in 2021, 78 per cent of credit card holders frequently use a card which offers some kind of reward. The most popular was cash-back rewards, attracting 54 per cent of these cred card holders, followed by store credit, at 25 per cent, and travel reward cards, at 23 per cent. “Cash-back offerings have never been more attractive in Canada than they are now and there’s also never been more people looking for cash-back credit cards,” Mikael Castaldo, General Manager Of Everyday Banking at Ratehub, said. “(They’re) appealing for everyday use because you can earn a significant sum in cash back over time, especially if you use your card regularly to pay for specific items or recurring bills.”
Matt Brownlow, a 33-year-old mortgage broker from St Catharine’s, Ontario, said he recently ditched his President’s Choice points card in favour of a Tangerine money-back credit card so that he could use the rewards as “treat money”.
“If there’s something that I’m saving up for, I might set that cash-back money aside. With Tangerine, it’s great because it can go into a separate savings account. Last month, I bought a food processor with that money because I had been eyeing one of those,” he told BNN Bloomberg. “I’ve also used that money to put into my Questrade account. I just deposit it right when it gets to a certain amount … I can put that into an exchange-traded fund and watch that money grow a heck of a lot faster.”
According to Castaldo, the most appealing feature of cash-back rewards is that they allow you to maximize your savings in a way that points might not. “You can set it up so your cash back automatically goes into your savings or chequing account and treat that as another savings benefit,” he said. Moreover, their simplicity is often appealing to the customer. “It’s extremely clear the rate of return that you’re getting versus some of these points programs that can be convoluted. And that transparency seems to resonate with a lot of people,” Castaldo added.
