Best cashback credit cards in Canada

What are they and how do they work?

November 6, 2020

No doubt you’ve heard of cashback rewards cards before. Getting paid to use your credit card? Sign us up!

But there’s more to cashback than just tapping your card and watching the dollars roll in. Different cards come with different cashback rates, annual fees, and redemption periods, all of which impact how rewarding your card can really be.

To help you understand the ins and outs of cashback credit cards, we’re breaking down everything you need to know, from how they work to how some of the most popular cashback cards in Canada compare.

What are Cashback Rewards?

Cashback is a credit card incentive that earns you rewards on your purchases. Most cashback cards pay you back a percentage of the amount you spend within certain categories, like when you buy groceries or fill your gas tank. Some cards will put cash back into your pocket for every single purchase you make, others might earn you cashback on your recurring bill payments. It all comes down to the fine print.

Cashback vs. Rewards Points

With so many options out there when it comes to rewards cards, the differences between cashback and traditional points cards can get murky. Knowing how they work is key to making sure your credit card is the smartest and most rewarding choice for you.

One of the big advantages of cashback rewards is how easy they are to redeem and understand. Your reward earnings are tracked as you spend and usually paid out to you monthly or annually without much need for action on your part.

Points cards can be more difficult to navigate. Generally, they can be redeemed for things like gift cards, merchandise, or travel. Sometimes they can even be used to pay off your credit card bill.

The tricky thing about points is that redemption options can be limited. If you cash them in for travel, you might only be able to use them on certain dates. Or the merchandise selection is slim if you choose to go that route.

How do Cashback Credit Cards Work?

There are so many cashback cards out there, and each card works a little bit differently. We’ve summarized the most common features across cashback cards in Canada, all of which impact how, when, and where you can earn cashback.

Earning Cashback & Payback Rates

The specific earn rate varies by card, but generally, it’s between 1-4%. So, if the cashback rate of your card is 1%, you will earn $0.01 for every dollar you spend. For example, you’d earn $10 every time you spent $1000 on eligible purchases. 

Some cashback cards limit how many spend categories you can earn rewards on. The maximum is usually three, with a popular combination being groceries, gas, and recurring bills. Some cards will earn you cashback on all of your purchases but often at a lower rate.

Eligibility Requirements

Cards with higher reward earnings usually come with a price tag like an annual fee. These higher-earning cards often have stricter eligibility requirements, like a minimum qualifying income. The most common minimum is $60,000/year.

No fee cards typically don’t have the same eligibility requirements, making them a better option for first-time credit cardholders. Usually, no-fee cards don’t have as powerful payback rates and reward earning potential than the cards you pay a premium for.

Redeeming Rewards

Redeeming cashback is more straightforward compared to other points and travel miles cards.

Most cashback cards limit when and how often you can claim your rewards. The most common redemption periods are monthly or in some cases annually. Some cards only let you redeem your rewards once you’ve earned a minimum $25 or $50 in cashback.

Depending on the card and which bank issues it, you may also have options when it comes to how you redeem your cashback. Some common forms of redemption include;

  • Credit on your card statement
  • Cheque or direct deposit
  • Travel, gift cards or merchandise

How do Neo Rewards and cashback work?

Neo Rewards work a little bit differently than your standard cashback card. We wanted to create a rewards system that puts more money back into your pocket when you spend money at the places you love.

With Neo, you have the option to choose between three reward tiers based on your personal spending habits - Essential, Plus, and Max..

Neo Essential

With Neo’s Essential rewards plan, you can earn an average 4-20% cashback when you use your card at partner merchants. Rather than limiting rewards to specific spend categories, we’ve partnered with thousands of local and national brands, so you can earn rewards when you shop for groceries or pick up your morning coffee. This can include getting 15% off on your first bill at that hot new restaurant you’ve been meaning to try, earning a free coffee from your favourite cafe when you visit six times, or even getting 20% off for trying a new yoga class for the first time. Neo Essential gives you tons of great value for no annual fee.

Neo Plus

When you choose Neo’s Plus rewards plan, you can expect to earn 5% cashback on average at partner merchants, plus you earn 0.5% on all other purchases. Neo Plus is a great option if your monthly spend averages between $750-$999 each month. You’ll earn more rewards for just $4.99 a month.

Neo Max

Neo Max increases your reward earning power with each purchase for $9.99/month. On average, you earn 6% cashback at Neo partner merchants and 1% cashback on non-partner purchases. Neo Max is recommended if you spend $1000 or more per month.

Get rewarded instantly

Forget annual redemption periods and limits. With Neo, your cashback rewards are credited to your statement instantly when you make a purchase at one of our partner merchants.

Your Card, Your Rewards

Unlike options from the big 5 banks, you don’t need to pay an annual fee to earn great rewards. With the no-fee Neo Card, you can instantly earn 4%+ cashback at partner merchants, compared to other options that average at 1% cashback.

