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Tuesday, June 9, 2015

TD Travel Rewards Visas to lose value in reward redemptions as of August 16th

At the start of 2015 we put out a piece that got a lot of coverage about 2015 being the year that credit card rewards come crashing down to earth here in Canada.  We predicted this based on the voluntary lowering of the average interchange rate that is charged to merchants. For the most part, this hasn't really taken place yet which is a great thing as we've seen some issuers actually release cards that have higher rewards (BMO for one) but we've seen one card that was curtailed right at the start of the year and now we have another family of cards that are being devalued. Perhaps that banks are now seeing what the effect of the new interchange rate average is doing to their numbers as it has been roughly two months of it coming to fruition.

The latest set of cards that are being devalued are the TD Travel Rewards Visas. Of course the main card in the family of three cards is the TD First Class Visa Infinite Card, a mainstay in our Canada's Top Travel Rewards Credit Card rankings and also one of the most flexible cards is affected by this change that kicks in on August 16th.

Its funny how TD markets the change as the points being even more flexible now:
The only reason they are more flexible is that you no longer have to hit that minimum 10,000 points before redeeming. Now you can redeem as little as 250 points for a $1 credit to any travel booked on the card. Previously that 10,000 point requirement was for a $50 credit which was an equivalent of 200 points for $1. So while true they are using to hide the major devaluation hitting the card.

What they don't tell you in the marketing is that for redemptions with a value of up to $1,200 your points will be worth less than they are now.

The TD First Class Visa Infinite Card and Platinum Visa Card have always been known as having a 1.5% return on your spending excluding the bonus you get at Expedia.  With these changes that rate drops to 1.2% if you redeem 300,000 points ($1,200) or less. I would gather that most of you are in this position as 300,000 points is $100,000 of spending on the cards which a lot of people don't reach or take sometime to get to. Only if you redeem over 300,000 points (over $1,200) will you achieve the old rate of return of 1.5% for the portion of the travel over $1,200. Ultimately you can never achieve the same return due to that first $1,200 being redeemed at the 1.2% level. If you use TD's example of $2,275 travel equals 515,000 points you'll be hitting a ~1.33% return.

We here at Rewards Canada are very surprised at this change from TD considering their main competitors are still providing returns of up to 2% or more on many redemptions options. This could also be the big change we predicted at the start of the year however. TD could simply be the leader here and the other card companies may follow suit. We know some banks were willing to take a loss for the first few months of the interchange rate adjustment and they may well be applauding TD for this move as they can now adjust their cards accordingly to bring them back into the black.

The only good news to come out of this change is the TD First Class Visa Infinite now sees increased Travel Medical Insurance coverage of 21 days versus the previous 15 days as well as Trip Cancellation insurance being increased to $1,500 from $1,000.

Just a reminder that Expedia is still the fastest way to earn TD points (9 TD points/ $1 spent) as well that the travel redemption value when booking through Expedia does remain at the old level (10,000 TD Points = $50)

If you were considering this card you can still get it with a 40,000 point sign up bonus and First Year Free, just make sure you redeem your points before August 16th to get the full value out of them! You can apply for the card here.

Your thoughts? Let us know below!!!


  1. Now at 1.2% return rate.. where would you class it on your Canada's Top Travel Rewards Credit Card rankings? Does it fall down a notch or 2?

  2. Right now it sits in fourth place for the Travel Points with Fee category. Is the Aventura card better? Really hard to say as the value of Aventura points on average is probably the same as the new rate for the TD cards. Given that the TD card is more flexible than Aventura I would say all will stay the same right now.

  3. Trust Air Canada to obscure what they are doing. By my math, sitting with 240000 points that are currently worth $1200, in August they will only be worth $960...correct? A loss of $240,
    Other than forcing me to rush booking some travel, any other suggestions as to how to avoid the loss? (Buying overpriced merchandise or gift cards for companies I don't patronize isn't really an option)

  4. Your calcs look good. There is no good way to avoid the loss if you don't redeem prior to August 16th. One method that may work would be to buy a fully refundable ticket near that $1,200 level on Air Canada or other airline, redeem the points against the charge then call up the airline and get the ticket refunded so you have a $1,200 credit on your Visa account. Think of it as a cash back redemption.

  5. Do you still get the same value at Expedia for TD?

  6. You sure do! Up to 9 points per dollar if you book online via Expedia for TD

  7. Could you not avoid the loss by using the points for booking via Expedia for TD? The way I read it, the change only affects bookings that use "travel providers outside of Expedia for TD". Can you not use points against bookings made via Expedia for TD ?

  8. That is correct. The old redemption rate will remain with any redemptions via Expedia. Obviously they struck a deal whereby Expedia will pay a greater portion of the commissions to TD and with this change they are striving to drive more traffic to that relationship. Its unfortunate however as you may not always get the best prices on Expedia.

  9. Now we'll see just how much collusion there is among the big five banks in Canada, and if one or more of the players will try to stand out by not reducing their reward return rate. I for one am very nervous about my MBNA Rewards World Elite MC which is actually a true 2% cash back card.

  10. Considering mbna is owned by TD I would be nervous as well. That being said the mbna card has lower costs in terms of sign up bonus, insurance and benefits when compared to the First Class Visa so it does have that going for it and hopefully reason enough not to change the card!

  11. Thanks Rewards Canada, but I'm confused. Isn't the "Up to 9 points per dollar" the earn rate if you book on Expedia for TD and pay with your credit card? Isn't the redemption rate on Expedia for TD still the same at 1.5%? That's what their FAQ on the site says. http://support.expediafortd.com/app/answers/detail/a_id/3609

    Or am I missing something? Thanks in advance.

  12. Nothing changes with Expedia in terms of the earn or burn rate, however TD First Class and their other Visas allow you to book travel with any provider at any time. That used to be the straight 1.5% return and is now being devalued. The book travel anytime with any provider is (or was if we fast forward to August) the best feature of the TD First Class card!

  13. But isn't the redemption rate on ExpediaForTD just .5%? In other words, 10k points = $50. So while it's not changing, booking with ExpediaForTD isn't any better, right?