Updated: Aug 27
What makes a credit card in Canada rank as the best?
The best credit card in Canada should deliver the highest value to you as a consumer.
But "best" credit card Canada can be rather subjective. Afterall, there is no one size fits all.
If you're a frequent traveler looking for best travel credit cards, your needs will differ from someone who is an avid shopper or dines out a lot.
But there's one feature that everyone will want in the best credit card Canada.
Would you agree?
I know I want to earn the maximum amount of rewards possible when using my credit card for everyday purchases.
Let's dive in the top 3 best credit cards in Canada:
Best Credit Card Canada: American Express Cobalt®
This card ranks at the top simply because it has one of the best reward earning rates for every day spending. The welcome bonus combined with it's simple redemption program makes it a no-brainer!
What makes the Amex Cobalt the best credit card Canada?
You can earn 5 points per $1 of spending on dining out or groceries, 2 points per $1 of travel spending and 1 point per $1 on other types of purchases.
That's a lot of numbers...
Let's break it down in a simple example:
Let's say hypothetically, I spend $500/month on groceries and $500/month on dining out.
And that's all of my monthly spending for a whole year. A very simple structure, though not very realistic.
We can use thepointcalculator website with those numbers to find out approximately what my potential reward value would be at the end of the year.
Right away you can see the amazing reward values that can be earned from a very simple spending pattern.
$1080 can be a big flight ticket for your next trip!
Even if you're not interested in using points for travel, you could redeem them as regular cash back for $600.
...but as you can see, it would net you much less rewards in comparison.
Not convinced yet?
Here's a more accurate result which uses my own spendings:
Where did I get this result from?
I used the Finly mobile app which is able to find exactly what credit cards give me the most reward.
But why am I using Finly here?
Because the reward value shown on thepointcalculator's website is only as accurate as what you input into it. But Finly is aware of your exact spending habits so it can give a better estimate.
According to Finly, I could have earned $830 in travel value by simply using the American Express Cobalt credit card in the past year.
That's a lot of money I missed out on.
Since I don't have the time to categorize and track my monthly spending to the exact dollar amount and find which credit cards work best for me, I used Finly instead.
Is there more?
Well, in your first year, you could earn an extra 2,500 reward points per month when you spend over $500 on your card.
This bonus offer has a maximum of 30,000 points. That's almost $300 of value in bonus rewards besides the regular rewards you earn throughout the year.
In addition, this credit card has no specified minimum income requirement for approval.
And to top it all up, this card comes with great travel insurance coverage and is one of the best travel credit cards in Canada.
So would you also agree that the Amex Cobalt is the best credit card in Canada?
Now of course, no credit card is made to be perfect.
What are the cons of the Amex Cobalt card?
1. The Amex Cobalt credit card comes with a hefty $155.88 annual fee.
Though it may seem like a lot, the rewards will usually cover the fee and more assuming you spend a few thousands per year.
2. Some retailers like Costco and Loblaws still do not accept Amex.
However, overtime more places have come to accept Amex for credit card payments.
It's just a matter of time before Amex is widely accepted everywhere.
3. Your credit score should be in the Good/Excellent range in order receive approval.
If you're not sure what your credit score is, you can try creditKarma which I personally use.
You can also read about how you can check your credit score in the official Equifax website.
If you know your credit score, you can compare it to the average credit score in Canada for reference but generally you need to be in the range of 660-900.
2. Simplii Financial™ Cash Back Visa* Card
The Simplii Financial credit card is made simple! It is perfect for those who may not be big spenders but still want to earn very high rewards like 4% cash back in restaurants and bars, or 1.5% on gas and grocery purchases.
Why should I get the Simplii Financial card?
1. This card comes with:
4% cash back on restaurants and bars
1.5% cash back on gas, groceries and bill payments
0.5% cash back on all other types of purchases.
If you're someone who's largest spending is on dining out and from time to time on groceries, this card can easily save you $250-300 per year.
In this example, I used hypothetical numbers to represent my monthly spendings and see my estimated yearly reward.
And if you're not sure exactly how much you could earn by using this credit card, you could use Finly for a more accurate estimate.
I could have earned $275 in cash back by using the Simplii Financial credit card in the past year.
And guess what, that's almost exactly how much cash back I earned last year (shown in the image below) which was automatically applied to my credit card.
But ofcourse this can't beat the $830 reward potential I can get from the Amex Cobalt credit card, which is the best credit card in Canada.
At least I got this card for free, so even if I didn't spend much every month, I wouldn't have gotten penalized for it by paying a monthly fee.
2. Free global money transfer
A rare but valuable perk this card comes with is free international money transfer.
This is particularly useful if you have friends or family abroad that you send money to and want to avoid the fees.
3. The minimum income requirement for this credit card is only $15,000/year.
The low income requirement makes this card much easier to get approval.
4. This card has an annual fee of $0.
If you're serious about avoiding credit card fees, there are many credit cards that offer perks like very low cash advance fees or $0 foreign transaction fees.
With the fantastic reward rate and no annual fees, it's hard to say no to this card.
