Ok, so you want to get a rewards credit card and take advantage of all the incentives Canadian banks are now offering to have you choose their card. Here are a few tricks you can play to get a leg-up on the banks:
1. Bonus Point Surfing: Most credit card issuers are offering significant welcome bonus points (i.e. 15,000-30,000 points on activation) to attract new cardholders. Many of the bonus points offered are enough to qualify you for a free return flight or hotel night. The simple game here is to apply for a card to get the bonus points, use the points on a flight and then apply for a card from a different issuer several months later, to get another free ticket – rinse, wash, repeat.
A great way to take advantage of this now is to do it with multiple issuers of the same rewards program that offer welcome bonus and annual fee waivers. For example, do it with the American Express, CIBC and TD Aeroplan cards, all offering between 15,000-25,000 point sign-up offers. You could end-up with 45,000-55,000 points at the end of the day, without every having to pay an annual fee.
There are plenty of offers out in the marketplace right now that are waiving the first year’s annual fee, such as the American Express Gold Rewards Card, which offers a 25,000 point sign-up bonus, and who’s points you can then transfer to Aeroplan 1:1. You’ll just have to make sure you meet the minimum spend requirements of each credit card to be eligible to receive the bonus points (usually around $500 int he first 3 months).
2. Referral Bonuses: A really quick way to add to your welcome bonus points is to refer a friend. Some issuers, such as American Express and CapitalOne offer referral bonuses, upwards of 10,000 points every time you refer a friend to them. The best way to play this game is to sign-up for a card like the American Express Gold Rewards Card above – earn your 25,000 sign-up points, refer a friend and earn an additional 10,000 points, giving you 35,000 bonus points all without having to pay an annual fee in the first year!
3. Companion Tickets: Another trend we are starting to see in the Canadian marketplace is the emergence of the $99 companion ticket for trips to anywhere in North America. At the end of each year that your card has been active (can be small purchase depending on the card), you can buy a companion ticket for someone travelling with you (wife, kids, etc…) for $99. This can be great value. The best deals out there are the companion ticket offers from the Alaska Airlines Mastercard, and the WestJet MasterCard for $99!
4. The Cash Back Category Game: As you’ve probably noticed, many credit card issuers are offering no-fee cash back credit cards that have higher cash back earnings depending on the spend category, i.e. 5% cash back on gas and groceries, 1% on everything else. See if you can combine credit cards so that you can take advantage of promotional category discounts, as long as you’re not paying an annual fee, this game can be highly profitable for you. Our favorite no-fee combo is the MBNA Smart Cash Credit Card for 5% back on gas & groceries, combined with the Amex SmartCash card, which also offer 5% cash back on gas, groceries and restaurants in the first 6 months – use this cards successively, and you’ll geat a year with a 5% discount at the pump, and the supermarket!
5. The Balance Transfer Game: There is no quicker way to lose the value of the points you’ve earned, than to pay interest on credit card balances you don’t pay-off at the end of the month. If you plan on making a purchase with your rewards card, and know you will not pay off the balance at the end of the month, transfer your remaining balance to a 0% low interest credit card. You will pay a small 1% transfer fee (compare to 19.99% interest), but after that, you’ll be able to pay down your balance over the course of a year without accumulating any interest. Our favorite card here is the 0% for 12 months MBNA Platinum Plus Mastercard.
This is a good start into the world of rewards cards. Get cracking and starting earning!