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A Possible Industry Shift from Miles and Points to Cash Back

The credit card cash back market is actually starting to heat up in Canada. Could we be seeing a shift in the industry from miles and points to cash back?

In the past two or so years, we saw the discontinuation of several co-branded miles and points credit cards, namely: Choice Privileges, Delta SkyMiles, IHG Rewards, not to mention Best Buy, Holt Renfrew and More Rewards.

Conversely, we saw the introduction of two types of cash back credit cards, pure cash back and co-branded cash back:

Pure Cash Back

SimplyCash Card from American Express

  • Earn 5% cash back on all eligible purchases at gas stations, grocery stores and restaurants in Canada (up to $250 cash back) for the
    first 6 months of Card membership
  • Earn 1.25% cash back on all other purchases and when your Welcome Rate ends

SimplyCash Preferred Card from American Express

  • $79 annual fee
  • Earn 5% cash back on purchases for the first 6 months of Cardmembership (up to $400 cash back)
  • Earn 1.5% cash back when your Welcome Rate ends (up to $100,000 annually) and 1.25% after

CIBC Dividend Visa Infinite Card

  • $99 annual fee
  • Earn 4% cash back on gas and grocery purchases
  • Earn 2% cash back on Tim Hortons and TELUS purchases
  • Earn 1% cash back on all other purchases

Tangerine Money-Back Credit Card

  • No annual fee
  • Earn 2% cash back on a select group of categories (choice of 2 categories, a 3 choice if you deposit the cash back into your Tangerine Savings Account)
  • Earn 1% cash back on all other purchases
  • 1.5% foreign conversion fee

However, I would note that this credit card is not yet available to the general public yet.

Co-Branded Cash Back

Rogers Bank Platinum MasterCard

  • $29 annual fee (waived the first year or waived so long as you have pre-authorized Rogers payments set up)
  • Earn $35 cash back sign up bonus
  • Earn 1.75% cash back on all purchases

Scotiabank GM Visa Infinite Card

  • No annual fee
  • Earn 5% cash back in GM Earnings on the first $10,000 spent annually on all purchases
  • Earn 2% cash back in GM Earnings on purchases after the first $5,000

Capital One Platinum MasterCard

  • No annual fee
  • Exclusive to Costco members
  • Earn 3% cash back on restaurant purchases
  • Earn 2% cash back on gas purchases
  • Earn 0.5% cash back on the first $3,000 on all other purchases (1% thereafter)

Conclusion

As you can see, there is a slight shift in the industry, as several miles and points credit cards are being discontinued. Instead, the industry is introducing several new cash back credit cards.

Personally, I would still prefer miles and points, so long as the sign up bonuses remain competitive. And as long as the sign up bonus trend continues, I will continue to give my business to credit cards that earn miles and points. But once those credit cards take a hit, then I may be looking more towards cash back credit cards instead for every day spending.

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Pointshogger aims to provide analysis and updates on earning loyalty reward points and maximizing the value of your points. We hope to inspire our readers to experience the joy of travel and make the most out of what they've already got!

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