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Top Cash Back Credit Card in Canada II - New Pick

Written by FrugalTrader on Sep 12, 2007 filed under Credit Cards

The last time I posted about top cash back credit cards in Canada, I picked the American Express Costco credit card that returns 1.5% on purchases above $5000 during the year.

Since then though, I have discovered a new cash back credit card that I believe beats out the rest and it’s also from American Express. It’s called the American Express Gold Cash Back Card and it returns 2% on purchases over $5000 for the year.

The Details

According to this thread on RedFlagDeals, here are the details on the American Express Gold card.

0.5% cash back on the first $2,500 in purchases.
1.0% cash back on the next $2,500 in purchases.
2.0% cash back on any amount over $5,000.
No Maximum Rebate!
Purchase Protection - 90 days insurance in case of theft or damage.
Extended Warranty - Doubles warranty up to 1 yr.
No Annual Fee

This card used to be an “invite only” card, but apparently now it’s available to the general public with no annual fee. The only requirement being that you make at least $30,000 in annual income.

How do you apply?

Apparently, the only way to apply for this card is via telephone: 1-800-268-2639.

Conclusions

I think I will be applying for this card in the near future for my Costco purchases. Even though the SPG credit card has a special place in my heart/wallet, this card is a very close second.

Update (June 23, 2008): Unfortunately, this card has been discontinued.

41 Comments, Comment or Ping

1. Blain Reinkensmeyer

Hmm, I like how it is only 2% after you spend over $5,000 in a single year. How many people actually spend over $5k on a single credit card in a year? But, heck Id put a ton of business expenses on it and rack up the spending faster.

Sep 12th, 2007 @ 2:21 pm
2. FrugalTrader

Hey Blain, I know that I spent over $30k on my single credit card last year. I typically funnel all expenses through a single credit card to reap the points. :) $30k spending with the AMEX would bring a return of:
$25,000 x 0.02 = $500
+ $2500 x 0.01 = $25
+ $2500 x 0.005 = $12.50
= $537.50 rebate.

Pretty decent for money that you’re going to spend anyways.

Sep 12th, 2007 @ 2:26 pm
3. Never Stop Buying

FT: You should post a picture of the card, it looks really gold and shiny

I like how you give credit to RFD, although I’m certain Ryan or Derek would prefer some money going their way too ;-P

Never Stop Buying
http://www.neverstopbuying.com

Sep 12th, 2007 @ 3:17 pm
4. FrugalTrader

Credit is given where it’s due. Traffic directed to them (link back) = money. They love it. :)

Sep 12th, 2007 @ 3:43 pm
5. EmperorCoder

I don’t see the point of owning a credit card which is barely accepted anywhere I shop. American Express doesn’t have a wide installed base in Canada.

Sep 13th, 2007 @ 12:03 am
6. FrugalTrader

Emperor, I guess it’s individual to the person as to where they shop. For me it would be perfect, Sobeys, Walmart, Costco, Home Depot and Esso.

Sep 13th, 2007 @ 8:44 am
7. Houska

A bit of potentially unwarranted scepticism….this is an Amex card, right? Many fewer merchants take Amex than take Visa, Mastercard. If you have $30k flow, it means you need to be sure you will be able to funnel through at least $12.5k on the Amex to beat a flat 1% on e.g. a PCF Mastercard.

Sep 13th, 2007 @ 9:05 am
8. FrugalTrader

Houska, I love skepticism. :) Yes, it’s an AMEX card, and yes, it’s not as widely accepted as VISA and Mastercard. For me though, I would use the amex for my bill prepayments from my telephone/cable provider, all my gasoline, groceries, home repairs, household essentials, and electronics. Yes, many of the smaller shops don’t accept AMEX, but for me, they represent a very small percentage of my spending.

In terms of comparing this card to a 1% card, 1% on $12.5k is $125 back, $12.5k on this card would represent:
$7500 x 0.02 = $150 + 37.50 = $187.50.

The only way a 1% card beats this card is in the first $5000 of spending. After that, the AMEX takes the lead (providing acceptance of vendors).

