9 Best No-Fee Cash Back Credit Cards In Canada (Feb 2024)

September 12, 2022
Blog

There are quite a few good no-fee cash back credit cards out there, but some stand out above the rest for their impressive welcome bonuses, promotional cash back rates, and excellent rewards. I constantly keep up with the latest promo rates and policy changes and make my recommendations below based on years of experience.

I recommend the BMO CashBack Mastercard as Canada's #1 cash back credit card due to its high promotional cash back rate, extended warranty, and instant deposits. It is one of the most flexible cards and comes with perks like discounts on car rentals and cash back on all categories.

What Is A No-Fee Cash Back Credit Card?

No-fee cash back credit cards are a type of reward credit card that allows you to earn rewards in the form of cash back when you make purchases. Cash back rewards are usually divided into two main types: category-based cash back cards, which earn you cash back when you make purchases towards categories like groceries or gas, and store cash back cards, which earn you cash back only when you shop at select partner stores. 

No-fee cards offer cash back rates of up to 3% on select categories, and most have an annual limit on how much cash back you can earn. For store-bound cash back cards, cash back rates can reach 4%, but they are considerably less flexible. Some no-fee cash back cards offer promotional cash back periods, but keep in mind those periods usually last just a couple of months.

Without further ado, here are the best no-fee cash back credit cards Canada has to offer:

The Best No-Fee Credit Cards In Canada

  1. BMO CashBack Mastercard: Best for promotional cash back rate
  2. BMO AIR MILES Mastercard: Best for travel perks
  3. Tangerine World Mastercard: Best for customizable categories
  4. Canadian Tire Triangle World Elite Mastercard: Best for purchasing at partner stores
  5. Home Trust Preferred Visa Card: Best for no foreign exchange fees
  6. MBNA Rewards Platinum Plus Mastercard: Best for generous welcome and anniversary bonus
  7. Neo Financial Mastercard: Best for no cap on how much cash back you can earn
  8. SimplyCash Card from American Express: Best for comprehensive insurance
  9. Tangerine Money-Back Credit Card: Best for low interest on balance transfers

How Do No-Fee Cash Back Credit Cards Work?

No fee cash back credit cards work like regular cash back cards. When you make a purchase with a credit card you earn rewards in the form of cash or points that can be redeemed for cash or products. Cash back credit cards can help you save on most everyday purchases, and rewards are very easy to redeem.

Depending on your goals, a cash back card may be more beneficial than travel cards or another type of reward card. Travel cards are harder to navigate and have a more complex points system, plus travel perks that are only beneficial for you if you travel a lot.

Cash back credit cards are the most flexible cards, and even if you have a different card, like a low-interest or travel card, you will still benefit from the higher rates of dedicated cash back cards.

Pros & Cons Of A No-Fee Cash Back Credit Card

Pros: Why A No-Fee Cash Back Credit Card May Be Worth It

  • No annual fee
  • Earn rewards on all your spending
  • Flexible and easy-to-understand rewards system
  • Pick and choose select categories and enjoy higher cash back rates
  • Access to shopping perks like extended warranties, return guarantees, and more

Cons: Why A No-Fee Cash Back Credit Card May Not Be Worth It

  • High credit score requirement (660+)
  • Cash back cards are not free money – you need cash to earn cash
  • Annual cap on how much you can earn per year

Types Of No-Fee Cash Back Credit Cards In Canada

#1 Flat-Rate Cash Back Cards

A flat-rate cash back credit card offers the same cash back percentage for all spending categories. It’s the most basic type of cash back card and one of the most used as a catch-all solution. Reasonable earn rates for this type of card are between 1.5% and 2% in all categories.

One major drawback is that if you’re not taking advantage of most categories and instead have higher spending on a particular one, you’re potentially missing out on the full benefit of the card. In that case, you’d be better off with a Bonus category or a Customizable category cash back card.

Here are two examples of two no-fee flat-rate cash back cards in Canada:

Home Trust Preferred Visa Card1% cash back on all categories
SimplyCash Card from American Express1.25% cashback on all categories

#2 Bonus Category Cash Back Cards

A bonus category cash-back credit card offers different cash back rates depending on the category type. This type of card requires more planning than a flat-rate card, and you need to make sure you’re taking advantage of the higher-rate categories. Reasonable rates for this type of card are 3% on select categories and 1% on all other categories.

Here are two examples of bonus category cash back cards in Canada:

BMO CashBack Mastercard3% on groceries, 1% on recurring bills, 0.5% on all other purchases
MBNA Rewards Platinum Plus Mastercard4 points per $1 on groceries & restaurants, 1 point per $1 on all other purchases

#3 Customizable Category Cash Back Card

A customizable category cash back credit card offers its users the ability to pick and choose specific categories and earn an increased rate. These cards may have lower rates than regular bonus category cards, but if you choose your categories smartly, you may earn more. Make sure to choose the categories based on your specific spending habits.

One drawback of these cards is that there’s usually a waiting period if you want to change your preferred categories.

