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MBNA Worldpoints Mastercard Review





A little while ago, MBNA launched a new “WorldPoints” series of cards to replace their Travel Rewards Elite card, which in turn was a replacement for the discontinued SPG card. The WorldPoints program is different between the U.S. and Canada, because MBNA sold their Canadian credit card division to TD, and their American cards to Bank of America. This review will focus on the Canadian program.

Currently, there are 3 WorldPoints cards: a no-fee student version, a standard no-fee card, and a “World” card which doubles the rewards for an annual fee of $89. What makes this third one special is that it’s the only credit card since the Amex Gold card to offer a 2% non-tiered pure cash-back reward.

MBNA Studentawards WorldPoints

  • No annual fee
  • Earn 1 WorldPoint per dollar spent (worth $0.01)
  • 1000 points signup bonus ($10)
  • 1000 anniversary points ($10)
  • $35K annual household income required (unless you are a student)
  • You do not need to be a student to apply for this card
  • Platinum level insurance benefits (even though it’s a blue-coloured card, an MBNA rep said it is platinum)
    • Common Carrier Accident insurance: $1,000,000
    • Trip Interruption Insurance: $2,000 for return home in case of death of immediate relative
    • Rental Car Collision Damage Waiver
    • Rental Car Personal Effects Benefit: protects against loss, theft or damage to personal effects for the duration of vehicle rental
    • Purchase Protection: 90 days insurance against theft or damage on most purchases
    • Extended Warranty: double manufacturer’s warranty for up to 1 additional year

MBNA WorldPoints

  • No annual fee
  • Earn 1 WorldPoint per dollar spent (worth $0.01)
  • 1000 points signup bonus ($10)
  • No anniversary points
  • $35K annual household income required
  • Platinum insurance benefits (same as above)

MBNA WorldPoints World

  • $89 annual fee
  • Earn 2 WorldPoints per dollar spent ($0.02)
  • 10,000 points signup bonus ($100)
  • No anniversary points
  • $120K annual household income or $70K personal income required
  • World level insurance includes all platinum benefits plus Price Protection:
    • find a lower advertised price in Canada, excluding online prices, within 60 days after purchase, and get the difference refunded. Min $10 and max $100 per purchase, and max $500 per year. Excludes cell phones, electronic devices, computer hardware/software, tickets, perishables, motorized vehicles, and more.

Redemption Options

  • Redeem 5000 points for $50 cash-back. Your choice of: statement credit, electronic deposit to a bank account, or cheque
  • Donate to charity: Canadian Cancer Society, United Way of Canada, or the Children’s Wish Foundation. Donations over 2500 points ($25) will get a tax receipt issued in July or December
  • Redeem for travel booked through their rewards center, at a rate of 100 points per dollar. Includes flights, hotels, cruises, packages, and car rentals. Redeeming for a portion of the travel cost is allowed. Note that they are unable to book any non-commission travel, including net rates, time-shares, or travel offered by independent travel suppliers. They will not price match against other travel providers. There is a $25 booking fee if redeeming less than 10,000 points for travel.
  • Redeem for merchandise and gift certificates from the rewards catalog. The gift certificates appear to range from 5800 – 6100 points for a $50 card, which is a lower return than cash-back or travel.
  • 500 point bonus for the first non-cash online redemption (8 – 10 week delay)

Except for the bonus (worth a mere $5), there really is no reason to ever redeem for anything other than cash-back. Since the gift certificates cost more than 500 extra points vs cash-back, and the travel seems too restrictive, the best way to get the bonus is probably by donating to charity.

Converting from Travel Rewards Elite card

Back in November 2011, everyone who held a Travel Rewards Elite card should have received a letter in the mail advising them to call and convert their card over to the new WorldPoints card. Depending on their annual spending, they were either offered the standard “WorldPoints” or the “Worldpoints World” card, with NO FEE! If you were among these lucky folks, you probably upgraded and are now using the WorldPoints World 2% cash-back card without paying any annual fees! If you were only offered the standard card, you might have some success by calling MBNA and asking if they will upgrade you to the World version while maintaining your “grandfathered” no-fee status.

Note: A few people have called to try and get their SmartCash upgraded to Worldpoints World with no-fee, but so far there are no reports of any success.

Comparisons

The student card is clearly better than the standard card as it offers an anniversary bonus of 1000 points (it’s like an annual fee of -$10). You don’t need to be a student to apply for it, so unless you really want a silver-coloured card instead of blue, there’s no reason to apply for the standard card.

However, both of these 1% cash-back cards are still inferior to the MBNA SmartCash® card, which gives you the same 1% return on regular purchases but also pays 3% on the first $600/month of gas & grocery purchases. Aspire Cash™ Platinum MasterCard® is another no-fee cash-back option which has an effective return of 1.2%, so these basic WorldPoints cards are not particularly competitive.

