back in april, i wrote a list of all the credit cards offering cash back. that post is
here for the raw details. but then i found that a few of the cards needed updates, and i thought it would be helpful to point out. the original had many kinds of cash back cards, and really, some of them are not even worth repeating because the rate of return is insulting. so i'll just focus on the stronger cards.
1) capital one cash back card downgraded to 1% cash back
back in april, i noted that this no-annual fee card gave 1% cash back on all purchases and then topped it off with a 50% bonus at the end of the year. this would give an effective rebate of 1.5%. after taking a look at their
website today, it looks like the bonus is gone. this makes the card no different than most other 1% cash back card. that being said, it does have strong insurance offerings, including price protection (up to $100 within 60 days), extended warranty, purchase protection, baggage theft, car rental, and common carrier accident insurance.
2) MBNA rewards world elite mastercard is back!
grandfathered from the old days, i have the mbna rewards world elite mastercard with the annual fee waived yearly. the perk was that it gave 2% cash back
across the board. they don't allow you to sign up for the free version, but they once again
allow you to sign up for the $89 annual fee version. this also comes with price protection, concierge service, purchase protection, extended warranty, rental car, common carrier, personal effects insurance etc. it's a strong card.
is the MBNA rewards world elite (RWE) worth it with the annual fee?
if you're comparing this to any of the other free 1% credit cards out there, then you have to spend the equivalent of $8,900 a year to simply break even with the 1% cards. this is to say that the extra 1% earned on the MBNA RWE after spending $8,900 will pay back the annual fee. any additional spending on the RWE will give you a better rate of return. (i.e., greater than 1%)
is the capital one aspire travel world mastercard a good deal?
compared to the MBNA RWE, the
capital one aspire travel world mastercard it is a great deal. for each dollar spent, you receive up to 2% cash back (provided that the travel that you want to spend your points on is greater than $600). the annual fee is $120, but it is offset by the $100 yearly credit, making the effective annual fee $20. its insurance package is just as strong, if not stronger, than the MBNA RWE. it includes travel medical, trip cancellation and trip interruption insurance.
if you have the capital one aspire travel world mastercard, compared to the no-fee 1% cards, you would need to spend $2,000 a year in order to break even on the annual fee. everything after that will net you a higher rate of return. (i.e., greater than 1%)
where does the pivot visa come into play?
if you're able to use the
scotiabank amex gold card with its $99 annual fee, you can get a 4% return on pivot reloadable visa purchases. by buying the pivot visa's $69.95 annual fee version, you can get at least a 3.2% return on all purchases (except for gas/grocery/dining/entertainment, which would use your scotia bank amex gold card for its 4% return). i wrote about this strategy extensively
here.
if you were to do the scotiabank amex gold card and the pivot visa's $69.95 annual fee, you will pay a total of $168.95. assuming that you don't get
any additional gas/grocery/dining/entertainment expenses on your scotiabank amex gold card, which is unlikely, your minimum rate of return is 3.2%. because
you will spend money on gas/grocery/dining/entertainment, your rate of return will likely be higher than just 3.2%.
- compared to the regular 1% cash back cards (like the PC financial cards that everyone is carrying these days), you would only need to spend $7,679 a year to break even on the annual fees. everything after that would get you a higher rate of return. (i.e., greater than 1%)
- compared to just the capital one aspire travel mastercard, you would pay an extra $148.95 in annual fees. therefore, you would need to spend $12,412.50 in order to break even. anything after than would net you a higher rate of return. (i.e., greater than 2%)
what if you don't want the pivot visa? would you just add the scotia bank amex gold card?
the pivot visa is a nuisance sometimes because some petro-canada stations don't like to sell these cards. so what about other comparisons can you make?
- if you have the world aspire mastercard, you would do even better with the addition of the scotia bank gold american express card strictly for gas, grocery, dining, and entertainment expenses. you would need to spend $4,950 in those special categories a year in order to break even with the $99 annual fee. any additional spending above $4,950 in those categories will net you an overall higher rate of return. (i.e., greater than 2%)
- if carrying two rewards cards with fees are too much, then you can just keep the 1% no fee cash back cards. in this case, in order to break even with the amex's $99 annual fee, one would need to spend just $3,300 a year. again, anything above this amount in those certain categories will net you a higher rate of return. (i.e., greater than 1%)
before applying for the scotia bank amex gold card, i would flip through your last 12 credit card statements to make sure that all gas/grocery/dining/entertainment expenses add up to the "break even" number (e.g., $4,950). note that walmart supercenter and costco, even though they sell groceries, do not count. 7-11 does, for whatever reason. also note that you can increase your rate of return by buying gift cards from safeway, petro-canada, 7-11 etc.
(note: i do not earn any form of affiliate rewards for any of these cards.)
