Friday, May 1, 2020

Now live: New earn rates and easier redemption with the no fee BMO CashBack Mastercard

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:

Earning 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.

Redeeming changes
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.

Learn more about and apply for the BMO CashBack Mastercard here.

Below is the most current offer for the card. It may not reflect the discussion above.

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