If the value is there, it’s worth shelling out for premium cards . But given the choice, we’d always prefer to reduce those costs whenever possible.
First year free is great, but it isn’t forever. We can use signup incentives to justify our new credit cards, but what about our keepers?
Luckily, the banks know they need to provide ongoing value to keep fee-paying cardholders on the hook year after year. Some cards have annual credits which offset the annual fee, either partially or entirely. This makes the decision to keep the card a lot easier.
American Express Platinum Cards
The big kahuna of the Canadian credit card scene, the American Express Platinum Card , has some of the best benefits in the business.
You get 2 Membership Rewards points per dollar spent on eligible dining and travel purchases, a complimentary Priority Pass membership with unlimited visits to airport lounges for you and one guest, automatic hotel status including Marriott Bonvoy Gold Elite and Hilton Honors Gold , and strong travel insurance .
I’d also venture that the Amex Platinum is the standard-bearer among Canadian credit cards as a status symbol. Whether or not that moves the needle for you, you can’t deny that the card is flashy, or that its exclusivity and branding have value.
To justify these perks, the card commands the steepest annual fee, recently increased to $799 (all figures in CAD). However, once you’ve gotten over the sticker shock, you’ll notice that the card has a $200 annual travel credit and a new $200 annual dining credit.
Its business variant, the Business Platinum Card from American Express , now also comes with a $200 annual travel credit; however, it didn’t get the $200 annual dining credit added to its list of perks during the most recent revamp .
To start off, the travel credit on both cards is extremely flexible and easy to use. You can apply it to any flight, hotel, car rental, or vacation package booked through American Express Travel Online or the Platinum Card Travel Service over the phone.
You have to use the credit when you make the booking; it can’t be applied later. However, it won’t be clawed back if your plans change and you have to cancel your reservation. Because of its versatility, I’d consider this credit as good as cash.
On the other hand, the $200 annual dining credit on the personal Platinum is less flexible, as you can only use it at a list of “top restaurants” curated by Amex.
Most, if not all, of the restaurants on the list are high-end, and for a dinner for two, you’d probably still need to shell out more money in excess of the credit.
Still, you can use the dining credit to justify the Platinum Card’s annual fee, and when combined with the travel credit, there’s an effective a net cost of $399.
On the Business Platinum, the $200 annual travel credit makes the annual fee $599 instead of $799.
In both cases, that’s a high fee for a keeper card, but it’s actually on par with or lower than other top-tier cards . The TD Aeroplan ® Visa Infinite* Card, the CIBC Aeroplan Visa Infinite Privilege, and the American Express Aeroplan Reserve Card all have $599 annual fees.
If you prefer the wide-ranging all-round travel benefits of the American Express Platinum Card or Business Platinum Card over a slate of benefits that are more closely tied to Air Canada flights, the Amex Platinum cards are clear winners.
Read More
How Does the American Express Platinum Card $200 Annual Travel Credit Work?
How Does the American Express Platinum Card $200 Annual Dining Credit Work?
American Express Gold Rewards Card
In many ways, the American Express Gold Rewards Card is just a slimmed-down version of the Platinum Card. This doesn’t necessarily follow the per-ounce value of the actual precious metals, but in the world of credit cards, platinum always seems to carry more prestige than gold.
With an annual fee of $250, the Gold Rewards Card is a bit more bearable to anyone who might balk at the $399 net annual fee on the Platinum Card. Throw in a $100 annual travel credit and some other perks, and $150 is well within most people’s realm of comfort.
The annual travel credit can be used in essentially the same way as the Platinum’s. You have to apply it during the booking process on American Express Travel Online, and it doesn’t get clawed back if your plans happen to change and you refund your booking.
When you consider the card’s other perks, including four free visits to Plaza Premium Lounges per year and a $50 NEXUS rebate every four years, there’s a decent amount of value to be found at a lower cost than the Platinum Card.
Just be sure to look at your spending patterns, as you may wind up better off earning 5 points per dollar spent on food and drink with the Cobalt Card rather than the 2 you’d get with the Gold Rewards Card.
Big 5 Banks: Travel & Lifestyle Credits
Let’s take a look at the travel credits, or lack thereof, offered by Canada’s Big 5.
CIBC
In a similar vein to the Amex Platinum Card, the CIBC Aventura Visa Infinite Privilege also has a $200 annual travel credit, bringing the card’s annual fee down from $499 to a net cost of $299. However, it’s not quite as flexible as the Amex Platinum or Gold credits.
