auto rental insurance and price protection.

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