Out of the several hundred credit card options in Canada there are perhaps three dozen cards that get the majority of attention. Rightfully so, some of these cards deserve the attention they get – cards like the American Express Cobalt Card and the Scotiabank Passport Visa Infinite Card, just to name a few. While others get more attention than they deserve and that is our focus here, the cards we think are overrated.
Whether it’s the issuing bank’s own marketing prowess or coverage of the cards across websites, blogs, social media and forums, there are some cards that I personally feel garner too much attention.
Before I discuss the three cards I feel are most overrated I want to clarify that they are by no means bad cards, in fact, in some specific situations they can be quite good but the lauded coverage they receive is excessive, considering that in many cases, there are better options out there.
The 3 most overrated credit cards in Canada
In my opinion these are the three most overrated credit cards in Canada:
BMO CashBack World Elite Mastercard
A favourite of many finance, money and even some points & miles blogs in Canada and the winner of many awards/badges from those sites, the BMO CashBack World Elite Mastercard card comes in highly overrated.
Why is it highly overrated? Because of spending caps on its accelerated earn rates, namely the much advertised 5% cash back on groceries. What a lot of those sites & influencers don’t tell you (and what BMO doesn’t tell you up front unless you look at the fine print) are of the card’s pathetically low spending caps on its accelerated earn rates.
The 5% cash back on groceries? Only available on $500 per month in spending. The 4% on transit/ride sharing is capped at $300 per month, 3% on gas and EV charging is also capped at $300 per month while the 2% for recurring bills is capped at $500 per month.
That $500 on recurring bills would barely cover the average utility bills here in Calgary, let alone adding things like cell phone, internet etc. Have a truck with a 100 litre gas tank? You’ll hit the $300 cap on gas with less than two fill ups.
It boggles the mind as to how this card ranks so high up on many finance blogs… actually, let me take that back, it doesn’t boggle the mind, it simply comes down to one of two reasons or both!
The first is purely a money grab – there are sites that put earning commissions from credit cards ahead of providing proper information to the reader. And it’s not just for this BMO card, it’s pretty rampant with other lackluster cards receiving the spotlight across many sites, all in the name of earning the mighty dollar.
The second, is a lack of actual knowledge of the product. A writer/journalist/blogger/freelancer sees 5% on groceries and BMO’s marketing that it’s the highest grocery earn rate in Canada and they go with it – without actually researching the card and seeing those paltry spending caps. Whatever the reason, the card is highly overrated by many.
I will point out that if you are a low spender in the accelerated categories, the card is competitive – but this is a World Elite Mastercard. A World Elite Mastercard has an annual income requirement of $80,000 personal or $150,000 household. That’s not really akin to low spending – people who use World Elite Mastercards tend to be higher spenders who will easily eclipse those spending caps and then be relegated to only earning 1% cash back on spending with this card.
It’s so much easier and more rewarding to go with cards that have higher spending caps even if they have lower cash back earn rates. One such example is detailed in our Loyalty Lesson: How a card with 4.16% cash back can be better than one offering 5%
PC World Elite Mastercard
An extremely popular card with Canadians and another favourite of many finance and money blogs, the PC World Elite Mastercard is one that I have personally never seen the draw to and believe to be highly overrated.
As I mentioned in This Week in RWRDS for August 2 I don’t understand the appeal of it and why it is popular. All I can attest it to is that perhaps most people don’t know better and think “well I shop at Loblaw stores, so getting this card must be the best option.” Unfortunately in many cases it is actually not the best card for Loblaws, just as the CIBC Costco Mastercard is not the best card to use at Costco warehouses!
Here’s some the reasons why I think it is overrated:
- The 30 points per dollar on groceries is only earned at Loblaws stores. You have other cards earning this much or more in cash back or travel rewards and they earn it at all or almost all grocery stores – not just Loblaw stores.
- The points earned can only be redeemed at PC Optimum partners – Loblaw grocery stores, Shoppers Drug Mart, Esso/Mobil. There are many other cards with the same or better earn rates that let you redeem your points as statement credits or provide straight cash back that can be used towards any purchase. In the end those other cards are much more flexible with their rewards
When you look at our feature on The best credit cards to use at Loblaw grocery stores the card ranks 7th overall for higher grocery spend and while it ties two other cards for first in low spend, the other two cards are not limited to just Loblaw stores for the highest earn on groceries nor are you limited to just redeeming at Loblaw stores.
And, don’t get me started about the 45 points per dollar spent on the card at Shoppers Drug Mart. I was just in a Shoppers store the other day and over the PA system was an advertisement about the card and it made a big deal of the card earning 45 points per dollar at Shoppers. No. The card earns 30 points per dollar at Shoppers. The other 15 points are awarded to any and all PC Optimum members who shop at Shoppers. I mean I use my American Gold Rewards Card to earn 2 Membership Rewards points per dollar spent and I still earn the 15 PC Optimum points for showing my PC Optimum card.
