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Our VerdictThe BMO CashBack World Elite Mastercard boasts the highest cash back rate in Canada on grocery purchases, offering you 5% cash back on your grocery haul. And, since it also offers good cash back rates on other practical spending, like gas and transportation, this card has the potential to earn substantial cash back for you on a yearly basis. Considering that inflation has us all watching our budgets, the reward potential here may just be well worth the $120 annual fee.
That said, is this card really worth switching for? We break it down and compare it to its cash back competitors.
Our ratings take into account the card’s rewards, fees, rates along with the card’s category. All ratings are determined solely by our editorial team.
Annual Fee $120 (waived in the first year) Credit Score description Good/Excellent Regular APR (Purchases) / Regular APR (Cash Advances) 20.99% / 23.99%This card offers cash back on a number of everyday purchases, but its real draw is its earning potential for groceries. You earn 5% cash back on groceries, which is the highest overall offer out of all the comparable cards in this category. The Scotia Gold American Express does offer 6% cash back on groceries, but only at certain stores, such as Sobeys, IGA and FreshCo., so this card still offers the highest cash-back rate on all grocery purchases. Considering that food prices have gone up 5% to 7% in 2022 due to inflationary pressures, the BMO CashBack World Elite Mastercard is a very appealing credit card that can be incredibly useful to most Canadians.
However, it should be noted that 5% applies on the first $500 spent on grocery purchases per statement period and then groceries revert to 1% unlimited cash back thereafter. Given that the annual food expenditure for a family of four is estimated at $1,230 per month, it’s easy to max out the 5% cash back on the first $500. At least you’ll earn 1% cash back on the remaining $730.
You’ll also earn 3% cash back on gas on the first $300 spent on vehicle fuel or electric charging purchases per statement period and 1% unlimited cash back thereafter. You’ll earn a hefty 4% cash back on transit, which includes ride shares, taxis and public transportation, again on the first $300 spent on ground transportation purchases per statement cycle period and 1% unlimited cash back thereafter. In addition, you’ll earn 2% on recurring bills, such as phone bills, gym memberships and streaming services.
If you use this as your everyday credit card (and pay it off every month), it’s easy to earn cash back on basic expenses, like monthly groceries, gas and reoccurring purchases.
As for other benefits, the card offers 1% cash back on all other purchases; a saving of 25% at rentals at participating Alamo and National Car Rental locations; 24-hour access to Mastercard’s concierge staff and access to airport lounges. Plus, you can earn more cash back if you add another cardholder for $50 a year.
In terms of rewards offered, this card is close to similar cards out there, like the CIBC Dividend Visa Infinite.
The rewards associated with this card do not expire as long as your account is open and in good standing. You can redeem the cash back in two ways: when there’s a set amount available up to a minimum of $25 (which can be redeemed in increments of $5 or as a one-time lump sum that requires a minimum cash-back balance of $1). That’s pretty flexible, as you can redeem cash back as regularly as you want with a relatively low limit.
Redeeming rewards requires you to log into your BMO Mastercard account. You have the option of depositing the cash into a BMO chequing or savings account, putting it in an InvestorLine account or using it toward your credit card balance.
The real value of a cash back card is based on potential annual earnings. We did the math for you by calculating what the average Canadian spends every year for each CIBC Dividend Visa Infinite cash back category. Forbes Advisor uses data from multiple government agencies in order to determine both baseline income and credit card spending averages across various categories.
Forbes Advisor estimates the total annual credit card spending to be $27,851.70. Of that amount, grocery purchases add up to $7,536 annually, earning $315.36 in cash back. We factored in the $500 per month spending cap to get this figure, earning 5% for the $500 a month and 1% thereafter. Gas amounts to $3,360 annually — earning $100.80 in cash back at the 3% rate. Recurring bills add up to $2,436 — earning $48.72 at the 2% rate.
From there, other purchases (like dining, entertainment, online purchases. airline tickets, hotel stays and miscellaneous spending) make up the remaining $14,529.70. Assuming you earn the 1% base rate on those, this adds another $145.19 to your yearly cash back. All of this brings the grand total for yearly earnings to $610.07. Once you factor in the $120 annual fee, this card earns $490.07 in net cash-back earnings per year, and potentially more on top of that, if you spend on public transit or ride sharing frequently, since that purchase category alone earns an impressive 4% cash back.
Compared to similar cards, such as CIBC Dividend Visa Infinite Card at $537.50 annual earnings, Scotia Momentum Visa Infinite Card at $491.14 annual earnings and SimplyCash Preferred Card from American Express at $655.07 annual earnings, the BMO CashBack World Elite Mastercard looks pretty middle-of-the-pack, despite its flashy 5% grocery cash back rate.
Overall, the card has a decent rewards program. After all, it’s easy to earn over $400 in rewards solely by using it for groceries and gas. With that kind of rewards potential, we think it’s worth paying the $120 annual fee.
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