Sep 13th, 2007 @ 9:13 am
9. Houska

Ah! My bad on the arithmetic - but you do have to spend *more* than $5000 to make up for the *lower* than 1% Amex rebate on the first $2500. But the breakeven is $6250 not $12500 as I first wrote.

I’m surprised you can route your bills, groceries, etc. through Amex. While I haven’t looked into it, my experience from way back when I tried to route as much as possible through my corporate Amex was that beyond travel, more than half of my spending didn’t work on Amex. To each his own.

Sep 13th, 2007 @ 9:27 am
10. oOKitijimaOo

At this time I think it’s a brilliant card. I have since applied for the new card and will most likely stop using my Costco AMEX rebate card. The tier system on that one is not so good compared to the American Express Gold Cash Back Card , but they did up the max to $675.

There is one thing you should keep in mind, they don’t send you a cheque for that amount, it just reduces your balance on an annual basis.

Sep 13th, 2007 @ 2:12 pm
11. Canadian Capitalist

Thanks for the heads up. I have a Costco Amex card and might consider this new card. I’ll have to check back on our spending patterns to decide if it will be worthwhile to switch.

Sep 13th, 2007 @ 5:27 pm
12. NeverStopBuying.com

It is a cool looking card (to me at least). Aeroplan Plus/Platnium isn’t bad either
http://photos.bestlane.com/amexgold.jpg

I just love being asked by clerks about my AMEX card as most people have never seen a clear-see-through card.

Note: annual rebate comes out every January, so don’t start using it until 2008 January (keep using whatever you’re using now), UNLESS you can put lots of balance on it in the next 3 months! (> $5000)

Sep 14th, 2007 @ 4:11 pm
13. EmperorCoder

My point was that if you end up changing your shopping habits to concentrate where the AMEX card is accepted (which is very few places), maybe you end up paying more than you should for your goods as these shops probably have to up their prices a bit to recoup the AMEX fees which are higher than Visa & Mastercard. Maybe it’s just a false impression on my side, but I did found out that prices where higher where the Air Miles was accepted, so I figure it would (eventually) be the same with higher fee credit cards.

Sep 15th, 2007 @ 9:33 pm
14. EmperorCoder

I just called them and they told me the card was not available in Quebec.

Sep 18th, 2007 @ 12:53 pm
16. Elliot

American Express Gold Cash Back

Hi All, I cannot find the recommended card on the Amex Ca site. Is there a specific institution that issues this card?

Sep 22nd, 2007 @ 11:18 am
17. FrugalTrader

Elliot, the card used to be invite only thus the reason why it’s not on their site. However, now anyone can join by phoning the number indicated in the article.

Sep 22nd, 2007 @ 11:44 am
18. Steve

This card sounds very good. But if you work out the rate of return it is still not as good as the mbna spg rewards card. In order to get the most for your purchases shouldn’t you pick one card and stick with it? The only reason I see to have a secondary card is if your primary card isn’t accepted at the retailer you are trying to make a purchase at. With this in mind why would I get a AMEX card when it is accepted at fewer places that MasterCard. It seems that a good Visa card would be a better secondary card to the MBNA SPG card than this AMEX card.

Sep 24th, 2007 @ 11:12 am
21. Jordan Clark

I’ve had the American Express Gold Cash Back Card for a couple of years now, so here’s some advice:

The appearance of the card is not as good as you think. Because it doesn’t have the recognizable blue American express logo on the front I’m always having to tell the checkout clerk that it’s American Express, many think it’s Interac and screw up the transaction.

I use it all the time without having to change my spending habits or stores I shop at all. I find it’s accepted at most places besides Superstore / Urban Fair.

Another cool thing is with the 2% cash back you basically cancel out the 2% exchange surcharge that you get with virtually every card when shopping in the states/online.

This is probably the case for all American Express card, but don’t be late laying it! They take longer then most cards to process a payment, so send it in with time to spare or you could get a $50 charge + interest. (BTW You can dispute the first one and get it credited back)

Just one more month and I should be getting a $375 rebate for spending ~$22,000 on it.

