Best Credit Cards for Recurring Transactions and Recurring Bills in Canada
Updated: Mar 2
One of the main expenses everyone has is recurring transactions. Things like streaming services like Netflix, software like Spotify and many more things we pay for each month.
One exciting thing about these types of transactions is that you can earn increased rewards on some credit cards.
In fact, because I also have many recurring transactions, I have optimized my cards for these transactions netting me a few hundred dollars in cashback each year and want you to make the best choice too!
In this blog, we briefly go through what makes a transaction a recurring one in the context of credit card transaction types to make sure you know which ones would be qualified for increased rewards or not and then we will rank the best credit cards for recurring transactions in Canada and discuss their pros and cons.
What recurring transactions and bills qualify for increased rewards?
When you allow a merchant to automatically deduct money from your credit card for their product or service, that would be a recurring transaction; that transaction is considered recurring when getting rewards from credit cards. There are no additional things you need to do after entering your credit card info, and things will automatically keep getting deducted from everyone until you decide to stop the payments.
A few good examples of these transactions would be:
Subscriptions
Phone, internet bill
Streaming and audio services (Spotify, Netflix, etc)
Membership (Gym memberships)
Now, some of these services might ask you to pay directly from your online banking. For example, many utilities don't take credit cards; therefore, when you pay from direct banking, you would not qualify for credit card rewards. Also, if some of these services offer you month-by-month payments manually instead of setting up automatic billing, your transaction might not qualify as a recurring transaction.
Pro tip: There's a small hack that allows you to get rewards for payments on your rent, which is a recurring transaction with the potential net cashback of a few hundred dollars per year. We discuss the details of this hack in this blog: Pay rent with a Credit Card in Canada.
Reasons to avoid paying recurring transactions and recurring bills with a credit card
When you are given the option to pay your bills (like utilities) with your credit card, it's good to check whether there are any additional fees when you choose this option.
Most companies try to choose direct payments because they have very few fees, but if they choose to accept credit cards, they must pay a fee typically between 1% and 3% to the credit card processors. Because of this in many cases they might choose to pass this fee to you which makes the transaction more expensive than direct payments.
In these cases, do the math and see whether it's worth the rewards you get in return or not.
Best Credit Cards for recurring transactions and recurring bills based on your condition
To get the best credit card for recurring transactions, we can use Finlywealth's reward calculator tool. We set all other transactions to 0 and entered a number for recurring transactions, and this would give us the best credit cards for this specific transaction category. You can also try the tool to get the best cards for your specific spending amount.
Just so you know, we are offering rebates on many credit cards, so if you want to get rebates on your application, you can apply for a rebate only from the link below:
Let's go through the results:
Best Card if you have high amounts of recurring transactions and bills (From $600/month up to $2000/month):
If you have a high amount on your recurring transactions per year, then the Scotia Momentum® Visa Infinite* Card would be the best card for your recurring transactions. The reason is simple. They have the highest reward rate in this category, which is 4%. No other card in this category comes close to this card.
One other benefit of this card is that it is a great card for your grocery purchases (4% on that category as well), which could be attractive for many.
Best cashback credit card if you have a Rogers Service (Any spending amount):
The Rogers Mastercard is a unique card because its reward rate is dependent on whether you have a qualifying Rogers, Fido, or Shaw Service card or not. If you don't have one, feel free to skip this card. But if you have that service, the Rogers Mastercard gives 2% cashback on ALL purchases! And that cashback could be redeemed for Rogers services with a 1.5x redemption rate, effectively raising the cashback rate to 3% on all purchases.
Even though the card does not have a specific category, 3% is one of the highest rates you can get on recurring transactions across many different cards that have that category. In addition, there is no limit on the cashback rate that can be earned, making this a great card for your recurring purchases.
In addition, this is one of the best credit cards in Canada in terms of reward rate, and it also has no annual fees, so having this card is great overall for your other purchases as well!
Best Credit Cards if you have small amounts of recurring transactions and recurring bills (less than $600/month) and don't have a Rogers Service:
If you have small amounts of recurring transactions, then you better go for a card with no annual fee. There are some great options to look at:
Best overall no-fee credit card for recurring purchases and Best card for recurring bill payments (such as internet bills):
If you don't travel a lot, then a great option to go for are the Tangerine cashback credit cards. The unique thing about Tangerine cards is that you get to choose bonus categories which you get an extra cashback rate and one of those categories is recurring purchases which you could choose to earn 2% on those purchases. Across the free cards (Excluding Rogers) this card has the highest cashback rate making it a great option to go for.
