Shrewd Spender

Spend smart. Save smart. Invest Smart.

Maximize Returns From Reward Credit Cards

I’m a big fan of no annual fee, cash back or cash equivalent reward credit cards. The credit card company pays you to use their credit card. What’s not to like about that!

Credit card companies are there to make money, but if we’re a little bit smarter with how we use our credit cards, we can maximize our cash back returns! What tweaks can we make to be smarter spenders with our credit cards?

Use the Right Card for the Right Situation

Some credit cards give you more cash back when you’re buying certain things.

For example, I use the MBNA Smart Cash MasterCard for gas and groceries because pays a nice 2% cash back on the first $400 spent on gas and groceries.

I use my TD First Class Travel Visa Infinite Card for travel related purchases; it returns a whopping 4.5% cash back equivalent in points when you book travel online from TD’s own travel site, Expedia for TD! The catch with the TD points is that you can only redeem these points against the cost of travel related items such as flights, hotel rooms, and car rentals. The TD First Class Travel Visa Infinite Card returns 1.5% for non-travel related purchases, so I use this card for to buy everything that is not grocery and gas.

For any purchases not in Canadian dollars I use the Rewards Visa. This card has no foreign currency conversion fees while also giving you 1% cash back on all purchases; 2% back if you are buying things ar!

Put All your Purchases on your Card

Obviously, the more you put on your card, the more you will get back. It’s easier than ever to use credit cards with Visa payWave and MasterCard PayPass. Most places now have the ability to tap your credit card and go. Plus, if you have to buy groceries and gas anyway, why not get some money back from it.

Pay Off your Balance Monthly

This is the most important thing to do to maximize your cash back returns. You must pay off the balance in full every month to realize any rewards. The interest these credit cards charge (or any credit card for that matter) would easily eat up any cash back you gain. While cash back and reward cards can return anywhere from 1% to 4.5% of what you spend, a quick check on the credit cards I use shows the typical regular interest rate is 19.99%! It clearly makes no sense to pay 19.99% on something to get 4.5% back. Bottom line, pay off your balance every month.


The MBNA Smart Cash MasterCard pays 2% on the first $400 spend on gas and groceries and 1% on gas and groceries purchases after $400. The card also returns 1% on non-gas and groceries purchases. There is a $1250 monthly spending cap eligible for cash back. The MBNA Smart Cash MasterCard World version removes the $1250 monthly spending cap.

There is a $100 annual fee for the TD First Class Travel Visa Infinite Card, but it’s waived if you are a Select Service account holder (account monthly fee is waived with a $5000 minimum balance) with TD Canada Trust. I do not recommended this card if you cannot get the annual fee waived. Also, if you don’t travel a lot, don’t bother with travel reward cards.

Do you use cash back reward credit cards? What is your strategy to maximize your returns?

Image courtesy of phanlop88 /