I like when the bank pays me.

Nov 26th, 2007 @ 6:10 am
22. EmperorCoder

I’ve been calling them once a month to ask if the card was now available in Quebec. Until now I always got a polite “No but call back later, this may change soon”.

I got the surprise today on the phone that it is now possible for us Quebecers to get the card ! Perseverance pays off !

Nov 27th, 2007 @ 11:46 pm
23. kenny

MDJ…I was looking back at some of your older postings and came across this one. Is this credit card for real? is it still available? did you end up applying for it? if so do you know if there is an additional fee for a spouse card? Thanks

Mar 4th, 2008 @ 3:22 pm
24. Elliot

Kenny,

I have applied, and recd the rebate .. 2% is what they pay you (based on the scales above).

No fee for additional cards!

Enjoy!

Mar 4th, 2008 @ 3:26 pm
25. FrugalTrader

Kenny, as Elliot mentioned, the AMEX 2% cash back card is for real with no extra charge for spousal cards. I will be applying in the next couple months.

Mar 4th, 2008 @ 3:30 pm
26. kenny

FT/Elliot, Thanks for your responses! This card sounds good. I think I’ll be applying for one.

Mar 4th, 2008 @ 3:49 pm
28. Maxime Boucher

Emperor Code: I just called them and they told me they don’t offer it in Quebec. What did you told them to obtain it?

Mar 28th, 2008 @ 1:39 pm
29. OxHead

I’m amazed that FrugalTrader is able to use the credit card to pay household expense like cable/phone. Do you have any link to share that? I’m sure most of us use pre-authorized payment through our banks. If you don’t mind giving us some tips, that will be much appreciated. Cheers!

Apr 2nd, 2008 @ 2:38 am
30. Elliot

Hello All,

I benefited from the information relating to the Amex 2% cash back card and now I am happy to give back .. to those of you that purchase fuel at Shell (at least).

I noticed at my local shell station that they have a new cash back card. There are two options: (1) No Annual fee & (2) Annual fee of $49

1. No Annual fee of $49
———————–
No Fee CashBack (0.5%) Reward Option

* Get 2.5% CashBack on purchases at Shell locations across Canada for the first three months up to a monthly maximum of $2,5006.
* Get 1.5% CashBack on purchases at Shell locations across Canada after the first three months up to a monthly maximum of $2,5006.
* Get 0.5% CashBack on all other purchases7.
* No annual fee.

2. Annual fee of $49
——————–
Premium CashBack (1%) Reward Option

* Get 5% CashBack on purchases at Shell locations across Canada for the first three months up to a monthly maximum of $2,5006.
* Get 3% CashBack on purchases at Shell locations across Canada after the first three months up to a monthly maximum of $2,5006.
* Get 1% CashBack on all other purchases7.
* Free Roadside Assistance Program – fuel delivery, battery boost, lockout service, towing and more8.
* Annual fee of $49.

My personal choice is Option 2, the card with the annual cost of $49:
* I spend $60 per week on average
* Assuming the 3% on Shell purchases, that will be a cash back value of $1.80 per week
* For my spending, that will amount to an annual cash back of $86.40 (this is not considering any additional fuel purchase, and we plan on some road trips..)
* There is the added benefit of the Road Side Assistance with the card with the Annual Fee

I would only use this card for my fuel purchases at Shell and continue to use my Amex (2% reward) for non-Shell expenditure

I look forward to any comments .. or (hopefully not) but corrections.

Cheers and keep the posts coming ..
Elliot

Apr 2nd, 2008 @ 3:17 pm
31. oOKitijimaOo

Hi Elliot,

That’s great news, thanks for sharing. I decided awhile ago to boycott Shell. I was a long time purchaser of Shell gas for the longest time and after switching I notice that my car gained more milage with switching to Esso. Now I am not saying go switch but I just noticed it on my last car and I stuck with esso with my current car. I can’t remember why I switched but it must have been customer service related.

Anyways I just thought I would throw in my 2 cents worth.