Granted, 30 PC Optimum points is a really good earn rate for Shoppers purchases, that’s a 3% return that is only matched or beaten by the Amex Gold’s 2x points when used for Fixed Points for Travel or converted to Aeroplan, Flying Blue, British Airways etc. and the BMO eclipse Visa Infinite Privilege Card with a 3.33% to 4.17% return on drug store purchases when those points are redeemed for travel or BMO Investment products. But the Amex and BMO cards have one more advantage, the accelerated earn rates are earned at all drug stores (hello London Drugs!), not just Shoppers.
And yes, the PC Optimum card even has RWRDS Canada badges on its landing page! However, those badges are our Canada’s Choice badges based on how Canadians voted for their favourites – they are not awarded based on RWRDS Canada’s own actual research and comparisons. It is from our Canada’s Choice awards where I really started to question the appeal of the PC Optimum card seeing how many people voted for them and how our research doesn’t even have the card anywhere near to being awarded a badge.
RBC Avion Visa Infinite Card
Back in the day we used to consider the RBC Avion Visa Infinite Card as one of the best travel rewards cards in Canada and yes, it is still one of the better cards but over the past decade many other cards have surpassed it.
If you have followed RWRDS Canada for any period of time you’ll know we frequently call this card out for its poor earn to burn ratio. That is, you have to spend a lot on it to get rewarded – much more than you would have to spend on other cards for the same type of reward.
The card is popular in the points & miles community as it is easily churnable, meaning you can earn the welcome bonus over and over, not to mention it is the easiest bonus to earn in Canada as you simply need to be approved for the card and not complete any spend. The community also likes how you can convert those points to British Airways, American Airlines, Cathay Pacific and WestJet.
However, the majority of Canadians who have this card, don’t have in their wallet for the churnability nor the conversion options – they have it for the standard RBC Avion Rewards travel options and for those options, this card is highly overrated.
A lot of sites and even RBC themselves, laud this card without telling you how much you have to spend to be rewarded. Want that flight in North America for only 35,000 points via the Avion Air Redemption schedule? That will require $28,000 to $35,000 in spending on this card. The same reward on other cards? As little as $8,000 on the American Express Cobalt Card, $15,000 or even less on the MBNA Rewards World Elite Mastercard, $12,500 or less on the Scotiabank Gold American Express Card and the list goes on! You could potentially get yourself multiple rewards on other cards with an equivalent spend that would only get you one reward on the RBC Avion Visa Infinite Card!
And I won’t even get into the topic of trying to use the Avion Air Redemption schedule for flights to Europe. You can learn more about that here: Why credit card reward charts rarely provide good value for economy class flights to Europe.
Or how the card lacks any real travel benefits – yes, the Cobalt Card doesn’t really have any benefits either but at least it has the high earn rates. That’s the trade off, there are cards with high earn rates with less benefits or cards with lower earn rates but they come with a lot of benefits. The Avion card? It has low earn rates and not a lot of benefits!
I also recall reading one finance website that ranked the Avion card as one of the best hotel cards in Canada. One of the best hotel cards in Canada??? I would love to have some of what they were smoking when they wrote that post!
First of all, there is only one true hotel card in Canada with consumer and business versions of it but I’ll let that slide as you can use many travel card’s points and miles (even Aeroplan cards) for hotel stays, but the Avion card is not one of the best of them. In fact there’s several dozen travel and even cash back cards that are better suited for the task of hotel rewards.
You want to use travel points for hotels? The American Express Cobalt Card, Scotiabank Gold American Express, Scotiabank Passport Visa Infinite Card, and TD First Class Travel Visa Infinite Card are just some of the better options as you don’t have to spend as much to receive the same reward value as the Avion card when redeeming for a hotel stay!
For example a $200 hotel stay would require 20,000 Avion Rewards points or $16,000 to $20,000 in spending on the Avion card. A $200 hotel stay with the Scotiabank Gold American Express card will also require 20,000 points but that can be achieved with as little $3,333.33 in spending, or as little $4,000 for 20,000 points on the Cobalt Card and so on!
Now you do have the option to tie in the RBC ION+ Visa card to make the Avion card more competitive but it still ends up providing lower value than something like the Cobalt Card not to mention you have to go through the hassle of having two cards, two sets of fees, having to transfer points between the two card accounts and so on.
Recommended reading: Loyalty Lesson: How to extract more value from Avion Rewards
Wrapping it up
There are a plethora of rewards credit card options in Canada and making heads or tails of them can be a daunting task. Even whittled down to the 30 or so cards that tend to be written about or promoted most often, there are some in that elite group that get too much of the spotlight and can end up being a less rewarding choice for the consumer. In the words of Public Enemy, one of my favourite hip hop groups from the 80s and 90s: Don’t believe the hype.
For me, it is the BMO CashBack World Elite Mastercard, the PC World Elite Mastercard and the RBC Avion Visa Infinite Card that garner too much attention and are weaker than much of the competition. If you are considering one of these cards, please do yourself a favour and thoroughly research them along with other options before deciding on a card.
In the end I want to make sure you are getting the best card for you and I want to make sure you are earning More Miles, More Points and redeeming for More Rewards! That my friends, is the RWRDS Canada difference.
What about you? Are there any other cards that you think are overrated? Either by the online community or by way of the marketing of them by the issuers? Let us know in the comments below!
Public Enemy album cover image via Discogs.com