The best travel rewards Mastercard in Canada will be undergoing some changes in February. The no foreign transaction fee HSBC World Elite® Mastercard® has been making inroads in our market since its launch in 2017 and will now see its first major revamp. The news is both good and not so good – there are changes to the earn rates that will work out for the better for some and worse for others. It will also see positive changes to the insurance package, annual fees, annual fee rebates and more.
The Earn Rates
HSBC seems to be following in TD’s footsteps as the earn rate changes on the World Elite Mastercard are reminiscent of the changes to the TD First Class Travel Visa Infinite Card that just kicked in a couple of days ago. Currently the HSBC card has two earn rates, 6 points per dollar for travel purchases and 3 points per dollar on everything else. Come February they will add in a new accelerated earn rate category for gas, groceries, and drug store while dropping the base earn rate. The earn rates will be as follows:
- 6 Points for $1 in Net Purchases which are Travel Purchases. This earn rate applies to a
maximum of $50,000 in Travel Purchases on the Account in a calendar year. After the maximum
is reached, the earn rate of 2 Points for $1 in Travel Purchases applies. - 4 Points for $1 in Net Purchases that are Gas, Grocery and Drugstore Purchases;
- 2 Points for $1 in Net Purchases, other than Travel, Gas, Grocery and Drugstore Purchases
As you can see travel purchases remain untouched so we’ll move on to the next earn rate. This is the new accelerator for gas, groceries and drug stores. At 4 points per dollar that is a ~33% boost on these purchases and as HSBC Rewards points are worth 0.5 cents each towards travel this represents a 2% return*. This is a good change for those who spend lots in these three categories.
The bad news is the base earn rate is taking a ~33% cut from 3 points per dollar to 2 points per dollar. Or in terms of return towards any travel bookings, 1.5% down to 1%. This is a big hit for those who have been using this card for purchases where other cards don’t have accelerators such as Costco and a lot of other everyday spending locations. I am glad they have at least kept the value at 1% for travel as others like BMO and TD (unless you use ExpediaForTD) now have base earn rates below 1% when redeeming towards any travel.
Fees
The card will retain its $149 annual fee (First year free right now though!) on the primary card and the good news in this department is HSBC is dropping the fees on supplementary cards. That means any additional cards you add to your account will no longer cost $50 per year. This puts the card in-line with cards like the American Express Cobalt® Card which doesn’t have fees for supplementary cards.
If you bank with HSBC and are a Private, Premier or Advance client the bank will also be increasing the rebate you receive towards the annual fee on the card. The rebates are $149, $50 and $25 respectively.
Insurance
The card is seeing changes to its insurance coverage and those are all positive:
Emergency Travel Medical Insurance
The out of province medical coverage is being boosted from a $1 million max to $2 million plus it will also now provide coverage in Cuba. The big change here however comes to coverage to those 65 and up. Right now the card provides 31 day coverage for those up to 64 years old and no coverage for those 65 and up. That all changes as those who are 65+ will receive 21 days of coverage! This is great news and should attract a lot of attention as this will move the card to the top of the list for this sort of coverage for those over 65.
Baggage Delay or Loss Insurance
Some small but also significant changes here. The card’s current baggage delay coverage doesn’t kick in until it is delayed by 12 hours and this will be changed to 6 hours. With most cards offering this coverage with 4 to 6 hours delay it puts HSBC into the mix.
For baggage loss they are increasing coverage to $1,000 per person from $750.
New Insurance Coverage:
The card will receive new insurance coverage including Flight Delay and Price Protection. It has been puzzling the card never had Flight Delay coverage previously but now it will. Then they are adding a benefit we have seen cards move away from and that is price protection! The new coverage is as follows:
Flight Delay Insurance:
• Reimbursement of up to $250 per day to a maximum of $500 total (2 days) per trip for all insured persons travelling on the same trip for certain necessary and reasonable expenses if the confirmed scheduled flight is delayed by 6 hours or more.
Hotel/Motel Burglary Insurance:
• Protects you from theft of most items of personal property from a hotel/motel room to a maximum of $1,000 per occurrence.
Mobile Device Insurance:
• Coverage of up to $1,000 if your eligible mobile device is lost, stolen, accidentally damaged, or experiences mechanical failure.
Price Protection Service:
• When you purchase a new item of personal property and find the same product advertised at a lower price within 60 days of your purchase, the difference will be refunded, up to $500, subject to a calendar year maximum of $1,000 per account.
Benefits
All other benefits including the No Foreign Transaction fees, airport lounge access and the annual $100 travel enhancement credit remain the same on the card.
Rewards
The current rewards on the card will remain the same however it does look like HSBC has also brought back the option to book travel through them. Thus you get the best of all travel rewards – book travel yourself and redeem points against the charge, convert to airline partners or book travel through HSBC and redeem points right at the time of bookings
Wrapping it up
I would have to say for the most part the HSBC World Elite Mastercard will remain as one of the best travel rewards Mastercards in Canada as it has become an even more well rounded travel card. Yes, the cut in the base earn rate is a tough pill to swallow but hopefully for most they will be able to make up for it with the extra point earned on gas, grocery and drug store purchases. Ultimately it will come down to your spending habits to see if this card still fits the bill for you. One group of Canadians that it will really fit the bill for now are those 65 and over thanks to that amazing out of province medical coverage. I’d love to hear everyone’s thoughts on the changes in the comments below!