Canadian Credit Card Rewards Programs

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Canadian Credit Card Rewards Programs

The most important rewards card feature for Canadian consumers is the value of the rewards received from their rewards program, followed by the flexibility to convert these rewards into various alternatives (such as cash-back, travel, or experiences). Travel reward-specific benefits (such as insurance, no foreign exchange fees, point-use flexibility, and higher-end perks, such as airport lounge access) continue to be valued features in a reward card program. Digital and mobile features, associated with easily accessing rewards, are increasing in importance for Canadian rewards card users. Details associated with important reward card features are found below.

Reward Value/Points Conversion

  • The specific value of a reward is the primary feature driving reward credit card selection and usage among Canadian consumers. Ninety-percent of consumers use a credit card specifically because of the rewards it offers, with 30% favoring cash rewards, and 23% favoring rewards that can be used for air travel.
  • Consumers who assign a higher value to the reward amount for each dollar spent are more likely to recommend that credit card to other potential users, as well as spend an additional $277 more on that credit card, compared to those dissatisfied with the reward value.
CASH REWARDS
  • The top cash rewards credit cards offer a high-percentage cash back, across the largest number of categories.
  • The Scotia Momentum Visa Infinite Rewards card is consistently ranked as a top cash-back credit card in Canada, offering 4% cash back on recurring bill payments and groceries, 2% on gas and public transportation, and 1% on everything else. Their current welcome bonus offers 10% cash back on the first $2,000 spent in the first 3 months.
  • Positive reviews include, "I've had it about 5 years and I love it. Every November I get $800+ back", and, "Great card, cashback rewards are unmatched by anything. I get $600 or so back every November which easily covers the annual fee."
  • Despite the high ranking of this card across multiple credit card websites, more recent reviewers have expressed concern with the ability to have their recurring bills paid with the cash-back feature. This Scotia Momentum Visa Infinite Rewards Card user commented, "The recurring bill bonus, however, is terrible. VISA maintains a secret list of those payees it considers recurring billers, and adds and drops payees without any notice. Scotiabank has no control over or access to this list, and the only way to find out anything is to experiment with charges to see if you get 4%, or to try to have a discussion with individual payees".
TRAVEL REWARDS
  • Consistently ranked as the best card for travel, with an average user rating of 4.5/5.0, the American Express Cobalt card offers a 3.76% return on spending on North American flights. It also offers a 5% return for travel bookings, and a 10% return if the Amex Fixed Points Travel program is used.
  • Customer comments related to the reward value for the American Express Cobalt Card include, "This is the must have card right now, it is fantastic. After only 4.5 months of having this card, I am very close to having enough points for a ticket to Europe in economy. Points rack up so fast with the highest earn rate of any card out there and depending on what you do with your points you can achieve over 7% return on your spending on food".
  • American Express Gold also offers a strong points' conversion, especially if using Aeroplan or British Airways. This card has an average user rating of 4.0/5.0. A sample cardholder comment is, "love how quickly travel purchases accumulate points on this card!"

