May 28, 2023

The Queens County Citizen

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Credit Cards | Cashback Take Over Points Programs

Credit Cards |  Cashback Take Over Points Programs

About a year ago, Tangerine started putting all his expenses on a cashback credit card to get the most out of his reward program at Matt Brown. He pays the balance on his card at the end of each month.

Posted 1:46 pm

Leh Goleb
Canadian Press

The 33-year-old mortgage broker, who works for the Mission35 mortgage in Burlington, Ont.

“If I was saving for anything, I could put money aside from rebates. With tangerine, this is great because it can be paid into a special savings account. I bought a food processor with this money last month because I was interested in a particular model, ”he explained.

“I also used the money to put money in my quest trade (online brokerage) account. I will make a deposit only when it comes to a certain amount. […] I can put it in an exchange traded fund and see the money grow very fast. ⁇

According to a report by Digital Currency Trends 2021 recently published by, 78% of credit card holders say they use the card that most often offers some kind of reward. Cashback cards are the most popular (54%) followed by store credit (25%) and travel cards (23%).

“Cashback offers are no longer as attractive as they are in Canada and most people have never looked for cashback credit cards,” noted Michael Castaldo, general manager of daily banking at

“(They) are attractive for everyday use because you can earn a considerable amount of cash over time, especially if you use your card regularly to pay for specific items or recurring bills. ⁇

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Brown, who recently spent eight months renovating his home, customized spending categories on his Tangerine card to get the most out of his purchases for home improvements, furnishings and groceries.

The card offers a 2.0% cashback on all three categories of choice – other options include restaurants, gas and parking – and a 0.5% cash back on all other expenses. The cashback was credited to her Tangerine Savings Account. Cardholders who do not have a bank account in Tangerine will receive higher cashback on two categories instead of three, with cash back directly to their credit card account.

The “most obvious” return rate

Cashback at other financial institutions is a points system that has cashback options, or partnerships with specific gas station or grocery store chains that follow a variety of models that offer higher rewards than the baseline.

Direct cashback rewards increase savings in ways where points cannot be made, Castaldo points out.

“You can set it up so that your cash is automatically refunded into your savings or check account and it can be considered another savings benefit. ⁇

Cashback is also attractive due to its simplicity.

“The rate of return achieved is very clear compared to some of these point programs, which are reversible. And that transparency resonates with a lot of people,” he said.

Another advantage they have, especially over point cards, is that you get a dollar prize. By comparison, people do not always use all of their points on other types of reward cards.

“It was kind of exciting for a lot of people because they never end up with those awkward points that they never used at the end of the year,” he notes.

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The downside, compared to other reward cards, is that those who maximize their points on the points card usually get more value than the cash back card.

This is because financial institutions that control the value of points feel that consumers do not spend all of their points, he explained.

“(People) have this huge point balance, they keep it in their books every year, so they can be more generous by knowing that people will not always use it. With cashback, on the other hand, people reduce their balance to almost the last dollar every year.”

For Canadians looking to sign up for a cashback card, Castaldo always recommends reading the fine print.

“Most credit cards may have great welcome offers, but after six months those offers will disappear,” he said.

He adds that the best way to get a “bang for your buck” is to go online and read the specifics of each card.

Ratehub’s results are based on an online survey of 1,527 Canadians conducted between August 20 and August 22, 2021, using an online panel from the company Leger.