credit cards: cash back comparison

i'm still in that transition between idolizing the frequent flyer miles and the cash back credit cards. at the end of the day, i try to figure out which card would get me the best rate of return possible.

my baseline cashback card is capital one aspire cash card. it provides a 1% return and a 50% bonus yearly. this means an effective return rate of 1.5%. there's no annual fee, there's extended warranty, purchase protection, travel medical, cancellation, interruption, and car rental insurance. it's a very strong insurance package. there's no annual fee. (if you apply for this card, make sure you sign up for the card, make sure you use the link via great canadian rebates for an additional 30$ bonus sign up credit).

something a bit better is the capital one aspire travel world mastercard. while it has a $120 annual fee, you get $100 a year back in points. this makes the effective annual fee of 20$. you get 2% back that can be used against the purchase of travel (provided the travel purchase is $600 a more). it has all of the insurances as the aspire cash card. compared to the capital one aspire cash card, you would then need to spend $4,000 in order to break even with the annual fee. that is to say, after spending $4,000 a year, that extra 0.5% return will mean earning an extra $20, enough to cover the annual fee. (again, using great canadian rebates, you can get an additional sign up bonus).

so all other cards have to beat a 2% return rate (assuming you spend more than $4,000 a year).

the raw data:
1% or less:

• PC financial = 1% return in groceries 
• TD no fee cash back = 1% return
• other TD annual fee credit cards = 1% in travel  
• CIBC no fee cash back = up to 1% in cash
• Scotia no fee momentum = 1% return 
• BMO no fee cash back = 0.5%

1% -1.5% return:

• BMO $79 cash back card = 1.25%
• TD $120 annual fee first class visa = 1.5% in travel 
• CIBC $79 annual fee cash back = 2% only on purchases above $50,000 per year
• Chase financial cards with no forex fees = 1% - 1.5% return 
• National bank -- all cards = 1-1.67 points per dollar, 1 pt = 0.91c, so 0.91 - 1.52%
• 1.67 point/$ card carries an annual fee of $125 and assumes a max spend of $30k/yr

1% regular + 2% or more for special categories:

• RBC no annual fee cash back = 1% regular purchases, 2% groceries
• could make sense to combine the aspire one cash back card with this card to use specifically for groceries 
• MBNA smartcash = 1% regular purchases, 2% gas and groceries capped to $400 a month
• Scotia $39 momentum = 1% regular purchases, 2% groceries

2%+ crowd:

• MBNA world points mastercard = 2% return on all purchases, no annual fee. however, this card is no longer being issued, previous holders are grandfathered.

can we increase the rate of return beyond 2%?
if you're willing to use a high-annual fee card in combination with either the aspire travel card, you can possibly get a better rate of return:

• Scotia infinite momentum: 1% regular, 2% drug and recurring payments, 4% gas and groceries. $99 annual fee.
• if you use this card for only your gas/groceries, and leave all of the other spending on your 2.0% aspire travel card, you'd need to spend $4,900 on those categories in order to break even with the annual fee. any additional spending will increase your overall rate of return.
• Scotia bank gold american express  = 4% for gas/grocery/dining/entertainment, and 1% for all else. rebate can only be used for travel in the future.
• given its $99 annual fee, like the scotia infinite momentum above, one would need to spend roughly $4,900 in these categories to break even with the annual fee. the benefit of this card is that there are additional categories to get bonus spending. however, the downside is that amex is not accepted.

conclusion:
if you're willing to pull out the right card for the right type of merchant, you could end up with a rate of return greater than 1.5% (provided a minimum spend of $4,000 a year on the aspire card and $4,900 on the gold amex).

my current card strategy:

1. gas/dining/grocery/entertainment: scotia bank gold amex for 4% return
2. all other purchases, and non-amex merchants: MBNA world points master card for 2% return
3. all foreign transactions: sears financial mastercard for 1% return and no forex fees
• for foreign gas/dining/grocery/entertainment charges, i will probably use the amex because the 4% return outweighs the 1% sears return + 2.5% forex savings