25 Best Rewards Credit Cards in Canada for 2023

How rewards credit cards work in Canada

By Barry Choi and Shannon Terrell

With so many choices out there, selecting a rewards credit card can quickly become overwhelming.

Do you go for a credit card that rewards you for shopping at a particular store, a card that has accelerated earn rates on a category that fits your lifestyle, a card that has flexible redemption options, or something else?

Knowing how rewards work before and after you apply for a rewards credit card can help you decide.

What is a rewards credit card?

With rewards credit cards, you can earn points or miles on just about every purchase you make. The type of rewards you get depends on the credit card you have. Additionally, how you can use your rewards depends on the loyalty program set up by the issuer.

What makes rewards credit cards appealing is the idea that everyday purchases could be transformed into something you really want, like tickets to a concert or a free first-class flight.

How rewards credit cards work

As far as usage is concerned, rewards credit cards are similar to any other credit card. You charge your purchases, and then you get your statement when your monthly billing period is up. It is especially important to pay off your balance with rewards cards because interest charges can erode the rewards you earn.

In other words, as long as you’re on top of your bills, you can earn some sweet rewards without doing anything extra.

Types of rewards credit cards

There are dozens of rewards cards out there, but generally speaking, you can break them down into five different categories. Knowing what’s typically included within each category is essential since it’ll help you determine what card is best for you.

Flexible-points credit cards

Most major financial institutions have a general rewards credit card. The points you earn can typically be redeemed for a variety of lifestyle rewards, such as entertainment, merchandise, gift cards or financial rewards, as well as travel purchases.

Unlike travel rewards cards, general rewards credit cards might not offer the same travel perks and benefits expected by frequent travellers, such as comprehensive travel insurance or free airport lounge visits. But, foregoing these perks often means a lower annual fee.

Airline rewards credit cards

Airline credit cards allow you to earn points or miles for a specific airline. What’s interesting about airline credit cards is that the points you earn can usually be used on any airline that’s part of its network.

For example, Aeroplan is the loyalty program for Air Canada. Even if you don’t have one of the best Aeroplan credit cards, or you can use your points for a flight on any carrier that’s part of the Star Alliance network. There are also some general travel rewards programs, such as Air Miles, that also earn miles and can offer some additional value.

Depending on the tier of your airline rewards credit card, you may get additional perks such as free checked bags, priority boarding and increased status. Having an airline credit card is highly lucrative if you frequently fly with one airline or network.

Hotel rewards credit cards

While some people love the idea of free flights, getting a luxury stay at a nice hotel appeals to other people. Some would argue that hotel rewards are better than airline rewards since some hotel chains have a greater reach. For example, Marriott has over 7,000 properties in 130+ countries, so no matter where you’re travelling, it won’t be hard to find a room where you can use your points.

Hotel rewards credit cards will also typically include benefits that will make your stay more comfortable. For instance, you could get early check-in and late check-out. You could also get free high speed Wi-Fi or enhanced status.

Travel rewards credit cards

If you’re not loyal to one specific airline or hotel chain, then a general travel rewards program is something that will interest you. The points you earn can typically be used for any type of travel redemption, such as airfare, hotels, car rentals, cruises, and even vacation packages. Since your points don’t belong to one specific program, you have more options.

Some travel credit cards only allow you to use your points when booking travel through their online portal, while others let you use your points for any travel purchases you charge to your card.

Store or brand rewards credit cards

Many major retailers have their own loyalty programs and some even have a co-branded credit card. If you were to sign up for their store credit card, you would usually earn more points on in-store and online purchases.

Admittedly, the overall rewards you earn with a store credit card may not be as lucrative compared to travel rewards, but they can still be valuable. For example, many store cards offer an immediate bonus when you apply. You may also get an immediate welcome bonus when you apply, such as 15% off on first-day purchases. Plus, most store credit cards don’t have an annual fee, so one could make sense if you frequently shop at the same store.

Gas rewards credit cards

If you’re often on the road, you may want to consider a gas rewards credit card. These cards offer points or cash back rewards whenever you spend money to top up your tank at a gas station. Some gas rewards cards offer accelerated earnings when you spend money on fuel — any time, anywhere. Other rewards cards only let you earn points when you visit eligible gas station chains.

