Updated: 1 day ago
One of the biggest factors when deciding to get a credit card or not is the additional benefits that come with the card.
With the increased popularity of Neo credit cards, in this blog, we will discuss the benefits of Neo Credit and Neo Secured Credit and compare their benefits with other popular credit cards.
A Notable Absence:
Unlike most other credit cards in Canada, both free and paid, Neo Credit cards do not offer purchase protection and an extended warranty. This is one of the biggest downsides of the Neo credit cards.
Purchase protection is a feature offered by many credit cards that provides coverage for items purchased with the card against theft or accidental Damage for a specified period after the purchase. This benefit ensures that consumers can shop with confidence, knowing that their recent acquisitions are safeguarded against unforeseen incidents.
Extended warranty is a credit card benefit that prolongs the manufacturer's original warranty on purchased items, offering cardholders additional peace of mind. This feature means that if an item breaks down or encounters issues after the manufacturer's warranty expires, the credit card company may cover the repair or replacement costs for an extended period, typically up to an additional year.
So, When you are making a big purchase, know that your Neo Card will not cover you.
UNLESS you get the premium monthly subscription that we are going to discuss below.
Monthly Subscriptions for Customized Benefits:
Neo's unique approach allows cardholders to subscribe to specific benefits monthly.
This flexibility means you can access premium perks usually reserved for high-fee cards only when you need them, and after you are done with those perks, you can cancel them. No other credit card has the same benefit structure as Neo in Canada!
What this means is that, for example, if you are going to travel for a month, you can subscribe to the travel perks and when your travel is over, cancel it. Some of these rewards are only accessible on the paid credit cards of other financial institutions that you might need to pay over a hundred dollars for, but with this approach, you can spend only a few dollars.
There are five perks categories available that you can subscribe to. Let's see what they are and if they are worth your money or not:
At $4.99/Month, you get access to these benefits:
Boosted cashback across the network: Earn over 6% at restaurants, bars, and cafes and at least 3% at retail.
Boosted cashback on your favorite services: Earn 4% on food delivery. Ride-sharing and popular streaming services.
Cashback on gas and groceries: Get 3% off all gas and groceries up to $4000/year. Get 0.5% cashback after.
Instant cashback on every purchase: Get at least 0.5% cashback on every purchase when you pay with Neo when no active cashback offers are available.
Access to premium Features: Get more from your Neo experience
Purchase protection and doubles the term of a manufacturer's warranty up to one year.
BalanceGuard+: Cover small debts and other cash needs with $2500 of group life insurance.
This perk is probably the most important perk of a Neo credit card. By paying $4.99/Month (60/year), you will basically upgrade your card to fill in some of the gaps Neo cards have compared to other normal (Non-secured) credit cards.
Almost all credit cards in Canada have purchase protection and extended warranty, which Neo doesn't have. Also, all credit cards in Canada give a base cashback rate on ALL purchases, while Neo necessarily does not. By purchasing this perk, you increase the cashback rate earned and also get purchase protection meaning.
Whether these benefits are worth it or not needs your own calculation and how frequently you buy at Neo partners.
If you don't buy at Neo Partners frequently, the 0.5% cashback and 3% cashback on gas and groceries could be found in other free credit cards, which means if you are after these two benefits, you are better off with a credit card other than Neo.
But if you frequently buy at Neo partners, the boosted cashback at restaurants and retail could be a huge boost and will give you the most cashback out of all cashback credit cards in Canada, and you might earn back that $5 per Month in one transaction! If you want to know the list of Neo partners, here's a comprehensive list of Neo partners.
So whether this perk is good or not depends on the purchase pattern of each person. The Priority Support and BalanceGaurd are not that big of a game-changer, but they are like a cherry on top.
At $4.99/Month, you get access to these benefits:
Worldwide Lounge Access: For a nominal monthly fee, gain access to over 1,300 Priority Pass airport lounges globally.
SmartDelay: Unexpected flight delays? Get complimentary airport lounge access if your registered flight is delayed by over an hour.
Boosted Cashback: Enjoy 1.5x cashback at hotel travel partners and 2% cashback on all foreign transactions.
Comprehensive Travel Insurance: Travel with peace of mind, thanks to coverage that includes emergency medical, trip cancellation, car rental protection, and more.
These perks come at an excellent price. The ones that I think are less exciting are the Priority Pass because you have to pay for your visit, and in those cases if you travel often, a paid card with complimentary access might be better.
A note on the 2% cashback on foreign purchases is that you are basically paying 2.5% on foreign transaction fees, and out of that, 2% is returned to you (Making your foreign exchange fee equal to 0.5%). Now if you are not planning to pay massive amounts in Foreign purchases, then this is a good deal, but if that's not the case, then other cards like the home trust, brim, or Scotiabank credit cards might be a better alternative.
Now the best parts of the benefit in my eyes are the SmartDelay and comprehensive travel insurance. In Canada, flights get delayed all the time, and if this delay is over one hour, you can get free lounge access. The travel insurance is also comprehensive, with emergency travel medical, flight delay, baggage delay, car rental, and hotel burglary insurance.
In addition, you get trip cancellation and trip interruption insurance that even many paid credit cards don't have!
So if you don't want to have any paid credit cards, Neo will be a good addition to your cards because this benefit is definitely not something you want to miss.
Food & Drink Perks:
At $1.99/Month, you get access to this benefit:
Boosted Cashback: Subscribe to get 1.25x more cashback at partner restaurants, cafes, and bars and on food delivery. This perk is especially valuable if you frequently dine at Neo's partner establishments.
Probably my least favorite perk of the card. One of the main issues with Neo's reward system is that you don't get cashback on all your purchases. So that mean's that for some of your purchases, you will not receive any cashback, and 1.25 of 0 will still be 0!
Assuming one-third of the restaurants you visit are Neo partners (which is a very optimistic assumption), and you get 3% cashback, you need to spend $80 to break even, and after that, for every $80 you spend, you get an extra $2.
Suppose your ultimate goal is to save more cashback on restaurant purchases. In that case, you probably are better off going with a card that gives you more cashback on restaurant purchases, like a Simplii credit card.
Mind & Body Perks:
I would call this perk a situational perk. If you use the services listed below, the perk is a no-brainer for $9.99/month, but if you don't use any, then probably getting this benefit won't be that useful.
This perk will give you access to 1.25x more cashback on wellness services and products and free classes at some partners like Oxygen Yoga and Fitness, FinOn Pro, and Headspace Plus.
One thing that I have to mention is that there are no other credit cards in Canada that have perks like the Mind & Body perks of Neo, so this is something exclusive that you are getting access to!
Mobile & Personal Protection:
For $9.99 per month, You get access to Damage and theft protection for your mobile, $1 million dollar coverage for fraud and identity theft, and a password management tool.
The $1 million coverage is nice, but $9.99 is a steep price for the mobile and password management tool. (Especially many free cards cover mobile device insurance), so before you buy this perk, do shop around to see the prices of similar services.
Conclusion: The Neo Credit card offers a unique approach to credit card benefits, allowing users to customize their experience. While it lacks some standard protections, its array of subscription-based perks can offer significant value, especially for those who prefer flexibility in their rewards.