Canadian credit card rewards come in three forms: points, cash back, and miles. Understanding how each type works helps you choose the card that returns the most value for your actual spending.
The Three Types of Rewards
1. Cash Back
The simplest form — a percentage of every dollar you spend is returned as cash. Rates typically range from 1%–5% depending on the category.
- Fixed value: 1 cent per 1% per dollar spent
- No redemption complexity — appears as a statement credit
- Best for: Simplicity; consistent spenders; those who don’t travel frequently
- Examples: BMO CashBack World Elite (5% groceries), Scotiabank Momentum Visa Infinite (4% groceries/gas)
2. Points
Points have a flexible value depending on how you redeem them. They may transfer to airline or hotel programmes for premium value, or be redeemed at a fixed rate for merchandise or travel.
Fixed-value points (simple):
- Scene+: 1 point = 1 cent (redeemed for travel or cinema)
- TD Rewards: ~0.5 cents per point via Expedia for TD
Transferable points (flexible, higher ceiling):
- Amex Membership Rewards: 1 MR → 1 Aeroplan point (value: ~1.5–2.0¢ in premium cabins)
- Avion Rewards: transfers to Avios, Asia Miles (value: 1.0–2.5¢)
3. Miles / Airline Points
Earned directly in an airline loyalty programme. Value depends on how you redeem.
- Aeroplan: ~1.0–2.0¢ per point; best value in premium cabins and partner airlines
- WestJet Dollars: Fixed 1 cent per WestJet dollar (straightforward; like cash for WestJet flights)
- Air Miles: Variable; best redeemed for Dream rewards (flights, vacations)
How Earn Rates Work
Earn rates are expressed as points/miles per dollar or percentage cash back:
| Card | Earn | Effective Rate (approx) |
|---|---|---|
| BMO CashBack World Elite | 5% on groceries | 5¢ per $1 (cash back) |
| Amex Cobalt | 5x MR on food | ~7.5–10¢ per $1 (if transferred to Aeroplan) |
| TD Aeroplan Visa Infinite | 1.5x Aeroplan | ~2.25¢ per $1 at 1.5¢/pt |
| Tangerine Money-Back | 2% chosen categories | 2¢ per $1 (cash back) |
Points Value: What Is a Point Worth?
| Programme | Fixed-Value Redemption | Best Redemption |
|---|---|---|
| Scene+ | 1¢ | 1¢ (no upside) |
| TD Rewards | ~0.5¢ (Expedia for TD) | ~0.5¢ |
| Aeroplan | ~1.0¢ (economy flights) | ~2.0¢+ (business class) |
| Amex MR | ~1.0¢ (fixed travel) | ~2.0¢+ (via Aeroplan transfer) |
| Avion | ~1.0¢ (fixed travel) | ~2.5¢ (via Avios for Qsuites) |
| WestJet Dollars | 1¢ | 1¢ (no upside) |
Welcome Bonuses: The First-Year Boost
Most Canadian rewards cards offer a welcome bonus — a large points/cash-back grant after meeting a minimum spend in the first 3 months. Welcome bonuses often represent 1–2 years of regular earn compressed into a few months.
Example: TD Aeroplan Visa Infinite offering 60,000 bonus Aeroplan points after $3,000 spend in 3 months — worth ~$900 in Aeroplan flights. The annual fee is $139.
Always evaluate the net first-year value (welcome bonus + annual earn − annual fee) when comparing cards.
Redemption: Getting Value Out
- Cash back: Automatic statement credit or bank deposit — simplest
- Fixed-value travel: Book through the card’s travel portal (e.g., Expedia for TD, Scene+ Travel)
- Transferable points → airlines: Log in to your rewards account, initiate a transfer to Aeroplan/Avios/etc., then book through that airline’s award system
The highest value always comes from transferable points used for premium cabin flights, where you pay points for a seat that would cost $5,000–$15,000 cash.