Popular credit card rewards programs in Canada

Credit card rewards programs are very appealing, but with so many different ones available, it’s important to understand how each loyalty program generally works before choosing a card. You don’t need to know the ins and outs of every program, but you do want to have a general idea of what they can do for you and how you could use your points.

Here’s a breakdown of some of the most popular rewards and loyalty programs in Canada:

Air Miles rewards

With nearly 10 million active Air Miles accounts in Canada, there’s a decent chance you’re already familiar with the Air Miles rewards program. Members collect Air Miles rewards — also called Rewards Miles — by making purchases at partner retailers using an Air Miles credit card. Rewards Miles can be redeemed for free flight tickets, cruise tickets, hotel stays, merchandise and more.

Aeroplan rewards

Aeroplan is a travel rewards loyalty program run by Air Canada, Canada’s largest airline.

Aeroplan points can be earned by signing up for an Aeroplan credit card; flying with Air Canada or any of its partner airlines, including Air India, Lufthansa and United; or booking qualifying hotel stays, car rentals and in-store purchases with Aeroplan’s brand partners, like Avis, Home Hardware and Sephora.

Like Air Miles rewards, Aeroplan points can be redeemed for flight tickets, hotel stays, gift cards and more.

PC Optimum rewards

The PC Optimum loyalty rewards program is owned and operated by Loblaws, a Canadian retail conglomerate. Members earn points each time they make qualifying purchases at eligible stores, including Loblaws, Real Canadian Superstore, No Frills and Shoppers Drug Mart. Members can also earn points when purchasing fuel at Mobil and Esso gas stations.

The PC Optimum points system is straightforward: every 10,000 points is worth $10 and can be applied to in-store purchases at partner stores. There’s even a PC Optimum mobile app to help you track points and special weekly offers.

American Express Membership rewards

AmEx carriers, this one’s for you: the American Express Membership rewards program is only available to — you guessed it — American Express cardholders. The program offers points every time you swipe your card on an eligible purchase. Points can be redeemed for travel experiences, merchandise, gift cards — you can even use your points to pay for Amazon purchases.

Petro-Points rewards

The Petro-Points rewards program offers points for visiting Petro-Canada gas stations. The system is straightforward enough: pump 1L of gas or spend $1 in-store — earn 10 Petro-Points. Points can be redeemed for fuel, car washes, in-store purchases or online gift cards.

Petro-Canada doesn’t issue its own credit cards but some RBC credit cards offer accelerated Petro-Point earn rates.

SCENE Rewards

If you’ve visited a Cineplex theatre in the last decade, you’ve likely heard of SCENE points. What started out as a rewards program for Cineplex ticket purchases and concession stand spending has since evolved into a robust points system with numerous ways to earn and redeem, called Scene+. This new points system is the offspring of the Cineplex SCENE program and Scotia Rewards, Scotiabank’s credit card rewards program.

You can still earn Scene+ points when you visit a Cineplex theatre, but you can also earn points when you visit Playdium, eat at partnered restaurants, shop with partnered retailers — even book travel excursions through Scene+ Travel. Earn accelerated Scene+ points with the Scotiabank SCENE Visa credit card.

Does the card network matter? Visa vs. Mastercard vs American Express

Credit card companies, commonly referred to as issuers, are the banks, credit unions and other financial providers through which you might apply for a credit card. There are dozens of credit card issuers in Canada.

Credit card networks, on the other hand, provide the technology and infrastructure that makes credit card transactions possible — and effortless — almost anywhere in the world. Canada has only three credit card networks: Visa, Mastercard and American Express.

The network to which your rewards credit card belongs may affect how widely the card is accepted, processing costs and cardholder benefits. Generally, however, all three of the major networks offer attractive reward card options in Canada.

Using credit card rewards

When choosing a rewards credit card, it’s important to understand the rate at which you will earn points and what options you have for redeeming them.

