A cash back credit card is one of the simplest credit card rewards systems. It is a credit card that allows you to earn a small percentage of cash on the purchases you make on your card. Instead of a card that provides points that you can later redeem for cash, merchandise, or any other product or service that is available for redemption, a cash back card simply rewards you with cash. 

Unlike points, cash has no restrictions and can be used for any kind of purpose such as spending, saving, even or investing. Moreover, it is easy to see the value in cash back credit cards due to the simplicity of the cash back reward system. To understand the value you get from your cash back card, you simply have to look at the cash back percentage rate. With points, things are more complicated as travel, merchandise, airlines providers, etc. all affect the value of your points. For example, 100 points may equal $1 dollar in travel expenses, but the same 100 points may equal .5 cents in merchandise expenses. 

Which Cash Back Credit Card Should I Choose? 

There are many different cash back credit cards on the market, each of which comes with its own perks, earn rates, and bonuses. To see which card is the best match for you, you should consider the following factors in relation to your needs and spending habits. 

• Annual Fee – It may seem counterproductive to pay money to get money, but it can prove valuable if it has a high cash back rate and beneficial perks like travel and purchase insurance. To help you justify the cost of the credit card, it’s best to check how much you’d have to spend to earn enough cash back to cover your annual fee. For example, with a cash back of 2%, you’d have to spend $5,000 in a year to cover an annual fee of $100. 
• Welcome Offer – The credit card market is highly saturated and as a result, many credit card providers offer very generous welcome bonuses that can really tip the scales in your favour.
• Point Categories – While the cash back earn rate is important, the category of the cash back earn rate is even more significant. For example, a credit card may have a 4% earn rate for all hotel bookings you make but only 1% for groceries. This may be a great offer for someone who travels a lot, but it’s not a very lucrative offer for someone who does not. 
• Perks – More often than not, additional benefits like travel insurance, purchase insurance, discounts and more are included with the credit card. Depending on your needs, some may be more worthwhile than others.

Best Cash Back Credit Cards

• TD Cashback Visa Infinite
• Scotia Momentum Visa Infinite
• Tangerine Money-Back Credit Card

TD Cashback Visa Infinite

Annual Fee	$120
APR	20.99%
Cash Advance Rate	22.99%
Welcome Bonus	10% cash back

With an annual fee of $120 and a welcome bonus valued at $200, this credit card pays for itself.  During the first 3 months after signing up, you can get a return of 10% in cash on any expense, with a cap of $2,000. This is equivalent to a $200 cash bonus when you spend $2,000 in 3 months. In addition, with this card, you can earn 1% or 3% in cash for every dollar you spend. You can earn 3% on eligible groceries and gas expenses as well as recurring bills. All other purchases will earn you 1%. 

Extra Features 

• Insurance coverage – Provides classic travel protection such as medical insurance, car rental insurance, baggage insurance and emergency travel assistance
• Annual fee – Your annual fee will be waived for the first year you sign-up.
• Roadside assistance– Gain free membership and access to roadside assistance through TD’s Deluxe Auto Club.

Eligibility Requirements

• You are a permanent Canadian resident
• You have reached the age of majority in your province
• You need a personal income of at least 60,000 or a household income of $100,000

Scotia Momentum Visa Infinite

Annual Fee	$120
APR	20.99%
Cash Advance Rate	22.99%
Welcome Bonus	10% cash back

Scotia Momentum Visa Infinite has one of the highest cash back earn rates with a 4% return on every dollar spent on groceries, expenses, subscriptions and even recurrent bills. Gas and daily transportation expenses like trains, buses, and metros will earn you 2% on the dollar. All other purchases will earn you 1%. Moreover, during the bonus period (first 3 months of signing-up), you’ll receive a return of 10% on any expense (capped at $2000). This is equivalent to a $200 cash bonus when you spend $2,000 in 3 months. You can redeem your cash back rewards as credit or have it deposited into your chequing or savings account. 

Extra Features 

• Insurance coverage – Provides classic travel protection such as medical insurance, flight delays insurance, trip cancellation insurance, baggage insurance, mobile insurance and purchase protection.  
• Annual fee – For the first year you sign-up, your annual fee will be waived. 

Eligibility Requirements

• You have reached the age of majority in your province
• You need a personal income of at least 60,000 or a household income of $100,000

Tangerine Money-Back Credit Card

Annual Fee	$0
APR	19.95%
Cash Advance Rate	19.95%
Welcome Bonus	1.95% balance transfer interest

Tangerine’s Money-Back credit card is well balanced and overall has the best cash back value. With no annual fee, a cash back earn rate of 2% on any 2 major spending categories, and 0.5% cash back on all other purchases, Tangerine provides great value and flexibility. Moreover, if you deposit your money into a Tangerine’s savings account, you can add a third spending category that can earn you 2% in cash. 

Extra Features

• Purchase Assurance and extended warranty – Shop confidently with Tangerine’s Purchase Assurance which will cover any theft, loss or damage to your items within 90 days of the purchase date. 
• Balance Transfer – Get a low-interest rate of 1.95% for 6 months if you transfer your balance within 30 days of owning the card. 

Eligibility Requirements

• You must be a permanent resident of Canada and be the age of majority in your province 
• You must have an annual income of at least $12,000
• There should be no bankruptcies declared over the last 7 years 

Bottom Line

Cash back reward credit cards are very attractive due to their flexibility and simplicity. Rather than using point-based credit cards which typically limit you to travel and merchandise expenses, cash back gives you the freedom to use your money as you please. Moreover, when you redeem rewards with your points, the value of the point changes based on what you buy which can easily lead to a loss. On the other hand, cash back credit cards provide a simple value system where you know exactly what you’re getting.