The new earning structure for the no fee BMO CashBack Mastercard have gone live today. We first let you know about the changes back on April 7 that see the card now offer 3% cash back on groceries (up to $500 spent per statement cycle), 1% cash back on recurring bill payments (also up to $500) and 0.5% back on all other purchases. Also kicking in today is an improved cash back redemption for the card as the minimum amount to redeem drops to $1 from $50.
Here is a more detailed recap of the changes:
Prior to today the card earned 1% cash back on all purchases made that has now changed to the following:
- 3% cash back on eligible grocery purchases, up to a maximum of $500 spent for each statement cycle
- 1% cash back on eligible recurring bill payments, up to a maximum of $500 spent for each statement cycle
- 0.5% unlimited cash back on all other purchases
As you can see BMO has boosted the earning rate for grocery purchases
to 3% with a cap of $500 spent for each statement cycle. That means you
can earn $15 cash back each month for groceries, well you can earn more
but that’s how much you’ll get at 3%, the remainder will be 0.5%. So if
you spend $1,500 a month on groceries you would receive $20 in total
cash back ($15+$5) with the new earning structure. Under the old
structure it would have been $15. Outside of groceries the card has in fact
become worse except for recurring bill payments but for everything
else. So that is the key with this card – it is primarily good for grocery purchases on it. If you make lots of purchases that do
not count as grocery you might be better off with a different card
albeit most no fee cash back cards in Canada have similar earn rates –
0.5% for non-category bonus purchases and higher rates in select other
categories. As you can see that BMO has made these changes to actually
bring the card in line with many of its competitors.
The changes for cash back redemption have made this card more liquid –
that is, it will become easier to redeem for your cash back. The current
redemption model for the card requires you to achieve $50 in cash back
to redeem for a one-time or recurring redemption. The new model that came into effect today allows you to redeem as little as $1 for a one-time
redemption or $25 for automatic recurring redemptions. This move s
the card up our list in Guide to Credit Card Cash Back Liquidity to the top with the Brim Mastercards.
Overall I would say the positive changes outweigh the negative changes
with the card. Being able to redeem for $1 is great, the 3% return on
groceries is great however the 0.5% on all other purchases gets a 👎
If you do choose to go for the card you can earn 5% back on all purchases in the first three months up to $100 cash back in total ($2,000 in spending) and you can take advantage of the 1.99% introductory rate on balance transfers.
Below is the most current offer for the card. It may not reflect the discussion above.