These are the four best travel rewards credit cards in Canada

Travelling can be expensive, even for frugal-minded globe trotters. Despite this, the post-pandemic “travel fever” is still in full effect, according to RBCs Thought Leadership Group.

From booking flights in advance to taking advantage of last-minute deals, there are plenty of ways to save money during your travels. However, one of my favourite hacks is to use a travel rewards credit card.

These cards allow you to earn additional cashback and rewards points for travel-related expenses, which can really add up at the end of a long vacation.

Today, I’ll share some of my favourite travel rewards cards so that you can put some extra cashback in your wallet!

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How do travel rewards cards work?

Travel rewards cards work just like any other credit card. After being approved for the card, you’ll be given a spending credit limit.

As you spend money on the card, you’ll have the opportunity to earn cashback, points, or air miles that can be redeemed for their cash value or applied to travel expenses like plane tickets, Uber rides, and more.

What makes a travel rewards card different from other rewards credit cards is that they typically offer greater rewards for travel-specific categories, such as:

• Dining out
• Transit expenses (cabs, trains, rental vehicles, etc.)
• Plane tickets
• Fuel
• Streaming services (for those long overseas flights)

Generally, using your card for these categories will allow you to earn more cashback or rewards points than other everyday expenses, such as groceries or retail shopping.

Additional travel perks

In addition to these cash rewards, some travel credit cards also offer useful perks that can enhance your travel experience, such as:

• Free travel insurance for cardholders
• Free mobile device insurance (great if you lose your phone overseas)
• Complimentary access to exclusive flight lounges
• Free or low-cost upgrades on hotel rides and rental vehicles
• Priority seat selection on planes and trains

These additional perks are more common for travel rewards cards with an annual fee, which is how the card companies justify the additional fee. Travel rewards cards with no annual fee typically don’t offer as many bonus perks.

Top picks: travel rewards credit cards

Now that you know a little bit more about how these cards work, here are a few of my favourite travel rewards credit cards.

1. American Express Cobalt Card

• Annual Fee: $12.99 per month ($155.88 per year)

If you’re looking for a great all-around travel rewards credit card, the AMEX Cobalt card is definitely worth looking into.

While it comes with a $12.99 monthly fee, it offers several perks and benefits, including mobile device coverage, 1:1 points exchange with most global frequent flyer programs, shopping coverage, and even free room service/amenities at select hotels.

The Cobalt card also features considerable cashback rewards:

• 5x points on dining out
• 3x points on streaming services
• 2x points on travel and transit
• 1x points on all other categories

A thousand points is equivalent to a cash value of $10. If you’re using the card frequently for dining out, the monthly fee should pay for itself. Technically, you’d only need to spend about $260 on dining out to earn $13 worth of cashback points.

2. BMO AIR MILES Mastercard

• Annual Fee: No

If you’re looking for a no-fee travel rewards card, the BMO AIR MILES Mastercard could be a great fit, especially if you’re a frequent flyer. Cardholders will earn 3x miles when shopping with AIR MILES partners, including Shell, Budget, Samsung, Alamo, and National Car Rental, and 2x miles at participating grocery stores.

If you want to get the maximum value from your miles, you can redeem them for plane tickets and travel expenses through the AIR MILES program. However, you can also use points to purchase select merchandise (such as Samsung phones) or exchange them for cash value.

3. KOHO Premium Prepaid Mastercard

• Annual Fee: $84 per year (30-day free trial)

The KOHO Premium card comes included in the KOHO Extra plan, which includes:

• Optional credit-building feature for $7 per month (instead of the usual $10 per month fee)
• Unlimited e-transfers
• 2% cashback on groceries, eating, drinking, and transit
• 5% cashback on all other categories
• 6% cashback with selected merchants
• No foreign exchange fees

The KOHO Premium card isn’t a credit card but rather a prepaid debit card.

However, it offers rewards that are comparable to what you’d get with a travel rewards credit card. Plus, the card doesn’t have any additional foreign exchange fees, making it a great card for those who frequently travel outside the country.

Additionally, you can use KOHO’s credit-builder service to start building your credit history. For a small monthly fee, KOHO will report on your credit that you’re paying off a small “personal loan,” which will help you build a positive payment history.

4. TD Aeroplan Visa Infinite Card

• Annual Fee: $139

The Aeroplan loyalty program was created by Air Canada in 1984, allowing members to earn points and rewards every time they fly with Air Canada or its affiliated network of airlines. Aeroplan is also a member of the global Star Alliance network, and Aeroplan members can earn and redeem points on all 26 of Star Alliance’s airlines.

The TD Aeroplan Visa Infinite Card allows cardholders to take advantage of Air Canada benefits, such as checking their first bag for free and the ability to fast-track their progress to achieving Aeroplan Elite status.

The card offers 1.5x points on eligible gas and grocery purchases, 2x points with Aeroplan’s 150+ partner brands, and 1x points on all other purchases. If you link your TD Aeroplan card with your Starbucks app, you can also earn 50% more points when you buy coffee through the app, which really helps with those late-night red-eye flights.

Getting the most from your travel rewards card

Each travel rewards card offers different perks and cashback rewards for certain categories. To get the most from your card, I recommend choosing a card that offers a high cashback percentage or points for categories that you frequently spend on.

This will allow you to accumulate cashback and earn points quicker so you can cash in on your rewards. Many cards also offer sign-up bonuses and incentives that allow you to earn even more points within the first few months or a year of ownership.

If you play your cards right, you could save big on your next vacation or even fund it for free.

Written for Daily Hive by Christopher Liew, a CFA Charterholder, former financial advisor, and the creator of Wealth Awesome.