How rewards credit cards earn perks

The earn rate on a rewards credit card is the number of rewards points or miles you earn on each dollar spent.

Some cards offer a flat rate, meaning you earn the same rewards on every purchase. For example, you may earn 2 points for every $1 you spend with your card.

Most rewards credit cards have a tiered rewards structure when making purchases. The type of structure can vary quite a bit between cards. For example, you may have an accelerated earn rate on purchases made in certain categories, such as travel, groceries, gas and drugstores, or at stores that belong to a certain brand family. All other purchases will use the lower base earn rate.

Ideally, you want to choose a credit card with an accelerated earn rate that is aligned with your spending habits.

How to calculate the value of credit card rewards

Knowing how to calculate the value of your points or miles is essential since not every redemption value is the same. By establishing a baseline value for your points, you can decide if specific redemptions are worth it — even if you’re not getting the maximum value.

The formula used to determine the value of one point is as follows:

Cash value of the redemption x 100 / number of points required = Cost per point

This formula can be applied to any redemption regardless of the loyalty program. For example, let’s say you want to redeem 13,400 points for a $100 gift card. Your formula would be the following:

$100 x 100 / 13,400 = .75 cents per point

Do rewards points ever expire?

It doesn’t matter how long you’ve been a member of a loyalty program or how many points you’ve accumulated; you can lose everything if you’re not paying attention.

Generally speaking, most loyalty programs that belong to an airline or hotel have a defined expiry date of 12 – 18 months. However, that only applies if there’s been no account activity in your account during that time. Your clock would reset if you earn or redeem just one point during that time. Even if you’re not travelling anytime soon, you could make a small redemption or donate some points to ensure you don’t lose the rest of your points.

When it comes to bank credit card rewards programs, it’s unlikely your points will expire as long as your credit card account is in good standing. Your account would only fall out of good standing if it becomes delinquent or your credit card is used for fraudulent activity.

How to redeem credit card rewards

Rewards programs offered through a bank typically have their own website where you can make redemptions. They’ll usually have separate tabs where you can choose from travel, gift cards, merchandise, and financial rewards. While this can be handy, you’re typically limited to their offerings. For example, you wouldn’t be able to book an Airbnb via their site.

That said, some general rewards programs allow you to redeem travel purchases that weren’t made through the bank’s website as long as you charge it to your credit card.

Redeeming store rewards points

Store rewards points are typically redeemable only in-store or online. When you’re checking out, have the cashier scan your loyalty card. You’ll then be able to redeem as many points as you like. If you’re making an online purchase, you’ll need to log in first. Then, when you’re paying, there should be an option to redeem your points.

Rewards credit card terms and conditions

Like all credit cards, rewards credit cards generally have a set of terms and conditions to which you must agree in order to become a cardholder. Terms and conditions specific to your credit card issuer, as well as each type of rewards card they offer, should be available online. You will also likely receive a written copy of the terms and conditions when you receive your physical card in the mail.

Common terms and conditions include:

• The rights of your card issuer under the agreement.
• Your rights under the agreement.
• How you earn points.
• Rewards categories.
• How you can use your points.
• How to transfer your points.
• Under what circumstances you might lose your points.
• When your reward points might expire.

How to pick the right rewards credit card

Every rewards credit card is good for at least one thing, so deciding on which card is best for you can be difficult. Here are some important criteria to compare and consider:

Type of rewards

Think about your short and long-term goals. For example, if you’re planning a honeymoon and want to have an epic trip, then getting a travel rewards credit card to earn a free flight might be the right thing to do. Alternatively, let’s say you want to save money on your grocery bills. Then getting a credit card with grocery rewards or a co-branded store credit card to earn discounts and in-store credit might be a better choice.

Welcome bonus

If you’re trying to decide between several cards with similar rewards, the tiebreaker can often be the sign-up bonus. Some credit cards offer a generous intro offer that is more than the annual fee or jumpstarts your earning with thousands of free points or miles.

Interest rate

When comparing rewards cards, be sure to take a look at the interest rate — and there may be more than one:

• Promotional interest rate. Some cards offer promotional or introductory interest rates that stay in effect for a set period of time — typically six to 18 months. These rates tend to be lower than the regular rate that applies once the introductory period is over. Some cards even offer 0% introductory interest rates.

