Wow, thanks to our frequent news tip contributor @Joshnet we learned of some unexpected credit card news today. BMO is making changes to their BMO World Elite™* MasterCard®*. This card is the best travel card in the BMO portfolio of cards but in general over the years it has fallen in the ranks in the entire Canadian credit card market. Back in 2015 it was #1 in our Travel Points Cards with Annual Fee category but with multiple devaluations it started dropping down and is now in 5th spot. Now, it appears the card may even fall out of
the top 5 completely thanks to the changes that BMO has announced to
The first change to the card is the card name. The BMO World Elite Mastercard is being renamed the BMO Ascend World Elite Mastercard on May 3.
Earn Rate Changes
This is the area of concern with the newly revamped card, BMO is changing the earn rates. Two accelerated categories do get better, some stay the same and the base earn rate…. well let’s just say BMO took the axe to it. So you might say two better and only one worse that can’t be so bad can it? Well it depends on your spending habits.
Here’s what the card currently earns and will earn up to May 2:
- 3 BMO Rewards points for every $1 spent on travel, dining and entertainment purchases*
- 2 BMO Rewards points for every $1 spent everywhere else
And the new rates as of May 3:
- 5x the points for every $1 spent on travel
- 3x the points for every $1 spent on dining and entertainment
- 3x the points for every $1 spent on recurring bill payments like your streaming services, phone bills, or memberships
- 1 point for every $1 spent everywhere else
Ok, so travel is getting better. 5 points per dollar, that’s pretty sweet or is it? Well if you want to get technical it’s the equivalent of 3.34 points per dollar (or a 3.34% return) as you have to redeem 150 points towards $1 of travel. I’m not going to go into huge detail here, rather you should read our article When earning 5x points isn’t the same as earning 5x points – a loyalty lesson as that goes into great depth on this subject that BMO actually triggered last year. Anyways, to get 3.34% back on travel spending is pretty sweet though this is capped at $15,000 in spending annually. That kind of surprised me – the people who you are trying to appeal with a high earn on travel are those who spend a lot on travel and easily spend way more than $15,000 per year in that category.
BMO claims it is the highest rewards points for travel of any premium card in Canada but is it? Well no other card awards 5 points per dollar on travel – no wait, actually the HSBC World Elite® Mastercard® awards more at 6 points per dollar. So BMO can’t just mean points earning can they? It sure does seem that way if you read their disclaimer:
based on a comparison of the non-promotional travel rewards points on
premium flexible Canadian credit cards as of February 1, 2022. Flexible is defined as points earned when you purchase travel anywhere and Premium refers to cards with an annual fee of ≤ $150 or has an income requirement of ≤ $150,000 annual individual income.
It strictly says points earned when you purchase travel anywhere with an annual fee of equal to or less than $150. Well the HSBC card is $149 and it also falls below the income requirements. There is no claim to the actual value of the points so this could potentially be considered false advertising on BMO’s part. However if they update the claim to read earn and redeem value then they can make that claim or can they? Well BMO’s 5x points are worth 3.34 cents, HSBC’s 6x points are worth 3 cents, so if that’s what they actually mean then yes, they can make that claim.
So that’s travel, what about the other earn rates?
Dining and entertainment remain at 3 points or a 2% return and now they have added recurring bills to that category which means those move up from 2 points per dollar to 3 points. That’s a nice addition to the card but not a game changer. However there is a big caveat now – the 3x Dining and Entertainment is capped at $10,000 per year and so are recurring bills.
The rest of the spending on the card though? This is what just killed this card. They are moving the base earn rate to 1 point per dollar down from two. Cutting it in half. And if you are quick at math from the above numbers you’ll see that’s worth .67 cents or a .67% return on all other spending. I’ve said this since BMO launched their eclipse cards late in 2020 that no premium card should have a base earn rate below 1% yet now with these changes BMO has three premium cards with 0.67% base earn rates. That’s absolutely atrocious. I would never pay a $120 or in this case a $150 annual fee on a card that can’t give me a 1% base earn rate. Think about Costco which BMO used to promote so much on their cards – you are going to earn 0.67% at Costco with this card. The HSBC card on other hand? 1.5%. Brim World Elite Mastercard? 2% and the list goes on (See: Top 5 Mastercard Cards to use at Costco). And it is this big clip to the base earn rates that actually make this card worse, well that and the lower caps in place now – it used to be a $50,000 total cap across the categories, now we are at $45,000.
Then what happens if you hit those caps? $15,000 travel, $10,000 each on dining and entertainment, $10,000 recurring bills? Well you earn only the 1 point (0.67%) per dollar in those categories on any spending above that level. I don’t know about you but before the pandemic the Rewards Canada family easily spent more than that in travel, dining and entertainment on annual basis
Seeing that they devalued the travel redemption rate last year which knocked off some value from this card at that time and had also done so a few years prior there are no changes in redemption value. Whew!
Still you have to redeem for travel via BMO Rewards whereas most competitors allow you to book travel with anyone and give you time after you travel to redeem for those charges. Not so much with BMO. So here you have less flexibility, tighter caps and overall lower earn rates than the likes of the HSBC World Elite® Mastercard®, the American Express Cobalt® Card (whoops, can’t compare it since it costs $155.88 per year 😉), the Scotia Gold American Express Card and more!
Wrapping it up
Just when I thought BMO was done with their devaluations and borderline marketing (or as I called it last year: shady marketing) they give us more. Their only hope at keeping a competitive card in the market has just been dashed. Yes, it will be marketed as the highest earning travel card and that irks me. Say you spend $20,000 a year on travel and I know a lot of people who do spend that or more you would end up earning 80,000 points on the BMO Ascend Mastercard or about $536 of value towards travel. The HSBC Card would net you 120,000 points worth $600 that you can redeem with any travel provider. So please keep that and everything else already mentioned in mind if you are considering this card.
And I’ll leave you with my Podcast from last year when they devalued most of their cards including the World Elite Mastercard: BMO, What are you doing? Listen to it here or on YouTube: