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Top credit card picks for 2018

Toronto Star logo Toronto Star 2018-01-29 Robb Engen - Personal Finance

Credit cards are a fact of life and depending on your point of view they’re either a necessary evil or a useful tool for building credit and earning rewards. I prefer the latter, which is why I’m always on the lookout for the best credit card offers.

But with seemingly hundreds of credit cards on the market aimed at everyone from low-income college students to high-rolling frequent fliers, it’s impossible to anoint one card to rule them all.

After scouring the market I’ve identified five categories and named my top credit card picks for 2018:

Top Everyday Spending Credit Card

MBNA Rewards World Elite MasterCard

The MBNA Rewards World Elite MasterCard is arguably the most straightforward and flexible rewards card to use for everyday spending.

Simply earn 2 points for every dollar spent – anywhere – with no limits to how much you can earn. Redeem them as often as you want, in whatever form you want – a statement credit, a deposit into your account, or even a cheque.

MasterCard is widely accepted, in particular at popular stores such as Costco and No Frills, making the MBNA Rewards World Elite MasterCard ideal for everyday use.

The card comes with a reasonable $89 annual fee, and you’ll also get 10,000 welcome points when you sign-up (worth $100).

Top Travel Rewards Credit Card

American Express Gold Rewards Card

Credit cards can be a useful tool for building credit and earning rewards. But it pays to look closely at the rewards and how much the annual fees are.© Provided by Toronto Star Credit cards can be a useful tool for building credit and earning rewards. But it pays to look closely at the rewards and how much the annual fees are.

Flexibility is king when it comes to travel rewards. No serious travel points collector wants to be handcuffed to one airline or one points program. They don’t want blackout dates or seat restrictions, and no milk-runs or red-eye flights.

That’s why my top credit card pick in the travel rewards category is the American Express Gold Rewards Card. This card offers incredible flexibility; with the ability to redeem for cash, travel, or to transfer points to frequent flyer and hotel programs.

Earn 2 points for every dollar spent at grocery stores, gas stations, drug stores, and on travel. Also get 25,000 points when you charge $1,500 in purchases to your card in your first three months.

The downside: A $150 annual fee is on the high end of the travel rewards category.

Top Cash Back Credit Card (Annual Fee)

Scotia Momentum Visa Infinite

As a rule, travel rewards programs are typically more lucrative than their cash-back cousins. But some cash back cards buck that trend. My top cash back credit card is the Scotia Momentum Visa Infinite Card.

This cash back king offers a juicy 4 per cent back on grocery and gas purchases, 2 per cent back on drug store spending and recurring bill payments, and 1 per cent back on everything else. While it does come with a $99 annual fee, the first year is free for new sign-ups.

The downside: While you can earn a lot of cash back with the Scotia Momentum Visa Infinite card, the program issues your rewards through a statement credit just once per year.

Top No-Fee Rewards Credit Card

Tangerine Moneyback Credit Card

The idea of paying an annual fee for a credit card doesn’t sit well with some people. That’s fine, but recognize that your options to earn rewards decreases substantially when you move from an annual fee card to a no-fee card.

The best of the bunch is Tangerine’s Money-Back Credit Card. The unique feature of this no-fee card is that you get to choose the categories in which you’d like to earn more cash back.

Earn 2 per cent back in three categories if you want your rewards redeemed into a Tangerine savings account, or earn 2 per cent in two categories if your rewards are deposited back onto your credit card.

Top Welcome Bonus

American Express Cobalt Card

Whether you’re a seasoned credit card points churner or just looking to test-drive a new rewards card, a strong welcome offer can carry a lot of weight in your decision. A good welcome bonus offers $250 or more in value. Even better if the annual fee is waived in the first year.

My top welcome bonus comes from the new American Express Cobalt Card. You can earn 2,500 Membership Rewards points for each monthly billing period in which you spend $500 in purchases. This could add up to 30,000 points in a year.

On top of that, if you sign up by Jan. 30, 2018, you can earn an additional 10,000 Membership Rewards points bonus — if you make a total of $3,000 in purchases in the first three months.

So, new Cobalt Card members can earn a welcome bonus of up to 40,000 Membership Rewards points. That’s enough for a long-haul flight to almost anywhere in Canada or the continental U.S., $400 in statement credits redeemed towards travel purchases charged to your card, or $400 worth of tickets at Ticketmaster.ca.

Bonus: Cobalt is the only card on the market that pays out 5x times the points year-round on groceries, dining, and take-out.

Robb Engen blogs at Boomer & Echo. Reach him at robbengen@gmail.com

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