Two weeks ago we gave quick mention to changes coming to the Scotiabank Gold American Express Card. These changes have been confirmed with Scotia and cardholders are now receiving notices of the changes which are for the most part better!
Here is a summary of what’s happening to the card:
|Item Changing||Until July 31, 19||From August 1, 2019|
|Annual Fee for primary cardholder||$99||$120|
|Foreign Transaction Fee||2.5%||0%|
|Grocery Dining Entertainment earn rate per dollar||4 points||5 points|
|Gas||4 points||3 points|
|Daily Transit||1 point||3 Points|
|Select Streaming Services||1 point||3 points|
|All other purchases||1 point||1 points|
|Travel Medical Insurance for those 65 years or older||10 days||3 days|
|Trip Cancellation / Trip Interruption||$2,500 per person||$1,500 per person|
I got to catch up with and discuss the card changes with Brett Mooney, Senior Vice President, Credit Cards. You may recall Brett from Podcast Episode 41 when they launched the Scotia Passport Visa Infinite Card.
We discussed the changes to the card and some of the reasoning behind them. Brett told me it is all about creating value and solutions for their customers and they need to evolve their products for the ever changing market in Canada. They wanted to make the card a more lifestyle focused card because Canadians are eating out more, moving to streaming services, using ride sharing and transit even more. Things like Netflix, Spotify and Apple Music have become so popular and part of many people’s everyday lives that Scotia wanted to be the first to bonus that category and have done so with this card.
In some ways they have taken what American Express did with the Cobalt card and gone beyond that with the higher points earning for Daily Transit, Gas and a higher spend cap in bonus categories of $50,000 annually, albeit the Cobalt’s cap is only on eats and drinks not transit. But then Scotia added in the streaming services which will be very appealing to many. Finally, and this is the big change, is the addition of the no foreign transaction fee! Following in the footsteps of its brethren card, the Scotia Passport Visa Infinite card, Scotia will be dropping the 2.5% foreign transaction fee to 0% on the August 1 change date. You’ll notice one other change and it is bolded in Scotia’s notice to cardholders and was confirmed by Brett to me last week is that the bonus multiplier categories will only pay out the big points on purchases in Canadian currency.
|Thanks to RC contributor Jeff W. for supplying the letter!|
That means if you are dining out in the U.S., buying gas in France and so on you will not earn 5x points or 3x points respectively. Those purchases will only earn 1 point per dollar but they will not incur the 2.5% FX fee. You may ask how does this compare with something like the Cobalt card that will earn 5x points on foreign dining? Let’s take a look:
|Scotia Gold Amex||American Express Cobalt Card|
|$100 dining bill in the U.S.||$100||$100|
|Total billed price in Canadian $ (1.34 exchange rate + FX fee for Cobalt)||$134||$137.35|
|Minimum value of points||$1.34||$6.87|
|Net price of dining bill||$132.66||$130.48|
As you can see the lack of offering the category multipliers outside of Canada even with no foreign transactions fees may not provide the best return. This however is only one example and one category , take into account most other types of shopping not made in C$ (including online shopping) and you will see the Scotiabank Gold American Express card come out ahead due to the savings of 2.5% and the 1 point earned per dollar.
Brett Mooney did say they are making this card about lifestyle, particularly lifestyle in Canada which makes sense as to why they set the earn rates they did and limited it to Canadian currency. They did not want to take away from the Scotia Passport Visa Infinite card which is about travel, hence the latter’s ability to still earn its category bonuses abroad with no foreign transaction fee.
Overall these are very welcome changes to the Scotiabank Gold American Express card! I would believe that the other big card issuers in Canada will take note of what Scotia is doing. Not just with the Gold Amex but also the Passport Visa Infinite Card. There are rumours that RBC is going to be changing the Avion program and I would think that Amex will be watching closely to see how these changes affect the Cobalt card. It will be interesting to see what transpires for the rest of this year in the premium credit card market!
Brett finally said they aren’t done yet with positive changes to their products and if past experience is any indicator then we can hold this to be true. For the most part, every time Scotia has told has told us changes are coming they have been positive movers in the market.
What are your thoughts on these changes?