I’m sure I’m not alone in this experience: you’re rushing to pay for something, and suddenly you’re wondering if you’ve used the right credit card. Many times I have made the mistake of using the wrong card.
By using the wrong card, I mean not using a card that will maximize my earnings at a certain cost. Many credit cards offer multipliers, or more points, in a specific category of costs, which means that one credit card may outperform another depending on what you are buying.
Not all of them are easy to remember, so in this series, let’s get started How To Increase Your Earnings By Using Credit Card Multiplier
In Part 1, we will focus on the cards issued by American Express, while in Part 2 we will look at the cards issued by other banks.
For simplicity, we will only focus on Canadian cards as opposed to cash back cards or other types of point currencies that earn airline point currencies or their equivalents.
Start with your goal
Before dealing with the cost multiplier, one has to consider what kind of point currency or coin you want to deposit. If you’re not sure, start by asking yourself a few questions:
- Where do I want to travel?
- Which airline do I want to travel with?
- What point currency can I use for my redemption?
If you don’t know where to start, a website like FlightConnections is a great place to start.
First, choose your destination or source to see which airlines fly in and out of each. Next, figure out which currency they can use as part of an alliance or for that particular airline.
Once you’ve figured it out, the next questions are:
- Which credit card do I want to earn point currency?
- Where will I spend my money?
- Is there a card that earns the point currency I want that offers multipliers for my expenses?
Demystifying cost section
Below is a list of the most common categories of costs that credit cards offer multipliers
- Dining, beverages, Food delivery. This section will include your restaurant, coffee shop, Uber Eats and DoorDash.
- Grocer. Who doesn’t spend money on groceries? Keep in mind that some cards include grocery stores as part of eating and drinking, others do not.
- Travel. If you follow the Prince of Travel, you are bound to spend for it. This includes flights, hotels, car rentals, cruises and even tours.
- Transport and gas. Some cards only offer multipliers on gas, others offer multipliers for use in rideshare services, buses, taxis and public transport.
- Office supplies and electronics. This will include but not limited to stores like Apple, Best Buy and Staples.
- Drugstore. This usually includes individual drug stores such as Shoppers Drug Mart and Rexal. It does not usually include pharmacies located within a large organization, such as a pharmacy located inside a grocery store or within Costco.
- Streaming subscription. These are increasingly popular and include Netflix, Disney + and other such services.
- Entertainment. This category usually includes movie, theater performances and sales of ticket agencies. I thought theme parks might be included in this category, but it doesn’t show up Maryland did not code as entertainment.
As you can see, many of the things we spend money on every day can earn you extra points – If you have the right card and use it.
Which card should I use?
An important factor in all of this is that credit cards are accepted by your merchant. In Canadian card games, it often becomes clear whether they take Amex.
If they do, it’s great news, because there are plenty of earning opportunities out there. If they don’t, stay tuned for the next post on other possible options.
Amex cards earn their own point currency, known as Membership Rewards (MR) points. The Canadian-issued Amex MR points can thus be transferred to six different airline loyalty programs, making it one of Canada’s most valuable point currencies.
Meanwhile, co-branded Amex cards will earn their authorized partner’s currency. In Canada, there is only one airline with an Amex co-branded card: Air Canada.
Now let’s take a look at which Amex cards offer multipliers in a specific category of cost If not indicated, sPend in all other categories can be assumed to earn one point per dollar otherwise.
American Express Platinum Card
American Express Gold Rewards Card
American Express Green Card
American Express Cobalt Card
American Express Business Platinum Card
American Express Business Gold Rewards Card
Everything else, if you spend $ 20,000 per calendar quarter
American Express Business Age Card
Office supplies and electronics
American Express airplane card
American Express airplane reserve card
American Express Airplane Business Reserve Card
Travel (hotel and car rental)
Cobalt cards are a solid card for dining, drinks and groceries. No other card in this category earns you 5x points (up to বছরে 30,000 a year), and some people have reported earning 5x outside of Canada.
Depending on how much you spend on this segment, it can easily offset a monthly fee of less than $ 12.99. In addition, it is the only MR-earning card to provide a multiplier for streaming subscriptions.
The Business Platinum Card is great for everyday expenses because it earns 1.25x everything.
However, if your business can cost exactly $ 20,000 per quarter per year, then the Business Gold Card is a solid option as well as thanks to the quarterly bonuses of 10,000 MR points to reach the cost threshold, especially since its annual fee is lower than that. Business Platinum.
If you only want to collect Airplane points and initially fly with Air Canada, the Airplane Reserve Card will give you a minimum of 1.25x points per dollar for all non-category costs, among other factors. In terms of business, the Aeroplan Business Reserve Card shares the same 1.25x non-category cost factor.
If your business has a lot of electronic or office supply costs, consider the Business Edge Card, which is the only card to offer multipliers in this category and has an annual fee of less than 99.
If travel for work or leisure makes up a large proportion of your expenses, then Gold Rewards Card Used Must be a solid card for travel with a multiplier of 2x.
The Platinum Card is now earning 2x more on travel, but with better travel insurance and an annual 200 travel rebate, it’s a bit of a toss-up. – Which brings us to the next point.
The chart above assumes that you have all the Amex cards and have to choose between them based on multipliers only. However, the reality is that you may or may not have one, two or more Amex cards.
Before deciding which card is best to keep based on class expenses only, consider the rate of earnings, the annual fee you are paying for the card, and the additional cost of the additional benefits that come with it.
For example, the rate of return on food on a platinum card is only 3x compared to 5x on a cobalt card. However, the Platinum Card includes higher insurance policies, priority pass lounge access, elite status with several hotel chains and a $ 200 annual travel credit, where Cobalt does not.
For all these additional benefits, you pay an annual fee of $ 699 for a Platinum card, whereas you pay $ 155.88 (99 12.99 per month) annually for a Cobalt card. Which you invest in will depend on your personal expenses and travel habits.
I personally think it’s worth keeping both, but if cost is a factor, you may have to decide between one or the other.
Ultimately, the value of each card for each person must be determined by the advantage of its multipliers, which card they should have, keep, and use, and what is best for one may not be good for another. And don’t forget the value of your sign up bonus.
Merchant category code
I want to quickly explain the Merchant Category Code (MCC) and why they are important.
After a while, you can expect to get a multiplier on a purchase because you think a merchant falls into one of the above categories, but the multiplier does not come. This could be because the merchants have registered themselves under a different type of business than you expected.
All merchants are required to register their business under an MCC An MCC is a number that identifies the type of business a trader engages in and is used by credit card companies when issuing multipliers.
For example, the MCC of a restaurant is “5812” If you eat at a merchant who mainly caters but serves food side by side and does not get multipliers, it may be that the merchant has classified himself as a caterer with MCC “5811”, rather than a restaurant. In this case, you will not find the restaurant multiplier.
Hopefully after reading this you will grab the right Amex card to pay for your next purchase. Even though you know which card has the best class factor, you still have some work to do to see which card has the best cost-benefit ratio.
If you still can’t keep track of it all, feel free to bookmark this post for future reference.
However, we know that American Express is not always accepted by certain merchants, so stay tuned for a post in the near future about the multipliers of non-Amex cards and how they can play a role in this decision making process.