Many families use credit cards as part of their everyday life. This shouldn’t surprise anyone, as managing your budget often requires using credit. As long as you’re paying the entire balance off by your due date, you’re essentially getting an interest-free loan. Best of all, if you have a rewards credit card, you can earn points or cash back.
The rewards you earn can be essential since they have real value to them. Whenever you redeem your rewards, you’re essentially putting money back into your pocket. However, some people don’t realize that every credit card is different, so having the right one can have a significant impact on your bottom line.
Grocery store credit cards
For many families, groceries will be their largest monthly expense. For that reason, you may want to pay extra attention to where you shop. Loblaws-owned grocery stores, such as Loblaws, Superstore and No Frills, use PC Optimum as their loyalty program. With Empire-owned stores, including Sobeys, Foodland, and IGA, Scene+ is their loyalty program.
Both Scene+ and PC Optimum have credit cards where you’ll earn more points when you charge purchases at their grocery stores. Without a co-branded credit card, you’d only earn points on in-store and targeted offers. In other words, if you want to save on groceries, you should get a credit card that’s co-branded with your store’s loyalty program.
That said, there’s another consideration. The American Express Cobalt Card earns you 5 points per dollar spent on groceries, food, and drinks. That means you’ll earn 5% back in points at any grocery store that accepts American Express. This can be convenient since you don’t have to be loyal to a single loyalty program or store.
Travel credit cards
The demand for travel has increased significantly as of late. As a result, flights and hotels have skyrocketed in price. To help you deal with these increases, a travel rewards credit card could be helpful. For example, if you look at the list of the best metal credit cards in Canada, they’re all travel related.
If your goal is to travel for less, you should try to pick one or two travel credit cards that will help you achieve your goals. For example, if you read my Amex Platinum Canada review, you’ll quickly learn that the welcome bonus is typically worth about 100,000 American Express Membership Rewards points. In addition, you get unlimited lounge access for you and a guest, hotel loyalty status and more.
While some people may not like the idea of paying $699 annually for a credit card, you do get an annual travel credit of $200. That effectively makes your annual fee $499. More importantly, you can transfer your American Express Membership Rewards points to Aeroplan at a 1:1 ratio. Since one Aeroplan point is worth about $0.02, your welcome bonus could easily be worth $2,000. That’s clearly worth more than the annual fee.
Admittedly, the value of the credit card is in the points you get in the first year. Many people will keep the card for about 11 months and then cancel it before their second annual fee posts. They would then apply for a different card that has a generous welcome bonus.
Store credit cards
Generally speaking, store credit cards are very niche and don’t offer huge benefits. That said, most store credit cards have no annual fee and may come with one or two niche benefits that could help you save big.
The Triangle World Elite Mastercard is a good example. Triangle Rewards is the loyalty program of Canadian Tire, and its corporate-owned stores including, Party City, Mark’s, Sport Chek and more. Even if you don’t shop at any of those stores, getting the card could be worth it since you get a Roadside Assistance Gold Plan as a free benefit. This plan typically costs $99.95 a year and allows you to cover an individual or a vehicle.
Another often overlooked card is the Walmart Rewards World Mastercard. When using this card at walmart.ca, you’ll earn 3% back in Walmart Rewards. This matters since walmart.ca rivals Amazon and often has lower prices. By paying with the Walmart Rewards World Mastercard, you’d be maximizing your return. Note that purchases made at physical Walmart stores in Canada only earn you 1.25% back in Walmart rewards.
Using credit cards as a family
To optimize your points strategy, you need to get the entire family involved. Well, maybe not the kids. The easy solution is to get a supplementary card for your partner. By doing this, you’ll both be earning points on every purchase. The points earned go into the primary cardholder’s account.
Another strategy is to have each partner in the family get their own credit card under their own name. However, you could focus on a program that allows you to share your points. For example, Aeroplan has multiple credit cards, and you can set up family sharing plans where your points are pooled. If each partner gets a card, they’d each be eligible for the welcome offer. This is a quick way to rack up some points. In addition, since each person has their own credit card, they’d each build their credit score.
The bottom line
Every credit card and loyalty program is different. In an ideal world, you want to collect points that you find valuable and allow you to save money. In addition, having a co-branded credit card is essential since it’ll allow you to earn points on every purchase.
Even if you’re comfortable with the loyalty points you’re earning and the credit cards currently in your wallet, it’s worth investigating your options. A simple switch could mean big savings for your family.
Barry Choi is a personal finance and travel expert at moneywehave.com.He makes frequent media appearances where he talks about all things related to money and travel.