Tangerine has two cards. The Tangerine Money-Back Credit Card and Tangerine World Mastercard. Their reward system is identical with the only difference being that the Tangerine World Mastercard has some extra benefits like insurance on mobile, etc, but on the other hand to apply for the card you need to have at least $60000 personal income or $100000 household income. We go into great detail on their differences in the Tangerine Money-Back vs Tangerine World post.
If you are subscribed to many streaming services
If you have a lot of streaming services from this list, A flexible rewards card to earn bonus rewards on streaming services is the Scotiabank American Express® Card. You will earn two scene points for payments towards the services in that list which could be redeemed at $0.02 giving an effective cashback rate of 2% which would be the same as Tangerine.
There are a few downsides, however which are that you don't get the 2% on any other recurring purchases, and also you are gaining points instead of cash which is usually a bit more difficult to deal with.
So why even discuss this card?
One of the issues with Tangerine is that on the reward categories that are not selected only 0.5% cashback is earned which is not a lot. So, if you are looking to use a card for recurring transactions and also do other transactions with it as well, the Scotiabank American Express® Card is a good alternative. Our recommendation, however is to use the no-free cards you get only for the recurring tranasactions and get other cards that give you more value on other purchase categories.
If you travel a lot:
If you are a traveller and are open to using your points for air travel and hotels, then the American Express® Green Card is a perfect option for a travel credit card. With no annual fee, you gain 1 point per dollar spent which could be redeemed at $0.021 for travel, effectively giving you a 2.1% cashback rate which is great for a free card. The main disadvantage of the American Express card is that it might not be accepted as a payment option everywhere, so you need to check before you go for this card.
Best Credit Cards for utilities
As previously mentioned, utilities could be considered as a recurring purchase or a non-recurring purchase depending on whether you allow the payment to be taken automatically from your credit card or not.
So, if you have pre-authorized payments, then the cards that were previously discussed are your best options. But if you don't have them pre-authorized, then a card with high cashback rate is what you are looking for because that transaction could be considered as uncategorized in terms of credit card rewards. So you will need a card that gives a good rewards rate on the other categories.
The Rogers Mastercard previously mentioned is one of the best options but to find the best credit card for your specific spending rate refer to FinlyWealth's reward calculator.
FAQ
Is it better to put recurring payments/monthly payments on a credit card?
Most of the time, yes! Simply because you would miss out on credit card rewards.
But as previously mentioned, there are some cases where direct payment from the bank is available; paying with a credit card might come with some additional fees. In these cases do some calculations and see whether the rewards you get from your credit card is higher than the fees or not and then make the decision.
Will getting a new credit card stop recurring payments?
When you authorize recurring payments, you're allowing a merchant to charge your credit card number periodically for a service or subscription. If you get a new card (due to expiration, loss, or fraud), the recurring charges might initially fail because the card details have changed.
There are some exceptions to this however which is some credit card issuers participate in an account updater service which they automatically provide the merchant with your new card info. We don't recommend you to wait and see if this happens or not and if you don't want the services you are using to be interrupted, we recommend changing your credit card infos for your recurring payments proactively.
Can I ask my credit card company to stop a recurring payment?
Yes, you are allowed to contact your credit card company and stop a recurring payment.
Be advised, though, that cancelling your automatic payments does not mean that your contract with your service provider is also cancelled. If you have a contract that requires payments in the future, it's better to check with the service provider or merchant so that you don't incur penalties or future bills.
Can I pay my bills with an American Express Credit card?
It depends on whether the merchant or service provider accepts American Express or not. Because American Express usually charges merchants more than Mastercard or Visa, many choose not to accept American Express, but there are some that still continue to accept it.
You can check this yourself by going to the merchant's payment portal and see if you see American Express as a payment option or not.
Do recurring payments affect credit score?
Recurring payments themselves don't directly impact your credit score. The only indirect way they might affect your credit score is if you don't make on-time payments on those transactions which then could cause your credit score decrease but that does not relate to the recurring nature of those tranasctions.
Conclusion
There aren't that many cards that give great rewards on recurring transactions and recurring bills, but the few that do offer very decent rewards. Different cards might be suitable for you depending on the amount of recurring transactions you have in the month.
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