You have to book by calling the CIBC Rewards Centre, where you can book flights, hotels, car rentals, vacation packages, and cruises. Because CIBC’s travel agency is making the booking on your behalf, they have to use agency rates and agency booking portals.
That means it’s not always easy to attach your loyalty number to a flight or hotel booking. Unless you can find an agent who’s willing to book a different way, you won’t be able to enjoy your elite benefits, and you can’t use any lower members-only rates that you may find.
Also, if you book a refundable or postpaid rate, the credit won’t be applied to your account until after the travel dates. So while this one isn’t quite as good as cash, I’d count on it as a guaranteed annual fee reduction if you intend to use it for travel.
Bank of Montreal
Likewise, BMO has annual credits on their BMO eclipse Visa Infinite and BMO eclipse Visa Infinite Privilege products. Instead of a travel credit, they’re calling these a “lifestyle credit”. By all accounts, it’s easy to cash out against just about any purchase.
With a $50 lifestyle credit, the BMO eclipse Visa Infinite annual fee comes down from $120 to $70
With a $200 lifestyle credit, the BMO eclipse Visa Infinite Privilege annual fee comes down from $499 to $299
Despite these savings, you have to consider whether you even want to keep these cards long-term.
CIBC Aventura can be useful for oddball bookings when redeeming points for high-value travel experiences isn’t an option. In these cases, the points are useful for offsetting the cost of an independent hotel or cruise, but they don’t otherwise have much utility as, say, Aeroplan or Amex Membership Rewards .
The same is true for BMO Rewards , which can be applied against any travel purchase as a statement credit.
If you don’t decide to keep the CIBC or BMO cards for the long-term, note that both of their credits are based on the calendar year rather than the membership year, allowing you to double-dip the credits during your first year if you so choose.
TD
The TD First Class Travel® Visa Infinite* Card had a makeover in the fall of 2022 , with changes to its earning structure, design, and annual fee, as well as the introduction of a travel credit of sorts.
Unlike other travel credits, which can be applied to any travel purchase, the $100 annual TD Travel Credit is tied to accommodation bookings through Expedia for TD. After spending at least $500 on eligible lodging expenses, you’ll receive a $100 statement credit.
While it’s nice to see TD dabbling in the travel credits game, the fact that it’s not a one-to-one credit makes it much less versatile than with other cards. Luckily, the TD Travel Credit applies per calendar year, leaving the door open for a double-dip before you’re subjected to the $139 annual fee in the second year.
RBC & Scotiabank
RBC and Scotiabank are laggards amongst Canada’s Big 5 banks, in that they don’t offer annual credits on any credit cards. But between my rewards goals and personal history with those banks, I value their cards more highly as keepers.
If I’m going to use a card on a regular basis, I’d like it to be one that earns rewards that I actually want, at rates I like. Once you get rolling, you can create a positive feedback loop: I pay annual fees and spend on cards with good rewards, and in doing so I strengthen my relationship with banks that offer good rewards, making it easier to apply for more cards that earn good rewards in the future.
For me, it’s an easy choice to stick to my plans, and not chase a partial rebate for products that aren’t giving me incremental value every year over my other credit cards.
HSBC & National Bank: Travel Enhancement Credits
If the Big 5 are the vanilla nuclear family, and Amex is the cool cousin, HSBC and National Bank are the wacky aunt and uncle. They’ve got some gravitas, but it’s a bit of a puzzle to make sense of them.
Fortunately, they don’t skimp on gifts for their nieces and nephews. They do spoil us with annual credits, once we’ve figured out how to unwrap the excessive packaging.
Rather than a blanket travel credit that can be used for any booking, these two banks offer travel “enhancement” credits. They can’t be used for flights and hotels in the traditional sense – instead, they’re intended to be used to upgrade your travel experience.
Unfortunately, many of these upgrades are already covered by flying business class or having elite status, so let’s see if we can get value for them anyway.
HSBC
The HSBC World Elite Mastercard, which is unfortunately not open to new applications anymore and will likely soon disappear once RBC’s acquisition of HSBC Canada is finalized, offers a $100 annual travel enhancement credit for seat upgrades, baggage fees, and airport lounge passes.
You can apply this credit yourself on the HSBC Rewards website – all you need to do is select an eligible expense made within the last 60 days.
HSBC seems to take a liberal interpretation of which travel expenses qualify for the credit. While they might not allow you to use it for a booking made directly with the hotel, you might have better luck with an online travel agency.
If the merchant sells regular bookings and eligible upgrades alike, the transaction on your statement won’t show a difference.
