Travel rewards card vs Cashback card

[MacGruber]

Just wondering what CP'ers think about rewards cards. Assuming there's a zero balance (I pay off my cards balance every 2 weeks) so interest rate is meaningless to me, I'm wondering what the difference is between a travel card and a cashback card.

I would be using the money saved for flights anyways, but considering that you have to pay tax on airmiles/aeroplan/avion anyways, and combined with the fact that expedia saves you huge money booking a hotel with a flight... I guess it seems like it's not saving me a lot of money.

Thoughts?

[vtec260]

Too impatient to save up for thousands of points. I use PC Mastercard with no fee and get $20 to $60 off grocery purchase monthly. Used to have TD Travel Visa that had $100 annual fee, but the amount of benefit vs. fee wasn't worth it for me at the time.

[DownhillGoat]

I'm pretty happy with airmiles, but I don't use it for flights (for the reasons you have already stated). I've always used mine for goods, and mostly stuff I was going to buy anyways. In the last 2 years I've got a Dyson, a Keurig coffee maker, various ski lift tickets, and an autographed jersey.

The cashback cards are nice, due to it actually being cash. However I find the percentages to be so low.

The new westjet card looks pretty decent IMO. Thinking of trading the airmiles card in for that.

[MacGruber]

Does the westjet card work the same way, tho, where you have to pay taxes on flights? Those are huge.

[getbak]

There have been a couple of good threads recently on this subject. You should be able to find them using the search function.


Personally, I'm not a big fan of cards that don't give you points with a real money value, like Aeroplan or Air Miles, because you can't look at them and say "I have 20,000 points, so that's worth $200 dollars", instead it's "I have 20,000 points, so that can be exchanged for the airfare portion of a flight into a certain 'zone'".

I prefer the plans where points=$$$, so that you can actually compare apples to apples. For that reason, I'd stay away from CIBC (Aeroplan), BMO (Air Miles), and RBC (Avion). Scotiabank and TD both have travel cards where the points actually relate to cash towards travel purchases.

The thing to keep in mind there, though, is if you accumulate enough Aeroplan points in a year, you can receive upgraded perks that might make accumulating as many as possible worth it above just the points you gain (kind of like George Clooney's character in Up in the Air).

Another problem with points is you usually have to accumulate enough to make the full purchase at the time (or buy top-up points to cover what you're lacking), whereas cash back cards will give you the cash back a lot quicker. If you have to wait years before you have enough points to get anything, the points might not be worth it. I'd be leary of any card that promotes "you can get free flights starting at only 15,000 points" because that's usually something like a Calgary-Edmonton flight and you usually can't use those 15,000 points to pay for part of a trip to somewhere else.


The big difference between the travel cards that are worth real money, and the cash back cards is if you actually travel quite a lot. The travel cards usually have an annual fee, but they also provide travel insurance on purchases made on the card that you'd have to buy separately (or risk not having). Also, even though both travel cards and cash back cards may pay 1% on regular purchases, the travel cards usually have some sort of bonus for booking travel using the card that might work out in your favour when all is said and done.


Probably the best thing to do is sit down, look at your normal purchases in a month/year and figure out how many points you would have earned with the different cards you're considering. Then, figure out what the value of those points represents in real dollars.

You might find that a cash back card gives you $75 in real cash in your pocket; a points card might get you enough to get a $100 item out of their catalog; and the travel card might get you $65 off the price of a travel package, but also save you $200 in travel insurance, plus bonus points worth $20 on a future travel package. If you don't travel enough to make the perks of the travel card worth it, it might not be best for you; and if you don't like the merchandise in the catalog, the points card might not be best for you; so even though the total value of the cash back card might be lower than the potential value of the other cards, it might still be best because it's real money that you can spend however you want.

[Stranger]

I use the TD Visa. I get $100 for every $5000 spent. You get to book your own flight through any travel agent and then as long as you pay for it on your Visa, they'll just credit you back the amount you have saved. That way you can shop for your own deal and pay for the whole thing (taxes and all) with the travel points you've earned.

[Rubicant]

Originally Posted by getbak

*snip*

What he said.

I have the Scotiabank Gold Passport Visa, as well as a PC Mastercard, just because I like to have a backup card in case one gets compromised.

We put everything we can on them and pay them off each month. When we travel, the Visa has cancellation, medical, and car rental insurance which pretty much pays its annual fee in one trip. I also like that you can trade in its points for dollars towards travel - including paying for the taxes on airfare. In addition, if I book through their travel service I get an amount of cash back.

The Mastercard pays for our Christmas groceries every year. It's nice for no fee.

Anyways, you just need to do the math yourself.

[DownhillGoat]

Originally Posted by MacGruber

Does the westjet card work the same way, tho, where you have to pay taxes on flights? Those are huge.

It's been a while since I've looked at it, so take this with a grain of salt.

The westjet card puts $1 (in westjet dollars) into your westjet travel bank for every X you spend (depends on which card you get). The taxes are going to be on the flights, but the westjet dollars will cover taxes too, IIRC. It's not like you won't get charged the taxes/airport fees/$5 to grace the US with your presence, but they can be covered by the dollars you earn.

[DownhillGoat]

Originally Posted by getbak

Personally, I'm not a big fan of cards that don't give you points with a real money value, like Aeroplan or Air Miles, because you can't look at them and say "I have 20,000 points, so that's worth $200 dollars", instead it's "I have 20,000 points, so that can be exchanged for the airfare portion of a flight into a certain 'zone'".

