If you apply before
October 31, 2014, your first year annual fee will be waived on the Scotia Momentum Visa Infinite Card. The highlights of the card are as follows:
- $99 annual fee (waived if you apply before October 31, 2014)
- $30 fee for each supplementary cardholder
- Earn 4% cash back on gas and grocery purchases (on your first $25,000 of annual spending on these categories)
- Earn 2% cash back on drug store purchases and recurring bill payments (on your first $25,000 of annual spending on these categories)
- Earn 1% cash back on all purchases made above the $25,000 threshold on the categories listed above
- Earn 1% cash back on all other purchases
The cash back that your earn will be credited to your account once a year on your November statement.
Though waiving the first year annual fee may seem very attractive, I am going to analyse whether it is worth it to retain the credit card beyond the first year.
The $25,000 spending limit to get a higher cash back bonus on certain categories caps the return that you get:
- $25,000 x 4% = $1000
- $25,000 x 2% = $500
That means you can only earn a maximum of $1,500 ($1,000 + $500) for these categories. Thereafter, you will only be earning a 1% return, which is in line with all the other credit cards. Thus giving you $1,401 ($1,500 – $99) net cash back.
Let us say you had a different credit card that only earns you 1% cash back with no annual fee.
That means, the same $50,000 that you would have spent on the categories as above you would only net $500 ($50,000 x 1%) worth of cash back. So clearly the Scotia Momentum Infinite Visa Card is clearly ahead.
For annual fee cash back credit cards, when you do your calculations, you will want to do create a budget to see how much you generally spend on each category and compare is to how much cash back you would have received on a no annual fee credit card to determine whether the annual fee is worth it.
Right now, I believe that this is the top annual fee cash back credit card in Canada by far. For big spenders of the above categories, there isn’t much comparative competition out there.