Best No-Fee Cash Back Credit Cards In Canada

It’s nice to get cash back rewards on your credit card spending, but the top cash back credit cards come with an annual fee that can take a bite out of your earnings. If you’re not a big spender, the best option is a no-fee cash back credit card.

Best No-Fee Cash Back Credit Cards

You can still earn big rewards with a no-fee card.  I’ve been using the MBNA Smart Cash card for over a year, and so far I’ve collected $700 in cash back.

With this no-fee cash back credit card, you get 5% back on groceries and gas for the first 6 months, and 2% back thereafter.  You’ll also get 1% back on all your other purchases, including recurring bill payments.

Once unmatched as the best no-fee cash back credit card in Canada, the Smart Cash card now has a new rival.  That’s because Capital One made some changes to their Aspire Cash card, which includes dropping the $120 annual fee.

With Aspire Cash you’ll get 1% cash back on everything you spend, which is pretty standard for a no-fee rewards card.  But you’ll also get an extra 50% bonus on your cash rewards each year – which boosts your cash back rewards to 1.5%.  On top of that, Capital One throws in a generous $100 cash bonus with your first purchase.

To find the right card, you need to figure out how much money you spend on average each month.  Some annual fee credit cards offer juicy rewards, but unless you have a high income and spend more than $2,000 per month on your card, you’re probably better off with a no-fee rewards credit card.

Related: Best Credit Cards For Travel Rewards

No-Fee Cash Back Credit Card Comparison

I took a look at the best cash back credit cards with no annual fee, and compared them based on spending $1,000 per month and $2,000 per month to see which one came out on top.

I also looked at how much cash back you’ll earn after using the card for three years to balance out the cards that pay big bonuses in the first year.

Credit Card Annual Cash back $1,000/month* After 3-years Annual Cash back $2,000/month** After 3-years
Capital One Aspire Cash $280 $640 $460 $1,180
RBC Cash Back $160 $504 $336 $1,008
MBNA Smart Cash $240 $576 $270 $666
PC MasterCard $125 $365 $245 $725
TD Rebate Rewards $120 $360 $240 $720
Scotia Momentum No-Fee $102 $306 $204 $612

*based on spending $400 per month on groceries and $100 per month on gas

**based on spending $800 per month on groceries and $200 per month on gas

How To Get More Cash Back Rewards

The Capital One Aspire Cash card comes out ahead of the other no-fee cash back credit cards in all four categories.  That’s because this card basically pays 1.5% cash back on all your spending, not just boosting it for grocery and gas spending.

But if you spend a lot on groceries and gas, but not on much else, the MBNA Smart Cash card is worth a look.  You’ll get 5% cash back for six months on grocery and gas spending, and 2% cash back thereafter.  The downside to the Smart Cash card is there’s a $400 per month cap on grocery and gas spending, and it only pays 1% on all other purchases, up to a maximum of $1,250 a month.

When you use the Capital One Aspire Cash card in tandem with the Smart Cash card, you can boost your credit card rewards in the first year by over 20% – from $460 to $556.  Here’s how it works when you spend $2,000 a month:

Spending category Monthly spending Annual cash back from Smart Cash Annual cash back from Aspire Cash
Groceries / gas $1,000 $168 $72
Restaurants $200 - $24
Bill payments $400 - $48
Other $400 - $48
Bonus - - $196
Total $2,000 $168 $388

The point here is to max out the grocery and gas multiplier with your Smart Cash card, and then use the Capital One Aspire Cash card for everything else.

You’re getting the best from both cash back credit cards, taking advantage of the full 5% bonus for six months, then 2% from the Smart Cash card and then getting 1.5% using the Aspire cash card, plus the $100 bonus.

  • Sign up for the MBNA Smart Cash MasterCard here – (link)

Do you use a no-fee cash back credit card?  Do you use it in tandem with another card to maximize rewards?

17 Responses to Best No-Fee Cash Back Credit Cards In Canada

  1. MG says:

    Hello and thank you for your analysis. One question if I may. How do you pay off your MBNA credit card every month? Are you able to set it up as a “payee” on internet banking or do you have to cut them a cheque? I remember looking into this over ten years ago when MBNA/Capital One first came to Canada and the only way I could pay was to send a cheque in the mail – which I thought might be risky. Just wondering if things have changed.
    Many thanks!

