Cashback credit cards not all equal

What’s better than a credit card that gives points for free flights?

How about a credit card that gives cash rebates?

You can book your own flights during seat sales, often a better deal than using the card.

There’s nothing worse than waiting years to collect points for a airline ticket, only to find you still have to pay hefty taxes and surcharges. If you have points piling up, you may be happier with cash rebates paid once a year that you can use to buy anything you like.

There are more cashback credit cards on the Canadian market than ever before. Let’s start with no-fee or low-fee cards.

The CIBC Dividend Card has three tiers of rebates. You get 0.25 per cent on net annual purchases up to $1,500, 0.5 per cent up to $3,000 and 1 per cent over $3,000.

Scotiabank’s Moneyback Visa card has the same three tiers of rebates. It has an $8 annual fee, but gives you an 18.59 per cent interest rate (lower than CIBC’s 19.5 per cent).

The TD Rebate Visa suits low spenders. It has just two tiers: 0.5 per cent on purchases under $3,000 a year and 1 per cent above that (up to $25,000 a year).

RBC’s no-fee Rewards Visa Gold and Rewards Visa Classic cards give you financial rewards. You can pay down an RBC mortgage, loan or line of credit, or contribute to a registered retirement savings plan or education savings plan.

Financial rewards are popular, accounting for 18 per cent of total gift certificate redemptions, says RBC spokeswoman Jackie Braden. People like to pay themselves first and get related tax benefits or grants.

BMO has a no-fee cashback reward option on its Mosaik MasterCard, giving 0.5 per cent on purchases and 1.5 per cent at Shell gas stations. (With the premium cashback option at $49 a year, you get 1 per cent on purchases and 2 per cent at Shell.)

Monty Loree, a blogger who writes about credit at www.canadian-money-advisor.ca, helped me find other cashback cards that looked enticing.

Citizen’s Bank lets you earn points for its financial products. It donates 10 cents to non-profit initiatives worldwide each time you use the card.

At a cost of $45 a year, Citizen’s My Visa Rewards Plus card has a low interest rate of 11.25 per cent.

Capital One’s Cash Back Platinum Plus MasterCard, aimed at big spenders, gives you 1 per cent on purchases up to $10,000, 1.5 per cent up to $20,000 and 2 per cent on $20,000 or more.

It has a $59 annual fee and a variable interest rate of prime plus 15.05 per cent (equal to 19.8 per cent right now).

MBNA’s Premier Rewards Platinum Plus MasterCard gives you a 1 per cent rebate on all purchases with no limits. The annual fee is $29.

Finally, American Express has a Costco cash rebate card with three tiers: 0.25 per cent on the first $2,000, 0.5 per cent on the next $3,000 and 1.5 per cent on any amount over $5,000.

The maximum rebate is $500 a year, which requires $37,000 in spending.

While the Amex card is free, you have to pay for a Costco membership every year ($50). It’s the only credit card accepted by Costco stores. You can juice up your rebate by an extra 0.5 per cent when you carry a balance on the card.

Source: Thestar.com