• Purchase interest rate. This rate determines how much interest you’ll owe on any outstanding balance, which is especially important if you don’t always pay off your credit card in full.

• Cash advance interest rate. If you withdraw cash from an ATM using your credit card, that transaction may be subject to a different interest rate than the one applied to regular purchases. This interest rate, also called a cash advance rate, may be higher than your purchase interest rate and may also be accompanied by a flat-rate transaction fee.
• Balance transfer interest rate. Transferring an existing balance from one credit card to another may call your balance transfer interest rate into effect: an interest rate that only applies to funds relocated from another credit card.

Earn rate

Every credit card has a base earn rate, but just about all of the best rewards credit cards in Canada have an increased earn rate for specific bonus categories. For store rewards cards, you’ll usually get an increased earn rate on in-store and online purchases. However, if you have a general rewards credit card, you could earn extra points on categories such as groceries, gas, pharmacies and more. The earn rate is essential since choosing a card that lines up with your spending can quickly increase the number of points or miles you earn.

Annual fee

If you’re firmly against the idea of paying an annual fee for your credit card, you’ll instantly narrow down your choices. That said, rewards credit cards that have an annual fee typically come with more benefits that could be worth more than that yearly fee.

Reward flexibility

Having a lot of points is meaningless if it’s hard to redeem them. Look for a loyalty or rewards program where you know you’ll be able to use your points without much trouble. What you’re looking for are programs where there are no blackout dates and many different redemptions options. You’ll also want to consider if the program has any transfer partners, as that’s another way to use your points. Additionally, knowing if and when your points expire is key to making sure you don’t lose your hard-earned rewards.

Additional benefits of reward credit cards

Besides the main categories covered by general rewards credit cards, consider the additional perks that are included. These extra perks can often be the thing that helps you choose one card over another.

Consider the following benefits that often come with rewards credit cards:

• Rental car discounts and insurance. Certain cards will earn you cheaper rates on rental cars — even internationally — as well as some insurance coverage.
• Security features. It’s becoming more common for rewards cards to offer things like identity theft protection, the ability to lock your card, or block foreign and online transactions, via a mobile app.
• Mobile device insurance. In recent years, mobile device insurance has become a popular benefit. Basically, if your mobile device, including your wireless phone and tablet, is damaged, lost or stolen, you can make a claim.
• Roadside assistance. This perk can help you out if you ever run into car troubles. Be sure to read the details of your roadside assistance plan, as the process of making a claim can be very specific.
• Extended warranty. Many credit cards will lengthen your warranty up to one additional year as long as you charge the full cost of the purchase to your card.
• Price protection. If you find a lower price after making a purchase, some credit cards will give you back the difference as long as it falls within a specific time period.
• Concierge service. A credit card concierge can help you with basic tasks such as booking travel, ordering fits and securing event tickets.
• Airport lounge access. Some credit cards include airport lounge access, plus free annual lounge passes. These benefits could easily have a value of over $300, so it can offset any annual fee you might pay.
• Travel insurance. Depending on the credit card, an extensive travel insurance package could be included. This could cover things such as medical expenses, trip cancellation, lost luggage, and more.
• No foreign transaction fees. Many credit cards charge a 2.5% fee when you make a purchase in any currency that’s not Canadian dollars. If your card has no foreign transaction fees, then you’re just paying the straight exchange rate.

As you can see, the list of additional benefits you can get with your rewards credit cards can be pretty extensive. Always prioritize the perks that are important to you when applying for a card.

How to get a rewards credit card

Eligibility criteria for rewards credit cards are fairly standard: you need to be a Canadian resident and you need to be the age of majority in the province or territory where you live.

Outside this, there may be credit score and annual income threshold minimums to consider, but these vary by card.

