*disclaimer* I’m talking Canadian credit cards here. Y’all in the US and other countries have your own cards i know nothing about.
First of all, if you’re the type of person who carries a balance on their credit card paying 20% interest, stop reading right now and get some credit counselling. No rewards on any credit card will make it worth carrying a balance. Get that balance to zero before you even think of getting another card.
Ok, for those who pay their entire balance off every month, now that it’s just us, lets talk how to maximize those free incentives.
All the different offers from credit card companies can be incredibly overwhelming… how does one choose the right card?
For me it comes down to the following:
– First year free. This is essential. I like to churn my cards, rarely paying an annual fee. Also, they will typically waive the annual fee when you go to cancel. These promos are always changing so if you find a card you like, do a Google search to see if they’ve had past first year free promos and patiently wait until they offer one again.
– Maximum value for my flight rewards. Since I can be flexible, I focus more on programs with greater value than flexibility such as Aeroplan, over cards that offer a maximum reward value such as Avion, who have maximum ticket price limits.
– Travel medical, car, lost baggage, etc. insurance are an absolute must! When you get down to comparing cards you’ll notice some offer 15 days medical vs. 21 days. This could make a big difference if you enjoy longer trips. There are other subtle differences (ie. no trip cancellation with Amex Colbalt) in insurances so read the fine print if this is important to you. I still can’t believe people buy travel insurance and the extra car insurance when credit cards are handing them out for free!
– Additional insurance. I love purchase protection and extended warranty protection and it only seems to be offered with about half the cards out there. This offers an additional warranty on any purchases made up to one year AND protects from lost/stolen/broken items within 90 days of purchase. Amazing if you bring a new phone or camera traveling and are worried it will go missing!
– Exchange rate for foreign transactions. Credit cards have notoriously shit rates but there are a few that offer better rates. If you use your card a lot overseas, this should be a consideration.
– Random additional bonuses. Amex is famous for having their various promos for card holders but my favourite would have to be any card that gives me lounge passes.
I typically use Greedyrates to decide which card(s) I’m going to get. The decision is incredible individual so I cannot recommend one over the other but can give you an overview of the cards I currently have in my wallet and why:
– TD Aeroplan Visa Infinite. This is my go-to card since I am an avid Aeroplan collector. It has all the insurance I look for, a kick ass sign up bonus of 35,000 Aeroplan points if you click through Greedy Rates before June 2, 2019 and I tend to accumulate a crazy number of Aeroplan points giving me at least one or two free flights a year.
– BMO World Elite. This had a decent sign up bonus but I found the points accumulation and value to be weak. I do like the flexibility of using partial points towards flights and paying the remainder. Mostly I just keep this card around for the free lounge passes and since I bank with BMO, I don’t pay an annual fee. If they wanted to charge an annual fee, I’d be cancelling right away as after the first year bonus offer, I don’t see a huge benefit.
– Rogers mastercard with cash back on foreign exchanges. I keep this card exclusively for foreign purchases and since it has no annual fee, it doesn’t cost me to do this. The cash back pays my Rogers bill and is a much better deal than the high exchange fees charged on other credit cards.
– American Express Colbalt. I’m embarassed to admit I haven’t cancelled this card yet. As soon as I deplete the points I have accumulated, it will be gone. Typically points are worth approximately one cent and in this case, I’m better off with a cashback card at a higher rate. The $10/month fee makes it even more shameful, even though I try to tell myself the bonus points for the first year promo make it worth it, who am I kidding? It needs to go. I didn’t do my research and initially thought I could transfer the points to Aeroplan like the Amex gold (great card btw) but alas, am stuck with a bunch of points worth one cent each at best unless I convert them to hotel programs (a complicated way to maximize Amex points).
– RBC Avion. I signed up when they had a sign up bonus of 25,000 points and first year free. As soon as I realized how limiting Avion points are (maximum value for flight tickets and must book two weeks in advance) I converted my miles to BA’s Avios program (waiting until they had the additional 25% bonus promo for conversion) and cancelled this card. I keep it in my wallet as a dummy card to hand over if I’m ever robbed but it’s actually been cancelled.
Overwhelming right? If you aren’t sure which card is right for you, stick with a cashback card as cash in your pocket is better than any rewards points sitting in your account (especially since they are devalued as time passes and programs change) but do make sure whichever card you get has the additional insurance to suit your needs at the very least, and that if you do go with a points program, you are aware of how to maximize the value of these points.