    • Echo says:

      @MG – great question. You can set-up the MBNA Smart Cash card as an online bill payment with your regular bank. I just use my ING chequing account and pay the bill online when I get the statement.

  2. Dee says:

    Super useful post — thank you! I’ve been using TD Rebate rewards, which kicks in at a better rate after a certain amount of spending. I was just thinking I could probably do better. I’m not convinced I spend enough on groceries and gas to make MBNA worthwhile but this CapitalOne might be a great fit for my spending habits.

    (Incidentally, I buy quite a bit of groceries at Shoppers Drug Mart — I’m guessing that doesn’t get tagged as groceries for the purposes of the MBNA card… Do you know if I’m correct on that?)

    Thanks for the post!

    • Echo says:

      @Dee – thanks for your feedback. The nice thing about both cards is there’s no annual fee, so just spend your normal amount on groceries with the Smart Cash card and then use Capital One Aspire for everything else and you’ll come out ahead.

      I’m not positive, but I think all Shoppers Drug Mart purchases are categorized as groceries according to MBNA. I know any Superstore or Wal-Mart purchases are coded as grocery.

      • SavingMentor says:

        That is correct. Shoppers Drug Mart is not categorized as groceries. I shop there a lot and have never received 3% cash back for them. For that reason I always use my travel rewards card when purchasing stuff at SDM.

  3. CF says:

    I keep meaning to get one of these but never make time for it :S. Thanks for the great analysis!

  4. Catherine says:

    For the PC mastercard are you looking strictly at cash back or PC point value? There is definite value in the PC point system, 20k points=$20.00 free groceries.

    • Echo says:

      @Catherine – I converted the PC Points to cash, which is pretty straightforward. With the PC MasterCard, you get the equivalent of 1% back in free groceries, whereas with MBNA Smart Cash you get 3% cash back on grocery spending.

      • SavingMentor says:

        PC MasterCard fans are pretty die hard. I have a friend who has one and although he’s bright and I explained the huge difference in cash back to him he still chooses to stick with the PC MasterCard.

        There is some attachment both he and his wife have to seeing the discount come right off their grocery bill that I can’t talk them out of :)

  5. farcodev says:

    Too bad, I already applied to the RBC Mastercard cash back two weeks ago, but anyway 2% is better than nothing, and far better than the RBC VISA rewards card…

    Great post btw! It’s very useful to see how we can reap the benefits from these cards ;)

  6. Richard Campbell says:

    FYI – Just talked to MBNA and the limit of $1250 on the 1% cash back is not in addition to the Gas and Grocery cash back.

    If you spend $1250 before any gas and grocery purchases no bonus given. If you spend $400 on gas grocery and then $850 on anything else you will have received the maximum points of 1650.. but you must max out gas and grocery first.

    So like you said, use the SmartCash card for Gas and Grocery only and another card for everything else.

  7. Brian says:

    A 2 part question for Echo/anyone else who may know the answer.

    Would prescription purchases at the Loblaws Superstore or Walmart qualify as “grocery” for the MBNA Smart Cash card, thus, giving 2% cash back?

    I spend about $300 on presecription medications, but then submit the receipt to the insurance company for a 100% refund. So in theory, if it is 2% cash back, would I potentially get $6 from the card, plus the $300 back from the insurance compnay? I assume there is no way for the credit card compnaies to know I pay upfront for my prescriptions then submit it for a full reimbursement.

    Thanks in advance for answering my question!

    • Echo says:

      @Brian – I haven’t bought prescriptions at Superstore, but everything else we’ve bought there has been classified as ‘groceries’ and we’ve received the additional cash back.

      I buy prescriptions at Safeway and I just checked my rewards tab and it looks like we get the additional cash back for those purchases.

      I also pay in full and then get reimbursed and there’s no issue with the method of payment that I use.

    • Waheed says:

      @ Brian – Yes, prescription purchases at the Loblaws Superstore qualify as “grocery” for the MBNA Smart Cash card, thus, giving 2% cash back. In addition, you would get 1% superbucks coupon. Total 3% discount for prescription purchases at Superstore.

      ONLY Walmart-Supercenter qualify as “grocery” for the MBNA Smart Cash card. I used to buy prescription drugs from Walmart but now I don’t.

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