Please note, that while writing a blog post like this “for a friend” would seem like something someone would do just as a gimmick, I assure you that my friend is a REAL GUY who asked me for advice!
So I have a friend who doesn’t use credit cards. Basically he’s simply never been a big fan, and has been leery of getting a card of his own due to seeing others use their cards negatively (racking up debt).
Yesterday he messaged me though, telling me that he has somewhat reconsidered, acknowledging that a credit card “may be of merit in certain circumstances”. I agree of course, and though he didn’t specify, I would have a list including things like car rentals, purchase protection and extended warranty, travel insurance, plus of course being able to earn rewards on every purchase.
He gave me a brief list of requirements for the card – NO annual fee, and cash back is his preference instead of reward miles or points. Most of his shopping is done at Costco, No Frills, Metro, and Canadian Tire. He will not carry a balance, so interest rate is not a factor.
Even before he gave me the list of where he shops, I knew I was likely to recommend the Tangerine Money-Back Credit Card With the ability to earn 2% cash back in up to 3 categories (0.5% everywhere else) and no annual fee, it’s tough to beat. Being a Mastercard is also pretty important – since Costco and No Frills don’t accept either Visa or American Express!
My friend does not currently have a Tangerine bank account, so he should open one up; without one the credit card only gets two 2% categories. He’s a good guy so I’m confident he’ll use my Orange Key 16736041S1 when he does so – this will give us both a $25 bonus. Free money! Tangerine also has a great promotion on right now, anyone who applies before July 31 will actually get 4% back in the bonus categories for 3 months – with NO spending cap! The cash back rewards also show up every month in your account, unlike many other cards that issue it only once per year or as statement credit.
Did I mention that you get to select your bonus cashback categories yourself? And they’re changeable every three months? Most people will do best with Gas and Groceries as two for sure, then choosing one more based on their spending habits.
I have recommended Tangerine bank more often than just about anything else over the years. I’m a big fan of saving my money with them and of their Mastercard as well.
Other Options:
The Capital One Costco Mastercard has some good insurance coverage for a no fee card, but not a great everywhere earn rate – only 0.5% until you spend $3000, then 1% after that.
The BMO®* CashBack Mastercard®* earns a straight 1% everywhere after the initial bonus rate of 5% (for 3 months up to $2000 spent) expires. With this, my friend would be earning 1% at Costco right away. This card would actually pair really well with the Tangerine card for someone willing to have two credit cards. Never earn less than 1%!
Triangle™ Mastercard® earns 4% at Canadian Tire and affiliated brands (Marks, SportChek, and some others), along with $0.05 back on every litre of gas purchased at CT Gas bars. A few of downsides to this card: low earn rate (0.8%) at other locations, and all cash back is actually Canadian Tire Money rewards – good but not quite as useful as cash. Not very good insurance coverage either. That said, if you get your gas regularly at CT Gas+ stations, it would be a solid earner.
The SimplyCash™ Card from American Express – Would be another option to pair with the Tangerine Card. For my friend and his frequent Costco/NoFrills shopping, the Amex isn’t an ideal only card, but it’s a very good cashback earner for a no-fee card. This card earns a straight 1.25% on all purchases, and also has Travel accident insurance.
Simply as a courtesy to other readers, I will mention the American Express SimplyCash Preferred card, which earns 2% on everything, but comes with a $99 annual fee. The breakeven point compared to the no-fee version is just over $13,000 of annual spending, but the Preferred also has excellent insurance coverage included so it could be worth it for you even if you spend slightly less.
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