Added-Value Travel Benefits

  • Top-rated travel cards not only offer rewards for everyday purchases, offsetting the cost of travel, but also offer numerous travel-related benefits such as travel insurance, low foreign exchange fees, flexibility in using rewards for various types of travel, and additional perks, such as airport lounge access.
TRAVEL INSURANCE
  • Travel insurance offered by rewards cards is a frequently-mentioned feature among cardholders, and a key differentiating benefit cited by rewards credit card reviewers.
  • There are numerous types of travel insurance offered by reward credit card issuers, depending on the need, including baggage insurance, travel accident, trip cancellation, flight delay, emergency medical, rental car accident and theft, and hotel burglary, among others.
  • BMO Airmiles World Elite MasterCard is a highly-ranked and rated (4.0/5.0) credit card offering a vast range of types (14 out of 16) of Canadian travel insurance. A sample cardholder review, regarding the insurance coverage, is, "We had occasion to have a minor collision with a post in Kauai which we claimed through World Elite. Very happy with results and coverage was excellent and completely covered over $2000USD. No cost to us!"
NO FOREIGN EXCHANGE FEES
  • Scotiabank Gold American Express and Scotiabank Passport Infinite Visa cards come with no foreign transaction fees, offering savings for each foreign currency transaction. These features keep Scotiabank credit cards ranked highly among consumers and credit card-ranking websites.
  • This review from February 2020 highlights the recent removal of Scotiabank Gold American Express' 2.5% foreign transaction fee, providing it with a major advantage over other rewards cards. Most banks in Canada are hesitant to remove the 2.5% foreign transaction fee, as it comprises a significant portion of their income stream.
  • Given the number of Canadians who travel outside their country (70% of Canadians have a passport versus 30% of Americans), this benefit is highly relevant for travel reward cardholders in Canada.
FLEXIBILITY IN POINTS USAGE
  • Hybrid reward cards offer a combination or airline, hotel, and travel points benefits. There is flexibility in transferring points to either a hotel or airline loyalty program, redeeming points with the credit card's travel agency (which often provides better value for each point than booking with an outside agency), or booking travel outside the agency and redeeming points against the travel charge.
  • A consistently top-ranked rewards card, American Express Cobalt, offers flexible travel rewards and access to American Express' Fixed Points Travel Program. This program offers fixed points amounts for eligible air travel, regardless of the time of year. The program offers a summary of eligible routes, points, and prices, for reference.
  • This reviewer of American Express Cobalt notes that points can be worth 50-75% more when flying round trip out of Canada, using the Amex Fixed Points Travel program.
ADDITIONAL TRAVEL PERKS
  • Additional travel perks are features driving interest and usage of travel rewards cards in Canada.
  • Perks such as airport lounge access, a dedicated concierge, annual travel credits, VIP access and treatment when traveling, access to hotel perks, and elevated status at hotels and airports, are frequently-marketed benefits by reward companies, and frequently-mentioned positive perks among travel reward card users.
  • The American Express Platinum Travel card is highly-rated for its perks. A sample user comment is, "Concierge is best service period. Helps w concerts and bookings".

Digital Account Access and Features

  • In 2019, 44% of credit card holders used their credit card's website, and 29% used their mobile app, increasing over 2018 levels. Digital account access and features are an increasingly important feature for credit card reward programs among Canadian credit card holders.
  • The most requested features associated with mobile include being able to immediately stop an unauthorized transaction (61%), and having the ability to use loyalty or rewards points at the time of purchase (53%). Almost half (44%) of Canadian cardholders said they would like the ability to access all their loyalty and reward cards on their phone, though in 2018, only 7% said they had the ability to do so.

Understanding of Account Features and Benefits

  • Having a complete understanding of how a rewards card program works and its associated card benefits is very important to Canadian consumers. Credit card issuers who offer features that reflect simplicity (such as easy online navigation), and a clear description of their rewards program, will help meet this need among current and prospective Canadian reward cardholders. In 2018, only 64% of Canadian cardholders said they completely understood how to redeem rewards.
  • Customers who have a clear understanding about how to redeem their points, and what the specific benefits of their program are, are almost twice as likely to recommend their card, and far less likely to switch to another card for its benefits.
  • Top reward credit cards generally offer a clearer explanation of benefits, and make it easier for consumers to find information associated with these benefits. Consequently, the top reward card issuers have a better brand image, and are considered more customer-driven, proactive, and friendlier.

Low Finance Charges and Fees

  • Forty-four percent of respondents in 2018 said finance charges influence which card (including reward cards) they use.
  • Desjardin Visa Modulo offers a permanent 10.9% fixed rate on purchases and balance transfers (though only 1% cash back on all purchases).
  • CIBC Adventura Visa Card is another top-rated rewards card, highlighting no annual fee.

Research Strategy

To identify which credit card reward program features are most important to Canadian consumers, we began by identifying rewards-related credit card program benefits and features stated as most important from recent Canadian consumer surveys (including surveys from leading market research company, J.D. Power, and global payments company, TSYS). We then identified top reward and travel reward credit cards, as recently ranked by leading credit card authority websites, including the Points Guy, MoneySense, RewardsCanada, and Creditcardgenius, to identify common features offered by the top-ranked cards. To round out the list of stated important reward card features from surveys, we drilled into more specific benefits offered by the top reward credit cards to derive additional features that have an implied importance to Canadian consumers (i.e., common across leading reward credit cards or having their own dedicated ratings category, such as 'best travel perks' or 'best foreign exchange fees'). The reward features and benefits identified are associated with cards that are top-ranked by credit card authority websites. Many also have high average consumer satisfaction ratings (no lower than 3.5/5.0 stars, and more often 4.0/5.0 stars).
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