Evaluating Travel Credit Cards

Note the bonuses mentioned here may be out of date but the analysis isn’t. You can look at the page Maximize Credit Card Points for Travel for in depth and up to date information on current offers.

There are a lot of different sites that compare credit cards but one thing I couldn’t find was some good advice on how to take advantage of signing up for cards just for their bonus points. Some sign-up bonuses require no minimum spend and so are “free points” assuming your credit score can absorb the hit (I’ll go on about that in another post later). Others require a minimum spend, and if you’re spending money on those, you aren’t earning points with your regular credit card which should be earning you at least 1.5c per $ (while the data here is focussed on Canadian credit cards the principles are the same elsewhere). Is it worth it to spend your money meeting a minimum spend on a card for the sign-up points? This is a sampling at a point in time but the principle can be applied with other cards.

This analysis assumes that one signs up for a card and only keeps it for one year to maximize the value of the sign-up bonus and any free for first year offer, and cancels the card before having to pay for a 2nd year. Some cards may be worth keeping but that’s being ignored for the purpose of this analysis. The only thing being looked at here is that one gets a card and makes the minimum spend (if any) required to get all the sign up points. One thing to take into consideration though is insurance when redeeming points. BMO World Elite is one of the few cards that provides rental car insurance and flight cancellation insurance if you pay only partially with your card or use points – most cards do not provide insurance if you use points. This is not a problem with cards where you book and pay, then claim back points later, but it can be when you need to book with points.

The table below has the following columns:

1) Card – the name of the card

2) The cost of the card for the first year. Some are $0 as at the time of writing they waived the first year fee.

3/4/5) The bonus for signing up. Some require a minimum spend ($500/$1000/$3000 in 3 months), others only one purchase, and the CIBC cards a bit of both. I am only counting points … if you want to factor in the value of airport lounge passes, trip insurance etc whose value will vary greatly by need then you can do the math and write your own blog add it in a comment! 😉 )

6) The total value of the bonus and the points from the minimum spend assuming you make the minimum spend. This assumes that Aeroplan, CIBC Aventura and RBC Avion points are worth about 1.5c per point. YMMV.

7) The “free value” column is the value of the sign-up bonus assuming you made 1 purchase but missed the minimum spend, minus the cost of the card.

8) The last column is the return on each $ spent. This is the value of the total points (minus card cost) if the minimum spend is met divided by the money spent to earn the points (not including card cost). This is a way of prioritizing spending … for instance the Amex Aero Gold card returns 91,5c in points for every $1 spent vs the business version that returns 14c in points for every $ spent (in fact all the cards except the TD Aero Infinite Privilege vastly outperform what you would pocket in points from your day to day card – that TD card would lose money, although it may have other benefits that are worthwhile) . The TD Aero Infinite returns $225 for every $1 spent assuming you just but $1 of stuff. This value needs to be seen in context as the CIBC cards would return the same value as the TD Aero Infinite if you don’t spend the $500.

Note … these tables assume that you get the referral bonuses which are available for some Amex cards (e.g. Amex Aero Gold is 20K bonus without referral and 30K with referral), otherwise the value may be less (you can consider this link for Amex Aeroplan cards or this link for Amex Gold/Platinum rewards cards to get the referrals, all of which I will get a bonus from – the links I provided for other cards I do not get any benefit from). Nor does this table assume any value you may get from making referrals with your Amex card (10K/15K) which can add to the value of those cards.

Aeroplan cards.

card offer deadline first year cost free bonus purchase bonus min spend total value free value return per $ spent
Amex GR unknown 0   25000 $500 $390 $0.00 0.78
Amex Plat unknown 299*(699)   60000 $1000 $619.75 -$299.00 0.6198
Amex Bus GR unknown 250   25000 $5000 $140 $0.00 0.028
Amex Aero Gold unknown (April 1 2014 for Distinction bonus) 0   30000 $500 $457.5 $0.00 0.915
Amex Aeroplan plus unknown (April 1 2014 for Distinction bonus)   5000   $1 $75.015 $75.00 75.015
Amex Aero Plat unknown (April 1 2014 for Distinction bonus) 499 25000 26000 1000 $266 -$124.00 0.266
TD Aero Inf Priv May 9 2014 399 25000   $1 -$24 -$24.00 -24
TD Aero Inf May 9 2014 0 15000   $1 $225 $225.00 225
TD Aero Plat May 9 2014 0 10000   $1 $150 $150.00 150
CIBC AeroGold Inf March 31 2014 0 15000 5000 $500 $311.25 $225.00 0.6225
CIBC AeroGold March 31 2014 0 15000 5000 $500 $311.25 $225.00 0.6225

* The fee for the Platinum card is $699 but each calendar year you get a $200 travel credit. If you get the card mid-year you can get two travel credits and cancel before the year is up … I used $299 as the fee. If you won’t use the credits the math works differently.

Note that the TD cards don’t advertize the first year free but if you call in or go to a bank you should get the card for free. I’ve had to get the people in the branch to phone Visa to verify that the first year is free. The May 9th deadline is for the bonus short-haul companion flight offer – the deadline for the 15K Aeroplan points and first year free is unknown.

Non Aeroplan Travel cards:

card offer deadline first year cost free bonus purchace bonus min spend total value free value return per $ spent
BMO World Elite June 1 2014 0  30000 + 4 lounge passes 0 $1 $300 $300 300.00
Capital One Aspire April 30 2014 $120 35000 + $75 0 $1 $305 $305 305.00
RBC Avion Infinite
unknown 0 15000** 0 $1 $225  $225 225.00
Scotiabank Gold Amex March 31 2014 0  15000 (+ $300***) 0 $1 $150 ($450) $150 ($450) 150.00 (450.00)
CIBC Aventura Inf March 31 2014 0 15000 5000 $500 $311.25 $225.00 0.6225
CIBC Aventura March 31 2014 0 15000 5000 $500 $311.25 $225.00 0.6225

**RBC Avion is free the first year if you have an Infinite card from another bank – there may be issues with customer service reps asking you to cancel your old card – hang up and try again. I’ve pegged the value of RBC points at 1.5c per point … like Aeroplan points there’s a huge variation in the value of those points. There’s a link above to a good summary article about this. You can convert to BA points, in the past with a 50% bonus from time to time. Fixed rate redemptions are 1c per point. Avion Air Travel Redemption Schedule can get you over 2c per point.

***Scotiabank is offering $300 on top of 15K to those with preapproval.

BMO points must be redeemed at a fixed rate when booking directly from BMO travel service.

Capital One Aspire World, Scotiabank and TD points can be redeemed after the fact on purchases from any travel provider via the card. Capital One has a tiered system that needs attention to maximize value, while Scotiabank and TD are at a fixed rate.

RBC points must be redeemed for RBC rewards with a variety of values or transferred to British Airways points.

CIBC Aventura points must be redeemed for flights from CIBC with a variety of values.

UPDATE: Added details about the TD first year free and deadline and on all card redemption options.

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