On the other hand, the World version is quite possibly the best pure cash-back card offered in Canada! “Pure” meaning you don’t have to travel, buy gas & groceries, or jump through any hoops to earn the full 2% with no tiers or maximums. The $89 annual fee is paid for with just $4450 spending, and it beats a no-fee 1% card after $9000 spending (and beats the 1.2% card at $11125). The only downside besides the annual fee is that the travel-related insurance coverage is a bit lacking (no travel medical, trip cancellation, flight delay, baggage delay, etc).

Comparatively, the Aspire Travel World MasterCard®, which can also earn a 2% reward, only costs you $20 per year after redeeming the renewal bonus points, and it has extremely good insurance benefits. Its sign-up bonus of 35,000 points is also superior, worth $350 of travel. But due to its redemption tiers, getting the full 2% value can cause some hassles, and requires that you travel occasionally. So for those who think an extra $69/year is worth paying for pure cash-back at 2%, or for those who never travel, the MBNA WorldPoints World may be the ultimate reward card.

About the Author: This is a guest post by Elbyron – A credit card rewards fanatic who can be found on the many personal finance and deals forums around the web. Check out his last post comparing the new Capital One credit cards.





18 Comments, Comment or Ping

  1. Another well thought out article Elbyron, thanks! I think I still like the Cap One Travel World card better than the MBNA Worldpoints World, mostly because the annual fee is net lower, and the insurance benefits cannot be beat!

  2. Hmmm…I’m still using the Travel Rewards Elite card. I don’t remember ever getting anything in the mail about this. I’m getting two points per dollar, which still works out to a 2% return, but I don’t have access to the cashback option and I’m limited to travel only. I’m going to have to look into this. Thanks for the post Elbyron!

  3. 3. Joe

    SmartCash MBNA MasterCard FTW!

    3% cashback on gas/groceries (pretty much everything for me cause I buy all my durables at the Scarborough West Wal-Mart Supercentre) with no annual fee is just unbeatable. Well, maybe it can be beaten, but somebody needs to clearly articulate why, and I’m still waiting for that explanation.

    Clearly MBNA segments the market with cards like the other cards you’ve mentioned. Notice how only one segment is “Smart”Cash. They should call WorldPoints “Pretentious”Cash.

  4. 4. Elbyron

    @Joe
    Here’s your explanation. It’s actually not that hard to beat SmartCash, and here’s the math to prove it:
    Max gas & grocery reward = 3% of $600 * 12 months = $216 / year
    Total annual reward on $x total spending: 0.01(x – 600*12) + 216
    Total annual reward on Aspire if points are redeemed for full 2% value, minus net annual fee: 0.02x – 20
    To find the break-even point, set the equations equal to each other and solve for x:
    0.01(x – 600*12) + 216 = 0.02x – 20
    x = 16400

    So if your annual spending is below $16,400 and you are able to max out the $600 gas & groceries each month, then SmartCash is best. But if you usually spend over $16,400, then Aspire is going to pay out better. Of course, the combination of using SmartCash for gas & groceries and Aspire for everything else is even better!

    Edit: also, just to compare with the Worldpoints World card, which has the formula: 0.02x – 89, the SmartCash gets beaten after $23,300 spending.

  5. You are the man Elbyron, thanks for the formula!

  6. 6. Elbyron

    FT, it looks like the only signup link you added to my article was for the student card. Maybe a link for the World card would be a good idea?

  7. 7. Dave

    How do you redeem for cash? I only see the travel and merchandise redemption options on their website.

  8. 8. Echo

    Nice detailed analysis, Elbyron.

    I recently compared the best cash back cards using the following criteria:

    $2,500/month spending, including $650 on groceries and $150 on gas. I looked at the total cash back over 3 years, which smooths out the first year bonuses.

    1. Scotia Momentum Visa Infinite = $1,755.00
    2. Capital One Aspire World MasterCard = $1,717.50
    3. MBNA Smart Cash MasterCard = $1,572.00

    I wasn’t aware of the MBNA Worldpoints World MasterCard, but some quick math shows this card would give me $1,633 back over 3 years, enough for 3rd place on the list.

    If I had a grand-fathered no-fee Worldpoints World MasterCard, I would get $1,800 cash back over three years, which would be the best option (too bad).

    Right now I have the Smart Cash MasterCard, but I like the solution of using Smart Cash for groceries and gas, and Capital One for everything else. Plus, the first purchase bonus for the Capital One card is pretty sweet (35,000 points = $262.50).

  9. 9. Joe

    @Elbyron Fantastic analysis. Obviously there are 6 months at 5% cash back, but I won’t muddy the waters. Since I spend much less than $16.5k, and since my partner got her card just after my 5% cash bonus ran out, I think we’ll stick with MBNA SmartCash.

  10. 10. SavingMentor

    Nice analysis Elbyron. I’ve reached pretty much the same conclusion myself. The MBNA Worldpoints World is my primary card, with the SmartCash as my secondary card for gas and groceries. The Capital Aspire World is my 3rd that I use when purchasing anything that needs the extra warranty protection or insurance coverage.

