4% Cashback Anywhere | Credit card reward programs | Discussion forum

4% cashback, no qualifications, is not sustainable because the interchange that the card issuer receives is nowhere near 4%.

For a top-of-the-line Visa Infinite Privilege card, the interchange for an electronic transaction is 2.08%. That can drop to just 1.95% for gas stations and groceries stores. It will be just 75¢ for a utilities payment.

As lhsaid mentioned, unless there is a large annual fee, the card issuer will lose money with an across-the-board 4% cashback.

Even an 1% cashback on everything can be challenging. For a Classic, Gold, or Platinum Visa card, the interchange for an electronic charge is 1.25%. That drops to 1.07% for gas stations and 1% for grocery stores. That drops further to 0.98% for charities.

https://www.scotiabank.com/ca/en/personal/credit-cards/visa/gm-card.html

GMC Visa is 5% on the first 5000 dollars and 2% after that.

The catch is you have to use the points on buying a car from GMC. I would not get this card for this reason. It is no fee though.

The Simplii card gives 4% on restaurants up to 5000 dollars a year. I think redeeming is yearly as a statement credit.

Tangerine World gives 2% for 3 categories with monthly redemption.
Rogers Infinite card gives 1.5% flat. Redeem when get to 20 dollars.

If you're willing to have a fee based card. Which i am not. The AMEX cobalt is 5% on restaurants.

It is likely most of these cards will be downgraded soon. Due to lower interchange fees.

There doesn't seem to be any distinction between foreign restaurant purchases and domestic ones. It is just the merchant category.

This is the fine print from footnote #1 of the Simplii Financial Cash Back Visa product page:

¹ Cash back is earned on net card purchases (purchases less returns) when your account is open and in good standing and not on cash advances, interest, fees, balance transfers, payments or Convenience Cheques. Cash back is calculated as follows: Earn 4% on the first $5,000 in net annual card purchases on restaurant, bar and coffee shop purchases, which currently include merchants classified as Eating Places and Restaurants; Drinking Places (Alcoholic Beverages) - Bars, Taverns, Nightclubs, Cocktail Lounges, and Discotheques; Fast Food Restaurants; or Caterers. Earn 1.5% on the first $15,000 in net annual card purchases on gas, grocery and drugstore purchases and pre-authorized payments. Gas, grocery and drugstore purchases currently include merchants classified as Service Stations (with or without Ancillary Services); Automated Fuel Dispensers; Grocery Stores and Supermarkets; Drugs, Drug Proprietaries, and Druggist's Sundries; or Drugstores and Pharmacies. Pre-authorized payments are payments made on a monthly or other regular basis, which are automatically billed by the merchant to your Account. Earn 0.5% on all other net annual card purchases, including those in the categories above when the $5,000 and $15,000 limits are exceeded. If a transaction could fit under more than one cash back category, you will be awarded the cash back of the higher category, subject to the $5,000 and $15,000 limits. Merchants are classified by the credit card network and the network may change the names of classifications or change the classification of merchants at any time. Simplii Financial is not responsible for merchant classification. The $5,000 and $15,000 limits will reset to zero after the day your December statement is issued. Changes to terms, conditions and eligible merchant categories may occur at any time without notice. We may cancel the cash back program on 60 days’ notice. Credit for returns made on your Account may result in a deduction of cash back at a higher earn rate, even though the return may relate to a purchase that earned cash back at a lower rate.

Currently, there is a welcome promo of 10% back on $500 of restaurant spend in the first four months.

Bill, are you saying that restaurant bills under $4 in Ontario shouldn’t have tax on them? If so, I wasn’t aware of this, so good to know, thanks.

That's right, so when my wife and I want something at Tim's, etc totalling under $4 each we order separately. I instituted that practice as soon as our courting days were over, had been burning me up inside. She won't admit it but she thinks I'm very smart for coming up with this tactic.

Here's the wording from the Ontario gov't site: "Qualifying prepared food and beverages that are ready for immediate consumption and are sold for a total price (for all qualifying items purchased, excluding HST) of not more than $4.00."

So appears 8% tax starts at $4.01 price. And doesn't have to be in a restaurant, here's an example from an Ontario gov't Tax Tip sheet:
"After working late one night, Andrew stops by his local grocery store on his way home to pick up a few items, including a few loaves of bread, cat litter and a roast beef sandwich for $2.50 and a 350mL bottle of apple juice for $1.00. For the purposes of determining if Andrew will be eligible for the Ontario HST point-of-sale rebate on the sandwich and apple juice, the grocery store ignores the bread and cat litter in calculating the $4.00 threshold. Since the sandwich plus the apple juice are sold for a total of $4.00 or less, the grocery store will automatically provide Andrew with the point-of-sale rebate, crediting the Ontario component of the HST and only collecting the five per cent federal component of HST on the sandwich and apple juice." Key is it's prepared and suitable for immediate consumption, wherever it's purchased.

One way you could earn about 5% in rewards (with highest payout if used in AMEX travel booking) is to get an AMEX Cobalt credit card through Great Canadian Rebates site which gives you 100.00 bonus, and then use it to buy gift cards at Sobeys or Longos or Food Basics or groceries there, or at restaurants to earn 5X points. It's a bit complicated and I never bothered, but you might want to give it a try. It's explained pretty well at credit card genius https://creditcardgenius.ca/cards/american-express-cobalt

and there's a huge thread on it on RFD
https://forums.redflagdeals.com/american-express-cobalt-amexcobalt-2127692/

Another way would be to churn credit cards for their bonus offers.