Cheers,

Robert

Apr 2nd, 2008 @ 4:20 pm
32. jebster

I have the AMEX Gold Card after switching from the Costco Platinum Card. It took me several tries at Customer Service to get them to find this card…but keep trying. One thing Amex offers is to switch your Bank auto debits for cable, telephone, cell phone, etc over to AMEX gold card with no hassle. Give them the details and they do all the work and you get 2% off on these monthly payments. Too bad they don’t seem to accept car leasing payments at this time.

Apr 14th, 2008 @ 2:10 pm
33. OxHead

Thank Jebster for the tips on the Bank-authorized payment. I applied for the Amex Gold and the person who received my call was awesome. He knew about the card very well. Great service compared to the call centres of other credit card company!

Cheers!

Apr 15th, 2008 @ 1:19 pm
34. AJ

I just called Amex. The card has been discontinued as of May 16.

May 23rd, 2008 @ 4:11 pm
35. FrugalTrader

A quick note there guys, unfortunately, this card has been discontinued.

Jun 23rd, 2008 @ 4:35 pm
37. nobleea

Anyone have any experience with the MBNA 1% cash back card? I don’t know what it’s called, but there’s no fee, no tiers and no maximum. An application showed up in the mail this week.

Jul 17th, 2008 @ 7:48 pm
38. FrugalTrader

Hey Nobleea, there is a thread of RFD about the 1% mbna card, apparently it’s a “retentions” type card and not openly advertised. I guess they changed their policy!

Apparently, it’s a 1% card with no tiers and no fee like you mentioned along with platinum benefits like car rental insurance.

http://www.redflagdeals.com/forums/showthread.php?t=577763&highlight=mbna+1%25

Jul 17th, 2008 @ 9:00 pm
39. BTGNow.net

This post was the starting point for the eventual creation of a full article analyzing 7 Canadian Cashback credit cards, which can be found here:
http://www.btgnow.net/2008/08/analysis-of-7-canadian-cash-back-credit-cardsand-btgs-free-excel-model/

I also include a free excel file which will allow the reader to input their own variables into the model: readers will be able to put in their own values for purchases, gas, groceries, cashback rate on the card, annual fee etc. It is necessary that our readers download and use the free excel model, because it may change which card is best for them.

For example, the AMEX costco card that was so good for your purchasing habits came in dead last of 7 cards for my habits!

Thanks for the inspiration!

Sep 7th, 2008 @ 4:26 pm
40. Rick D

Just saw an ad for this card on redflagdeals.com… Any thoughts? 2% sounds good, but…

http://www.capitalone.ca/canada/cards/cashback-plus-platinum-mastercard/index.php

Sep 14th, 2008 @ 11:49 pm
41. Elliot

Hey Rick,

RE: http://www.capitalone.ca/canada/cards/cashback-plus-platinum-mastercard/index.php

In my opinion, this is not a good deal - their terms are pretty high because you would only earn 2% on your charges from the $20, 000 mark onwards. My Amex 2% (which I believe is not being offered anymore), starts awarding 2% at $2500 and I know that other cash back cards do the same.

For gas, I like the Shell Cashback Mastercard .. I got it with a 3% cashback on purchases at Shell but I’m not very sure but it seems like their latest offer is as much as 5%!! (1% on other purchases, i think) - I have made a post on the details of this card above .. but keep in mind I believe their latest offering is slightly different.

For those too lazy to go to the site, here are the details of the Captial One cashback card from:
[http://www.capitalone.ca/canada/cards/cashback-plus-platinum-mastercard/index.php]
* 1% cash back annually on total purchases up to $10,000
* 1.5% cash back annually on total purchases between $10,000.01 and $20,000
* 2% cash back annually on total purchases above $20,000

Happy deal hunting everyone!

Elliot

PS: In response to oOKitijimaOo’s post, I do respect your decision to boycott Shell.
I have been watching the difference in price between Shell and the others after your post but I have not seen any in my area of the GTA. Even if there is a cent or two difference I’m still ahead with 3% cashback.

Sep 15th, 2008 @ 10:22 am