What are the cons of the Simplii Financial card?
1. You only get cash back once a year
That's right. The cash back is automatically applied to your card once a year in January.
It's not necessarily the worst thing. For example it can help offset some of your holiday spending.
However, for those who'd like to have flexibility over their cash back redemption, this may not work well for them.
But you never know, maybe Simplii will change this policy in the future if enough customers ask for it.
2. Low base reward rate
Simplii has a base rate of 0.5% cash back which is applied for categories outside of food, groceries and bill payments.
In addition, when you exceed the spending limits on the high cash back categories like food and groceries, your cash back rate automatically switches to the low 0.5% base rate for those purchases.
Essentially this happens when you exceed $5000 in spending for food, and $15,000 for gas/groceries.
So if the limit is reached at some point in mid year like in July, you will need to wait until January of next year to earn 4% on food and 1.5% on groceries again.
So what's the solution?
In this scenario, I'd recommend having another credit card at the same time to try to maximize your cash back returns.
As a fairly similar credit card, you could use the Tangerine Money-Back credit card which lets you pick categories for which you can earn 2% cash back on, without any limits.
2% cash back on any category is 4 times higher than the 0.5% you'd be earning from Simplii's base rate.
3. SimplyCash® Preferred Card from American Express
Reward points are great but many people prefer the simplicity of earning cash on their purchases. You know how we said we're looking for the highest rewards on every day purchases? This card will give you the best cash back on your grocery and gas purchases.
Why should I get the SimplyCash® Preferred Card?
1. Very high cash back rates
You get 4% on your groceries and gas purchases.
2% cash back on everything else. With no limits!
That's a lot of cash back on simple every day purchases.
With surge in prices, who wouldn't want to save more every month?
And best of all, the 2% cash back base rate has no limits.
2. No annual income requirement for approval
You don't need to be earning a high income to qualify for this credit card.
3. Mobile device insurance
Are you unsure whether to buy apple care or not while shopping for a new iPhone?
Same goes for Samsung Care+ when getting a new Samsung phone.
Are you worried about getting your phone stolen, damaging or losing it?
The SimplyCash® Preferred credit card will cover your phone for up to $1000 per insured person in the event of loss, accidental damage or theft, anywhere in the world.
...and the protection lasts for 2 years from the date of your purchase!
4. Extensive travel insurance coverage
Even if you're not a frequent traveler, this will help you save a ton of money on the occasion that you do travel.
Whether you go on road trips or book flights, you get a pretty nice coverage. Let's take a look:
Out of province/country emergency medical insurance up to $5,000,000
Flight delay and baggage delay insurance up to $500 coverage
Lost or stolen baggage insurance up to $500
Up to $500 coverage against loss of personal items in hotels
Up to $100,000 coverage for accidental death and dismemberment during travel
What are the cons of the SimplyCash® Preferred Card?
1. A monthly fee of $9.99, or $120 per year
Okay but is that a high fee for the amount of cash back you can earn?
You can cover that monthly fee by simply spending $250 on groceries or gas since the 4% rate on the $250 spend earn will earn you the $9.99.
Here's a simple chart that shows a hypothetical spending pattern for one person:
Imagine you spend $125 on gas, $300 on groceries, $100 in restaurants and $150 on bills per month.
With the cash back rates of 4% on gas/groceries, and 2% everything else, you will end up with $22 in cash back per month.
That's easily more than double the monthly fee of the credit card.
But it also means you end up with $11 in net cash back since you paid $10 in fees.
Is that worth it to you?
If you're unsure exactly how much in rewards you could be earning from the Amex Preferred cash back credit card, you can see an accurate estimate for you on Finly.
2. The 4% cash back rate on groceries and gas maxes out at $1,200
After you reach $1,200 in cash back rewards, the reward rate on groceries and gas goes down to the base 2% rate.
But that takes a very large monthly spending to reach that limit.
For example, to reach that limit, you need to spend $500 on gas and $2,000 on groceries per month just to reach the $1,200 yearly cash back limit.
3. Similar to the Amex Cobalt credit card, some retailers like Costco and Loblaws still do not accept Amex
4. Cash back is only redeemable once per year
That means it won't be always available to redeem, similar to the Simplii Financial credit card.
Everyone has different spending habits and lifestyle, making it difficult to know what credit card works best for everyone.
But if you're really curious about exactly what credit cards work best for your specific needs, try the Finly app and see for yourself.
Generally speaking, I think we can agree that the Amex Cobalt credit card is definitely worth the annual fees and can be considered as the best credit card in Canada.
I've tried to find other credit cards that could earn me even higher rewards but so far haven't been successful.
The Simplii Financial cash back credit card will give you fantastic cash back on dining out in restaurant and bars for no annual fees.
And if you have a large family and spend a lot of money on groceries and gas, the Amex simplyCash Preferred credit card will likely give you the highest cash back return.
At least for me, I'm definitely going to apply for the Amex Cobalt credit card and use it every day.
How about you?
Like this post and let me know in the comments if you found it helpful.