Tuesday, March 3, 2020

The least rewarding travel rewards credit cards in Canada

Here on Rewards Canada we spend a lot of time discussing the best credit card options and offers for the Canadian market. While we do discuss all types of rewards cards you can tell our focus is primarily on travel. Travel is the reward coveted by most Canadians hence the huge popularity in these type of credit cards. With over 70 different travel card options the rewards offered really vary by card and by issuer. We thought it would be fun to look at the opposite end of the spectrum with this post. Instead of the top cards or offers we thought we’d take a look at the least rewarding travel rewards cards in Canada.

Let me start off by saying that the worst or least rewarding credit cards out there are those that don’t  earn any rewards. With this piece we’re not gonna touch up on those but are going to look at the ones that you can actually earn rewards with but are the weakest in terms of redeeming those rewards for travel.

Recommend reading: The True Value in Reward Redemptions

Now, we have always stated that as long as you earning rewards on your credit card spending - and are financially responsible in that you pay off your balance every month - you are ahead of the game whether you are earning 0.5% or 5%. And there can be reasons why you are earning only 0.5% instead of 5%. You may have a poor to average credit rating, you may be a student with little to no credit rating or any one of many other reasons including being new to Canada. However you may also not be aware of what is in the market as you just have stayed put with a card for years or just took the one your bank gave you. Chances are you are fully capable of handling and using a better and much more rewarding card. And that’s where this post comes in - if you have one of the cards listed below and have a good to premium credit rating, pay off your bills every month and have income levels north of $40,000 there are better options for you.

The four least rewarding travel cards in Canada are as follows:

RBC Rewards+ Visa Card
The RBC Rewards+ Visa Card is RBC's entry level rewards card that rewards holders of the card with 1 RBC Rewards Point for every $2 spent on the card but bumps that up to 1 points for every $1 spent on gas, grocery and drug store purchases. When you go to redeem your RBC Rewards points for travel with this card you'll receive a $1 credit towards any travel for 100 points. This means you are receiving a 0.5% to 1% return on your spending. Thus you're average return will be below 1% unless you only use the card for gas, grocery or drug store purchases.

Scotiabank Rewards Visa Card 
Also an entry level card, the Scotiabank Rewards Visa Card rewards 1 Scotia Rewards point for every $2 spent on the card. There are no category bonuses with this card. When you redeem those points for travel you redeem at a rate of 100 points for $1 just like the RBC program above however you have to redeem a minimum of 5,000 points for a $50 credit. This means you are only receiving a 0.5% return on your card spending.

Vancity Enviro Classic Visa
The Vancity Enviro Classic Visa is a card that is only available to BC residents that rewards 1 Vancity Rewards point for every $2 spent on the card. It does have one category bonus, where you earn double the points for booking travel via Vancity Rewards. So for the most part when it comes to day to day spending this card is giving you only a 0.5% return as you redeem 100 points for $1 credit towards travel. You'll get 1% back on those Vancity Rewards travel purchases however.

HSBC +Rewards Mastercard
This relatively new card to our market is HSBC's new entry level card that is marketed more so towards being a low interest rate card with rewards so take this into account if you have this card or are considering it. It also has an annual that at time of posting is being waived for the first year. The card earns 1 HSBC Rewards point for every $1 spent on the card except for dining and entertainment where it earns 2 points per $1 spent. HSBC Rewards points are worth 0.5 cents each when redeeming towards travel which means this card gives a 0.5% return on all spending outside of the 1% for dining and entertainment.

As I already mentioned - just because you have one of the above cards it may not mean this is a bad thing. There could be very good reasons you have one of the above cards and by having one you are ahead of the game when compared to cards that have no rewards at all. However I want to make you aware that perhaps you should review what you have in your wallet to see if you can do even better with your rewards. There are plenty of no fee cards in our market where you will earn no less than 1% which means you could be doubling your rewards if you have one of the above cards.

I recommend checking out our Travel Rewards Credit Card comparison chart to see what options are out there for you!

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