    I really don’t need the Capital One Aspire World anymore now that I have the MBNA Worldpoints World card with no annual fee. But for the net $20/year it costs me to keep it and the fact that I already have some purchases on it that would lose the extended warranty coverage if I cancelled it, I just decided to keep it.

    I love the fact the Worldpoints card is so flexible, but I also secretly hate it because now I’m much more likely to redeem my points to pay off bills or to put towards savings than to travel. I know there are easy ways to get around this problem but, for me, it is really psychological because I didn’t feel like I was taking money out of my pocket when using points to travel. Now, I do!

    If there was a Starwood card out there that wasn’t through American Express, I would still probably go with that card though because Starpoints offer such excellent value for travel. If the MBNA Starwood Preferred Guest MasterCard was still out there, I’d still be using that!

  11. 11. Elbyron

    @Joe
    The 6 months of bonus 2% on gas & groceries, assuming you max out the $600/month limit, is worth exactly 6*600*0.02 = $72. This is a pretty lame sign-up bonus, especially considering Worldpoints World has a $100 bonus and Aspire comes with 35,000 points that could be worth as much as $350 (plus an extra $50 if you sign up before April 1st using a referral code).

  12. 12. Elbyron

    @Echo
    It appears that you used 1.5% as the reward for the Aspire card in your calculations. Are you one of those people that never travel anywhere? No vacations, weddings or funerals that would require a flight or at least a hotel stay? At your spending rate, all it takes is $2090 worth of travel expenses in your first 3 years (or later on) to use the points for a 2% redemption. And then your 3-year reward total comes to $2090! Even if you only use half your points on travel, or if you redeem for amounts less than $600 and lose some points on the redemption tiers, you’ll still end up with a reward somewhere between 1.5% and 2%. In all likelihood, it will be enough to put this card into #1 on your list!

  13. 13. Echo

    @Elbyron – yes, I’m one of those people :|

    With a 3-year old daughter, and one more on the way, travel isn’t high on our priority list at the moment.

    I was looking at strictly cash back rewards. Planning a rewards strategy around potential funerals is a bit morbid, don’t you think? ;)

  14. 14. Elbyron

    @Echo
    lol… yes it does sound pretty crazy to say “I’m going to save up my points so I can buy a flight across the country when my next relative dies”. And though weddings are certainly less morbid (I hope), they can also be unpredictable. My point was simply that most people are going to have some travel expenses… but if you don’t, that’s perfectly fine. In your case, this Worldpoints World card is probably the best choice. If you do the math for 5 years instead of 3, you’ll see that it comes out ahead of Aspire (because it earns you $106 more per year).

  15. 15. Steph

    I have the SmartCash card – but recently got a company car with gas card so I no longer pay for gas. My groceries alone aren’t close to $600/month. I have an infinite visa from TD (no fee) for travel but I’m thinking of getting the Worldpoints World for recurrent bills and misc spending on top of these two cards. Think this is a good way to go?

  16. 16. Elbyron

    @Steph
    The TD Infinite card has a 1.5% return on most purchases, and 4.5% on travel booked through TD’s travel agency. Usually the only way to get the fee waived is to have Select Service, which costs $29.95/month or requires you maintain a balance of $5000 (which has an opportunity cost of $8 – $10 per month). But let’s assume that you are going to keep the Select Service account regardless of which credit card you use, and thus the Infinite card has no additional cost. I’ll also assume that you would be willing to book travel through TD, and it would account for somewhere around 5% of your annual credit card spending. This gives the TD card an effective return of 1.65% with no fee.
    Worldpoints World has 2% pure cashback with a $89 fee. Thus it would require at least $20K annual spending on the card before it starts outperforming the TD Infinite.
    The Aspire Travel World card is more likely to produce a better return, as its $20 net cost means it would start to beat Infinite after $4500 spending. But it’s not pure cashback, you have to have some travel charges over $600 to redeem against in order to get its full 2% reward.
    So it really depends on many factors, mainly your total annual spending and your annual travel spending. And if a big part of the reason for maintaining Select Service is because of the free Infinite card, then you might want to consider some of the monthly fee (or opportunity cost) as if it were a fee on the card, in which case the other cards are more likely to outperform.

  17. 17. Steph

    Thanks Elbyron! Yes I just maintain the minimum amount (or just a little bit over) in the TD account as I have other accounts with PC financial. I like having a face to face interaction for certain things and the extra services and fees waived. So I will maintain the account.

    Hmm I am more interested in having a pure cash back card and I do spend around or over $20K a year – I will look into the Aspire Travel World card as well.

    Thx!

  18. 18. Calvin

    My case is like Echo with annual spending 30000 including grocery+gas 7200. I don’t really travel so don’t think any pure cash back card can beat this RWE.

    30000*0.02=600, 600-89=511, 511/30000=1.7% no-fee cash back.

    Gonna apply for it. =p

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