Tangerine Money-Back2% in up to 3 categories of your choice, 0.5% on all other purchases

How To Choose A No-Fee Cash Back Credit Card In Canada

Welcome Bonus And Promotional Rates

Some cash back cards in Canada come with a welcome bonus or promotional rate. Welcome bonuses are one-time rewards for new cardholders, which can take the form of higher cash back rates for fixed periods (usually no more than 3 months and with a built-in spending limit).

Bonus Categories

Based on your spending, you should pick a card that can maximize how much cash back you can earn. Some credit cards allow you to choose your preferred categories so you can earn additional cash back, like the Tangerine World Mastercard. For reference, here are some of the most common spending categories in cash back credit cards:

  • Grocery stores
  • Gas stations
  • Restaurants
  • Travel
  • Drugstores
  • Home improvement stores

Interest Rates

Another important factor is the interest rates; if you often fall behind on credit card payments, a cash back card might not be for you. The standard interest rate for cash back cards is 19.99%, and it can easily outweigh the cash back benefits if you miss payments.

How To Redeem Your No-Fee Cash Back Credit Card Rewards

Depending on the card you choose, you will have different options to redeem your rewards. Some of the most common options include:

  • A direct deposit to your checking or savings account
  • A check sent to your mail
  • A statement credit
  • Gift cards
  • Merchandise

Some cash back cards pay back rewards monthly, like the Tangerine Money-Back Card, while others have minimums you have to reach before you cacn claim your cash back.

Most cards listed here offer a promotional cash back rate plus a fixed rate for categories like groceries and gas. The BMO CashBack MasterCard offers the best rates for groceries, and the Tangerine World Mastercard has an excellent promo rate plus allows you to choose your cash back categories.

In general, cash & gift card rewards allow a lot more flexibility than store-locked rewards, like those offered by the Canadian Tire Triangle World Elite Mastercard, which can only be redeemed at select stores..

How To Apply For A No-Fee Cash Back Credit Card In Canada

Age

In Canada, the minimum age to request a credit card is the age of the majority. Teens under that age can’t get approved for credit cards but can be added as authorized users to one of their parent’s credit cards. For reference, the age of the majority in Alberta, Manitoba, Ontario, Quebec, Prince Edward Island, and Saskatchewan is 18 years old. In all other provinces, the age of the majority is 19.

Residency Status

Canadian credit cards are available to residents and non-permanent residents. However, most cash back cards require you to be a Canadian resident. For other card types like a prepaid, store, and secured credit cards, you don’t even need a credit history. Credit score

No fee cash back credit cards require a good credit score, starting from 660 to 760. The higher you score, the more likely your application will be accepted, and the more generous the cash back rates and the welcome bonuses.

Personal Or Household Income Requirements

Some premium cash back credit cards come with an income requirement, usually ranging from $60,000-$80,000 or $100,000-$150,000 household income. These cards tend to require a higher credit score and come with the best benefits. However, this is not the norm: most cash back credit cards have no-or-very-little income requirements.

No-Fee Cash Back Credit Cards FAQs

Are No-Fee Cash Back Credit Cards worth it?

When no-fee cash back cards might be worth it for you:

  • If you have a high credit score and can access the best no-fee cash back credit cards
  • If you find yourself making a lot of purchases and spending a lot of money every year at eligible stores like restaurants, gas stations, and grocery stores
  • If you have no trouble keeping up with your monthly credit card payments and are very unlikely to fall behind on payments
  • If you want to save up on the annual fee charged by most cash back credit cards

When no-fee cash back cards might not be worth it for you

  • If you have trouble keeping up with payments, a cash back credit card might not be for you
  • If you don’t want to increase your spending, a cash back card can be counterproductive

What Is The Best Free Cash Back Credit Card In Canada?

The best free cash back credit card in Canada is the BMO CashBack MasterCard. It comes with a 5% cash back earn rate for the first three months, no annual fee, and a welcome bonus of $125 that you can earn over the course of three months if you spend over $2,500.

How Many Credit Cards Should A Person Have?

A common strategy for cash back cards is to have two cards; one with a flat rate of 1.5% or more across several categories and a specialized card that offers 5% back on select purchases like groceries or gas. That way, you earn money on all purchases and keep a manageable number of cards. Usually, it’s a good idea to have cards from the same issuer to keep things as simple as possible, but that’s not always an option.

The major drawback of having too many cards are the fees and interest charges on each; it’s also harder to keep track of all payments (which can be very time-consuming), and you may not reach the spending minimum to start redeeming rewards.

Does Having Multiple Credit Cards Affect Your Credit Score In Canada?

Yes, having multiple credit cards affects your credit score – but usually in a positive way. Having multiple cards can be beneficial by decreasing your credit card utilization percentage and thus increasing your score. In the very short term, it may hurt your credit due to the credit history checks.

Is There A Downside To Cash back?

One of the biggest downsides is that some users end up over-spending to earn cash back. Another drawback is that cash back rewards generally are not instantly redeemable; instead, you may have to wait for months or even yearly payments. That's why many people prefer loyalty rewards credit cards like the Amex Gold or other options.

Earn $347 From Our First Email