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4 Steps to Choosing the Best Cash Back Credit Card


Published March 28, 2024 • 4 Min Read

Cash back credit cards are a popular option for Canadians. And for good reason. You get paid for spending money you were going to spend anyway when you spend on your card. Find out how to choose the best cash back credit card in 4 easy steps.

There’s a variety of cash back cards available to Canadians today. As you explore your options, it’s worth looking at how different cash back programs are structured as well as the perks and fine print that come with each card.

Here are 4 steps to take when seeking the best cash back card for you.

1. Understand the types of cash back cards out there

There are three main types of cash back credit cards:

  • Fixed-rate cash back credit cards

  • Tiered rate cash back credit cards

  • Rotating category cash back credit cards

Fixed-rate cards are the simplest and easiest to understand. You earn cash back on every purchase, all at the same rate.

Tiered rate cash back cards offer a higher cash back rate on some purchases. The most common categories include gas, groceries, dining and travel purchases.

With rotating category cards, the categories for earning this higher rate can change. This makes them less predictable for the cardholder. The flip side is that these cards may offer the highest cash back rate on some purchases.

2. Decide what’s most important to you in a cash back card

Different cash back cards appeal to different people. Here are some factors to consider and prioritize as you review your card options.

  • Simplicity. As mentioned above, some people are looking for a simple, easy-to-follow program they don’t need to think about.

  • Cash Payout. Earning as much cash back as possible may be your priority. In this case, you’ll want to choose a card that matches your spending habits and has a high earn rate to maximize the cash you get back.

  • Sign Up Bonus. Some cards have a bonus offer when you sign up. For instance, you might earn $200 in cash back after you spend your first $500 on your card. Or, your offer could be a cash back match.  See what’s available and what appeals to you.

  • How You Get Paid. Most Canadian cash back credit cards provide a statement credit for the cash back you earn. There may also be the option to get a deposit into your bank account or a mailed cheque.  Check, too, how often you get paid and if there is flexibility to receive your cash outside the typical window. 

3. Check the fine print

Cash back credit cards can offer great value and benefits for the cardholder. But as with anything, it’s important to look at the fine print to make sure you’re getting exactly what you expect out of your card. You may want to watch out for the following things: 

  • Some programs require you to accumulate a certain amount of cash back before you can redeem it. If you spend with your card regularly, this may not be an issue. But if you’re not a big spender, this minimum may not make sense for you.

  • Some cards have a cap on the amount of cash back you can earn. Make sure you’re aware of any maximum payout so you’re not surprised. Look for cards with unlimited cash back.

  • If you’re looking at a tiered cash back card, check that you can still earn cash back on other purchases. Some cards only offer cash back on certain categories. Ideally, you’ll want a card that earns you cash back no matter what you’re spending on.

  • In some cases, you can’t earn cash back on purchases made through your digital wallet. If you tend to use your phone to pay regularly, be sure to check for this clause. 

4. See if there are other perks

Some cash back cards offer more than just cash back. Cards that offer insurance coverage, special offers and valuable savings can give you extra value. You might as well have a card that’s working hard for you!

Find the right cash back credit card

Compare our cash back credit cards and select the best one for your needs.

Cash Back Calculator

With a range of cash back credit cards, you can find one that matches your shopping style and spending habits. Let RBC help you choose the cash back card that’s right for you, or compare cash back cards to find the best fit. You can also check out this nifty tool that can help you figure out how much cash back you can earn based on your spending habits. Try it out today!  

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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