Free Money? What Are You Talking About?

There are a few ways of making credit cards pay you. There is churning (cancelling a card, and applying for it again later to get another sign up bonus - for as long as they will let you get away with it); manufactured spend (purchasing things that are convertible back to cash - at a cost that is lower than the reward you get from your credit card - this is more of an American thing); there is simply going and getting the best sign up bonuses and leaving it at that (while cancelling the card before any annual fee, unless the card really works for you - try before you buy, if you will).


If you are new to this, the latter option is where to start. If you have a decent credit score and history, with no black marks, and no real need for amazing credit in the near future (say, two years maximum), then your credit rating can be used to help you, rather than help the credit card companies.


Offers come and go. Having a good score means you can jump on a good offer when it comes up. Being a hard core churner could lead to missing the occasional offer (because you already had that card or had just cancelled when the special offer came out).


What is a good offer? Well, simply, that the value of what you get for signing up is high. $500 is possible for a single card - perhaps not as cash, but as reward points. Many of these offers will also have the first year free (sign up bonuses on free cards are generally mediocre at best - not nothing, but not huge, either).


If you are going to make this into a 'serious hobby', though, it's worth figuring out what you want. Cash? That's likely less lucrative - it's more versatile, but offers are rarer. Airline points? You need to figure out how many points you're going for, and if you can get them all with a combination of sign up and spending. Flexible points are great, but are often not as flexible as you might like...


Let's take a few examples.

American Express Gold Rewards Card

Website link- sign up through Great Canadian Rebates for an extra $50 sign up bonus.


So, you get 25,000 "Membership Rewards" points for signing up for this card and spending $500. Plus $50 if you go through GCR, above. What does 25k MR points get you? At least $250 - you can redeem "against travel" directly on the Amex site. In other words, you go to your favourite travel site, buy something using this card, and redeem the points to offset the cost.


Easy! But wait - Membership Rewards is a flexible program, and using your points like this is probably the lowest value way to use them. You can transfer to Aeroplan, to BA Avios, Delta SkyMiles, Starwood Preferred Guest - the list goes on. Some people value Aeroplan at 2c each, twice as much as using the points directly with Amex!


You're looking at $300-550 in points. And with this card, it doesn't end there - you are covered for out of province emergency medical coverage, which is the most important as far as I am concerned - apart from, perhaps, car rental coverage, which is also included.


The card has a $150 annual fee. But the first year is free! You can take your time, evaluate the card, see if you like it... And if you don't, cancel it before the fee kicks in.


This card is comparable to, but arguably better than, the Scotia Gold Amex card. This latter card is a flat 4% in points on gas/groceries/restaurants, 1% everywhere else - but you must use the card to book travel (at 1%) in order to redeem. If you cancel, you lose your points. With the 'true' American Express card, you can transfer all your points out before cancelling. However, if you don't value any of the transfer partners as highly as 4% (remembering there are bonuses at various times), the Scotia card may be the winner - especially if you make sure to use it only on 4% categories if you have something better than 1% for elsewhere.


But, again - you can try this card before you buy (unlike the Scotia, which is no longer available FYF - boo!).


What do you have to lose? Well, one 'hard hit' on your credit file. That's it.

TD Aeroplan VISA Infinite

Website link - This card has also got a $50 rebate through Great Canadian Rebates, in addition to a total of 25k Aeroplan miles if you spend $1000. As I mentioned above, some value Aeroplan at 2c/each so another $550 if you value them that way.


I'm not as keen on this card as the Gold Amex card - the main plus is that it's a Visa, and while I love American Express (they have a 'global transfer' process where you can get a credit card in a new country based on your relationship with them, rather than the credit report you don't have in the new country - plus they backdate all account open ages to your first account), acceptance is simply not as good as with Visa and MasterCard.


Many places take Amex. But many do not - you can't get by with just an Amex. Alas.


Anyway, about this card - it has a lower earn rate than the Amex, remembering the Amex converts to Aeroplan 1:1 and a load of other types too - and you earn 2 points with the Amex at gas/grocery stores/restaurants. This Infinite Visa only gives 1.5 points per dollar on gas/groceries/drug stores, and 1 point elsewhere.


But again - first year free. "Why not both?" - signing up for the Amex AND the Visa will get you 50k Aeroplan points plus $100 in actual cash from GCR (in a few months!).


What does 50k Aeroplan points get you? Or rather, where? Quite a long way, apparently - a round trip to Hawaii, perhaps, or even a business class long haul flight within North America.


One downside of Aeroplan is that you must pay fees and taxes, but there are ways of minimising that (choose the right partner airline!).

Chase Marriott Rewards VISA

Website signup link - no GCR rebate, alas.


So, this is a hotel card. You get an 'e-certificate' plus a load of points, plus an upgrade to 'Silver Elite' status. Awesome. What does that mean?


Well, the e-cert is one night at a hotel, free. The points will get you a variable number of nights depending on the category of the hotel. Silver Elite means you get late checkout, and maybe some other perks.


But.. again.. first year free. That's 3-4-5 nights in a hotel, for nothing. Could you find something on AirBnB for less than the posted rate? Sure. On Expedia? Probably. But for less than nothing? Unlikely!


The other massive perk of this card is that it, like the Chase Amazon card, has no foreign exchange fee. If you don't like Amazon much, but do stay in hotels, this is likely a better card to get.


It has a $120 annual fee, but you get a free night every year, which almost-or-completely covers that fee, I'd say.


Using this card - well, it's not as lucrative as the Amex, that's for sure. Points can be converted to Aeroplan, but at a much lower rate, and the earn rate doesn't make up for it - 5x at Marriott group properties is the place to spend on the card. At restaurants, perhaps - but only if they don't take Amex (or, of course, you don't have an Amex with restaurant bonus!) - for 2x. Elsewhere, only 1x.


To be honest, it's not such a bad thing - there are *so* many cards with bonuses for gas/grocery spend, and you're only going to spend so much money there!