Best Cashback Rewards Credit Card

Compare Neo’s Reward Card plans against some of the leading cashback rewards cards in Canada and see what sets us apart from the rest.

Neo Rewards Cashback Card
Neo Cashback Rewards Mastercard (and plans)
Annual Fee Neo Essential: No Fee
Neo Plus: $4.99/month
Neo Max: $9.99/month
Interest Rate 19.99%-24.99% purchase APR
22.99%-26.99% cash advance APR
Rewards details
Neo Essential
— 4% cashback average at Neo partners (local, national, and online) including groceries, gas, restaurants, coffee, shopping, and entertainment
Neo Plus
— 5% cashback average at Neo partners (local, national, and onlne) including groceries, gas, restaurants, coffee, shopping, and entertainment
— 0.5% cashback on all non-partner purchases

Neo Max
— 6% cashback average at Neo partners (local, national, and online) including groceries, gas, restaurants, coffee, shopping, and entertainment
— 1% cashback on all non-partner purchases

Tangerine Money Back Credit Card
Tangerine Money Back Credit Card
Annual Fee No Fee
Interest Rate 19.95% purchase APR
19.95% cash advance APR
Rewards details
— 2% cashback on 3 shopping categories (select 2 categories from groceries, furniture, restaurants, hotel-motel, gas, recurring bill payments, drug store, home improvement, entertainment, public transportation etc.)
— 0.5% cashback on all other qualifying purchases
Monthly cashback redemption frequency

RBC Cash Back Mastercard
RBC Cash Back Mastercard
Annual Fee No Fee
Interest Rate 19.99% purchase APR
22.99% cash advance APR
Rewards details
— 3% cashback on grocery store purchases
— Up to 1% cashback on all other qualifying purchases
Fuel savings (instant 3 cents/L at Petro-Canada)
Annual cashback redemption frequency

BMO Cash Back Mastercard
BMO Cash Back Mastercard
Annual Fee No Fee
Interest Rate 19.99% purchase APR
22.99% cash advance APR
Rewards details
— 5% cashback on all purchases (up to $100) for first 3 months
— 3% cashback on groceries (up to $500/month)
— 1% cash back on recurring bill payments (up to $500/month)
— 0.50% on all other purchases

CIBC Dividend Visa Card
CIBC Dividend Visa Card
Annual Fee No Fee
Interest Rate 19.99% purchase APR
22.99% cash advance APR
Rewards details
— 2% on grocery purchases
— Up to 1% on everything else
Annual cashback redemption frequency

Scotia Momentum No-Fee Visa Card
Scotia Momentum No-Fee Visa Card
Annual Fee No Fee
Interest Rate 19.99% purchase APR
22.99% cash advance APR
Rewards details
— 1% on gas station, grocery store and drugstore purchases and on recurring payments
Annual cashback redemption frequency

TD Cash Back Visa Card
TD Cash Back Visa Card
Annual Fee No Fee
Interest Rate 19.99% purchase APR
22.99% cash advance APR
Rewards details
— 1% on gas station, grocery store and on recurring payments
— 0.5% in Cash Back Dollars on all other Purchases

SimplyCash Card from American Express
SimplyCash Card from American Express
Annual Fee No Fee
Interest Rate 19.99% purchase APR
21.99% cash advance APR
Rewards details
— 2.5% cashback on purchases (up to $150 cashback) for the first 3 months
— 1.25% cashback on purchases after first 3 months

SimplyCash Preferred from American Express
SimplyCash Preferred from American Express
Annual Fee $99
Interest Rate 19.99% purchase APR
21.99% cash advance APR
Rewards details
— 2% on all purchases and no limit on how much you can earn

CIBC Dividend Visa Infinite Card
CIBC Dividend Visa Infinite Card
Annual Fee $99
Interest Rate 19.99% purchase APR
22.99% cash advance APR
Rewards details
— 4% cashback on eligible gas and grocery purchases
— 1% cashback on all other purchases
— 2% cashback on Tim Hortons® and TELUS® purchases
Get a first year annual fee rebate

TD Cash Back Visa Infinite
TD Cash Back Visa Infinite
Annual Fee $120
Interest Rate 20.99% purchase APR
22.99% cash advance APR
Rewards details
— 10% cashback on eligible purchases for first 3 months (on up to $2,000 in spending)
— 3% cashback on gas, groceries and recurring bills
— 1% cash back on all other purchases
Get a first year annual fee rebate

Scotia Momentum Visa Infinite
Scotia Momentum Visa Infinite
Annual Fee $120
Interest Rate 20.99% purchase APR
22.99% cash advance APR
Rewards details
— 4% cashback on groceries and recurring bills
— 2% cash back on gas and daily transit
— 1% cash back on all other purchases
Get a first year annual fee rebate

Check out the Neo Card to learn more about Canada’s most rewarding spending and savings experience.