When you apply for a rewards credit card, there’s no guarantee you’ll be approved. The credit card provider needs to assess your financial profile to determine if you’re creditworthy. The application process will typically look something like this:

Steps to apply for a rewards credit card

1. Fill out an application. This can be done online or at your financial institution. The application will ask for some basic information, such as your name, date of birth, address, social insurance number, employer and income.
2. Your information is checked. The credit card issuer will check your credit history and verify the information that you provided.
3. A decision is made. If you apply online, instant approval (or disapproval) is possible, but there’s also a chance the credit card issuer will ask you to contact them to provide additional information.
4. Your card is mailed out. Your credit card will immediately be mailed out and will typically arrive within 14 business days.
5. Activate your card. Once your card arrives, you’ll need to activate it by logging into your account or calling the number on your card. Once activated, you can use your card to make purchases.

Should you have multiple rewards credit cards?

The number of credit cards you should have ultimately comes down to your financial health, spending habits and goals.

Different rewards credit cards offer bonus or accelerated earn rates for different categories of spending. Likewise, cards vary in the types of reward they can deliver.

In some cases, it can make sense to have a rewards card that helps you capitalize on your biggest areas of spending, like one card that earns significant travel rewards and another that earns bonus points at the grocery stores.

However, multiple credit cards represent multiple opportunities for accumulating high-interest debt, so make sure you’re confident in your ability to pay the bills in full regularly. And keep in mind that each credit card application can result in a hard inquiry on your credit report, temporarily reducing your credit score.

Is a rewards credit cards worth it?

Everyone sees a different value in rewards credit cards. What works for you may not necessarily be suitable for someone else. Generally speaking, a rewards credit card is worth it in the following scenarios:

Reasons a rewards credit card might be worth it

• No annual fee. Many credit cards with no yearly fee still come with a few benefits.
• Rewards align with your spending. If you shop at a specific store regularly or find that a lot of your budget goes toward groceries, a card that rewards you for those behaviours is often worth it.
• You have a goal in mind. Having a specific redemption in mind is essential since you can then apply for rewards credit cards to help you reach that goal.
• Good welcome bonus. Sign-up bonuses and intro offers that are given to new applicants are often worth hundreds of dollars.
• You’re looking to save money. The points you earn from a store rewards credit card can reduce the cost of your purchases.
• You want a specific benefit. If the credit card comes with a benefit you want, such as no foreign transaction fees or roadside assistance, it could be reason enough to sign up.

Reasons a rewards credit card might not be worth it

Even though the positives are compelling, situations, where it may not be worth getting a rewards credit card, include:

• You typically carry a balance. No amount of rewards is worth it if you’re paying interest.
• You’re worried about your spending. Some people will spend more when they have access to a credit card.
• You can’t meet the requirements. Most rewards credit cards require applicants to have a good credit score, meet certain income requirements and be the right age. If you aren’t eligible, consider a more suitable option.
• You’re not getting value out of the annual fee. You may want to get a no-fee card if you’re not using any of your included benefits.
• You prefer something simple. Even though redeeming rewards can be easy, it still takes some planning. If you like simplicity, going with a cash-back card may be better.

How to make the most of your rewards credit card

If you’ve decided that a rewards credit card is for you, you can follow a few tips to ensure you get the most out of your card.

• Always pay your bill in full and on time, so you don’t pay any interest.
• Make sure you meet the minimum spending requirement to get your welcome bonus.
• Pay attention to your earn rate and use your rewards card on purchases that earn extra points.
• Research your rewards program so you know what you can do with your points or miles.
• Always calculate the value of your points before making a redemption.
• See if your loyalty program has a partner network where you can earn additional points.

Although choosing a rewards credit card may require you to do some research, the value you get is often worth it. Getting free stuff on points feels great, especially if it’s something you’ve been saving a long time for.

Other types of credit cards to consider

Although cash-back cards are easy to understand, they aren’t always one of Canada’s best credit cards. Depending on your situation, you may want to consider one of the following types of credit cards instead.

• Travel rewards credit card. For those who want to use their rewards for travel.
• No-fee credit card. A credit card that doesn’t charge an annual or monthly fee.
• Student credit card. A smart choice for university students who are building credit.
• Cash-back credit card. A card that earns a percentage of what you spend back in cash.

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