150 airmiles is $20 in Shell gas cards. That's how I figure out a dollar value for points.

I completely agree with the last part of your post. very good way of deciding what card to get.

One other thing I'll point out, is watch the annual fees. In some cases (I'll use the westjet card example again), for an annual fee you get a card that racks up points quicker. If you opt fot the upgraded card, make sure the points/cashback/whatever is going to outpace that annual fee. If you're the type to only put a few purcahses on a card, it probably won't. If you're the type to put absolutely everything you can on your card, and not use cash or debit very often, it may be a good option.

[MacGruber]

the TD travel card sounds perfect. I can book with expedia and pay with it using points from the card. That's great.

[pylon]

RBC Avion Platinum is an awesome card. And my everyday card of choice. I find the combination of travel, and actual hard good rewards is the best.

I have that Black Capital One Aspire Mastercard, to get the 35000 sign up points or whatever it is, but I looked at the reward scale, and I don't think you get the same value for the points as you do with Avion.

I dunno, maybe I just like the RBC card more, but it is the one I always use and pay out every month.

[MacGruber]

actually after having a closer look at the TD card... when you add in the annual fee it's not a very good deal. the scotiabank momentum card gives you cashback at the same rate with a lower fee and you can cash back.

i think the fact that i only spend 800 bucks a month on my card is likely good reason to stay away from annual fees

[getbak]

MBNA has probably the best cash back card: https://www.applyonlinenow.com/CACCa...=CJB8&lc=en_CA

3% on gas and groceries. 1% on everything else. No annual fee.

[MacGruber]

Awesome possum!

[burnin_vernon]

Originally Posted by getbak

MBNA has probably the best cash back card: https://www.applyonlinenow.com/CACCa...=CJB8&lc=en_CA

3% on gas and groceries. 1% on everything else. No annual fee.

I've had this for a little over a year now. When you reach $50 in rewards, they send you a check, as opposed to the Visa I had, who would give me a credit on my card every December.

[MacGruber]

the only draw back as i see with this card is since it's not linked to my bank or any bank i could sign with, i wouldnt be able to instantl transfer funds to it

[redforever]

When you consider the travel insurance, medical insurance, car insurance, and other perks you get with an RBC Avion Platinum card, ... and the flexibility it gives you for booking travel, (flights, hotels, etc), it really is hard to beat.

You only have to travel once, and you have more than paid for any annual fee.

Edit: You can also double dip and earn Aeroplan or other program miles if you book flights with the RBC Avion Platinum card. We recently vacationed in New Zealand and used our Avion points to fly with Air New Zeland. Air NZ is a Star Alliance partner with Air Canada, so we earned Aeroplan points, while flying on Avion points. We each earned enough Aeroplan points to make a short haul trip with Air Canada.

When you fly using Avion points, you can use any airline in the world. Avion is buying you a ticket, not using a seat that was set aside for points travel. If the ticket Avion purchases for you happens to be for an Air Canada flight, or Star Alliance flight, you earn Aeroplan points. You can double dip with other air mile programs as well.

[MacGruber]

I disagree red. When you consider the tax payed, and then compare what the flight +hotel would cost on a site like expedia, you save very little money. Plus a lot of us have that type of travelling insurance and medical insurance from our employer too.

Example... airmiles has a special 40% off with gold members thru westjet to LAX, via Edmonton. 1800 air miles +200 dollars in tax. Then to book a hotel for a week in nearby San Fran on hotels.com which has 30% off would cost another 369 very minimum (no frills place). So even with air miles I'm spending 570 dollars.

on expedia.com I can book direct from here to LAx and stay in LA, no sale, no special, for around 600.

So what's the point? Maybe I'm looking at it wrong but it seems like travel cards like airmiles that make you pay tax save you zilch cuz of sits like expedia where you can book together and save.

[redforever]

Originally Posted by MacGruber

I disagree red. When you consider the tax payed, and then compare what the flight +hotel would cost on a site like expedia, you save very little money. Plus a lot of us have that type of travelling insurance and medical insurance from our employer too.

Example... airmiles has a special 40% off with gold members thru westjet to LAX, via Edmonton. 1800 air miles +200 dollars in tax. Then to book a hotel for a week in nearby San Fran on hotels.com which has 30% off would cost another 369 very minimum (no frills place). So even with air miles I'm spending 570 dollars.

on expedia.com I can book direct from here to LAx and stay in LA, no sale, no special, for around 600.

So what's the point? Maybe I'm looking at it wrong but it seems like travel cards like airmiles that make you pay tax save you zilch cuz of sits like expedia where you can book together and save.

It perhaps depends on what age demographic you are in as well. My husband is recently retired....so when we travel, we do not necessarily book all our accomodations ahead of time.

Or...we do a combo type of vacation, where we tour part of the time, travel on our own the rest of the time. When we travelled to New Zealand, our taxes in total for our flights were about $570, that was for 2 of us. We were on a tour for a bit more than 2 weeks, on our own for the other 2 weeks. We did the flights through Avion, I booked a tour on line through a Kiwi site, and I booked the rest of our travel on line as well...that was car, accomodations, some train travel and the like.

I have always found better hotel deals for the type of travel we do on booking.com rather than expedia.

[MacGruber]

aah i see. yeah, i for sure book that ahead of time. its the only way i think id ever travel... but even if i waited to book when i got there... i cant imagine finding a place cheaper than 45 bucks a night right?