Ditch your points plan: Cash-back credit cards offer more bang for your buck
BNN Bloomberg
Cash-back credit cards are on the rise.
About a year ago, Matt Brownlow started putting all of his expenses on a Tangerine money-back credit card as a way to get the most out of its cash-back rewards. He then pays the balance off at the end of each month.
The 33-year-old mortgage broker at Mission35 Mortgages in Burlington, Ont., ditched his previous President’s Choice points card in favour of a cash-back card so he could use rewards as “treat money.”
“If there’s something that I’m saving up for, I might set that cash-back money aside. With Tangerine, it’s great because it can go into a separate savings account. Last month, I bought a food processor with that money because I had been eyeing one of those,” he said.
“I’ve also used that money to put into my Questrade account. I just deposit it right when it gets to a certain amount … I can put that into an exchange-traded fund and watch that money grow a heck of a lot faster.”
Among credit card holders, 78 per cent say they most frequently use a card that provides some kind of reward, according to Ratehub.ca’s recently published 2021 Digital Money Trends Report. Cash-back rewards were found to be the most popular (54 per cent), followed by store credit (25 per cent) and travel reward cards (23 per cent).
“Cash-back offerings have never been more attractive in Canada than they are now and there’s also never been more people looking for cash-back credit cards,” said Mikael Castaldo, general manager of everyday banking at Ratehub.ca.
