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Methodology: How we chose the best credit cards in Canada

Cory Santos

By Cory Santos

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Updated: September 10, 2024

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Money.ca rates all credit cards on a numeric scale of 1 to 5 stars, with 1 being the lowest and 5 the highest rating, respectively. But a lot more goes into our rating criteria, including a proprietary scoring formula designed to help you find the right card for your needs.

Why you can trust Money.ca

Money.ca’s proprietary scoring formulas break down the confusing language, complex points, rewards and earn rates to give you the real data that caters to your needs first, not ours. Our partnerships have no impact on our ratings, which are solely determined by the merits of each card.

Finding real value credit card value for the average Canadian

We continually collect, analyze and compare over 70 different data points for each card and category to help Canadians better understand the real-world value of each credit card. These data points are then weighed by category to help give you a clearer picture of how a particular card performs across a broad range of categories, from cash back to travel, interest rates to annual fees. By breaking down each card and calculating its real value across nearly a dozen categories, we can show how each card performs against the spending habits and expectations of the average Canadian. 

For example, the best travel cards should provide not only a strong earn rate on airfare, hotels, gas and more, but also travel and medical insurance coverage. Similarly, a good balance transfer credit card should focus on a long introductory APR period, a low rate after that, and modest fees. Because of this, the same card with the same benefits might score differently in different categories. 

Rewards value

We calculate the real-world rewards value by estimating the dollar amount a typical cardholder can earn in the first year using a card as their primary payment method. This calculation considers several factors, including:

  • Annual fee (and whether the first year is free, if applicable)
  • Earning scores for bonus categories
  • Rewards valuations
  • Welcome and anniversary bonuses

We determine earning scores for categories such as grocery, gas, travel, airline, etc. by converting the earn rate per $1 spent into actual dollars gained. We calculate the total reward potential using these data points and apply them to the latest quarterly household consumption expenditure figures from Statistics Canada.

  • Groceries: $500.00
  • Gas: $250.00
  • Drugstores: $150.00
  • Travel: $200.00
  • Restaurants: $250.00
  • Entertainment: $150.00
  • Recurring bills: $300.00
  • Retail store: $100.00
  • Local transit: $50.00
  • Other: $50.00

*Source: Statistics Canada

Instead of endless mile or point conversions and tricky rewards program language, we provide a real score based on real-world valuations to break through the confusion of credit cards to help you make an informed choice based on how a particular offer performs for the average Canadian. 

Overall value

Credit cards offer various benefits such as statement credits, retailer discounts, travel perks like airport lounge access, security fast pass services, hotel upgrades and insurance coverage—providing cardholders with even more value.

Money.ca's formulas consider all of these benefits and their dollar value to calculate their yearly worth. We then compare the costs and potential obstacles associated with holding the cards so you don’t have to do any mental gymnastics when trying to figure out what the best gas, grocery or other rewards credit card is right for you. These factors include:

  • Annual fees
  • APR (including any 0% introductory or promotional APR periods for new accounts)
  • Foreign transaction fees
  • Other fees, such as cash advance and balance transfer fees

By weighing the potential value against the costs, Money.ca determines the overall value of owning a particular card for the average Canadian consumer.

Additional credit card benefits

Some cardholder benefits can’t be quantified in dollars, but that doesn't mean they aren't valuable. Extra benefits such as airport lounge access, free checked bags when flying, or complimentary subscriptions to partnering programs will have different values depending on how often you use them. 

The Money.ca credit card ratings methodology carefully weighs these less tangible benefits to provide a better understanding of how much value these features provide to the average cardholder.This process takes the stress and mental math out of choosing your next credit card by providing a data-driven result based on the cash value of the benefits on offer and not just an endless list of confusing features you might not need.

Travel benefits

Travel perks are an intangible benefit for cardholders because not everyone will receive the same value, depending on their usage. A frequent globetrotter might save hundreds of dollars with free baggage, while the average commuter may never take advantage of that feature.

We collect data points and the cash value of these features and benefits to create a score that can be weighted. Evaluating these features and their value is critical to providing the full picture of a travel card's value for your lifestyle.

Credit card benefits we consider in the “travel benefits” category include:

  • Airport lounge access, both free or on a per-visit fee
  • Free checked baggage, including for guests on the same itinerary
  • Security fast pass services like NEXUS
  •  Priority boarding
  • Travel statement credits
  •  Free in-flight Wi-Fi
  •  Rental car discounts

Lifestyle benefits

Lifestyle benefits are another intangible. Some credit cards provide discounts when shopping with partnered brands like drugstores, gas stations, or grocery chains. Other cards might offer a complimentary membership to services like DoorDash or early ticket release parties.

While not an easy sum to calculate, it is an intangible benefit we carefully weigh when comparing card offerings. We evaluate the annual value of these benefits to better inform you of a card's underlying value.

Insurance coverage

Perhaps the most under-analyzed aspect of credit cards in Canada is insurance coverage. When researching what Canadians value most in cards after actually using them, surprisingly, insurance comes out as one of the most valued, yet least understood, aspects.

When it comes to insurance, it's important to consider the various types of protection offered by credit cards. These benefits can provide valuable peace of mind, from travel insurance and emergency medical coverage to purchase protection. Understanding the extent of coverage and any limitations can help you make informed decisions when choosing a credit card that aligns with your needs. Our formula breaks insurance down in an easy-to-understand way, sorting these protections into categories based on purpose.

These categories include basic protections such as extended warranty and purchase protections, travel insurance offering baggage delay, trip interruption/cancellation, car rental protection, and more. Additionally,  we consider factors like medical coverage which keeps you safe should the unforeseen happen on your next vacation or business trip. We also consider lifestyle protections like mobile phone insurance which provides real value to countless Canadians every day.

Scoring factors by credit card category

We judge each credit card category on its own merits, heavily weighing the critical factors and de-emphasising the irrelevant. This process helps break down cards of all rates, fees and eligibility requirements on equal terms to determine the best of the best based on hard data. 

Here are the scoring factors we consider for each card type:

Balance transfer credit cards

Our formula considers more than just the balance transfer offer. When determining our best picks, we also weigh the ongoing APR after the transfer period, transfer fees, annual fee, credit required, rewards value, insurance protections and issuer's brand value. These are the most critical aspects of balance transfer cards as they represent the cost of not only holding the card but also the existing credit card balance you need to pay down.

Cash back credit cards

Cash back credit cards for Canadians are evaluated based on various factors including the annual fee, welcome bonus, cash back categories (with spending caps), statement credits, additional benefits, interest charges and fees. Our selection process considers all of these critical factors to determine the cost of holding these cards to help you find the best options.

Gas credit cards

Gas rewards (including EV charging) are a vital category of credit cards for commuters, students, stay-at-home parents, and just about everybody else who regularly drives. Because of that we weigh the most aspects of gas rewards, such as welcome bonus value, rewards categories and spending caps, rewards potential, APR, introductory and promotional interest rates and more.

Grocery credit cards

Grocery rewards, like gas, are popular among Canadians. When searching for a new grocery store credit card, consumers tend to focus on things like the annual fee, the overall rewards potential, discounts, and bonuses.  Our team considers various factors including welcome bonuses, rewards categories and caps, rewards potential, APR, introductory and promotional interest rates, eligible brands and more. 

Low interest credit card

Low APR credit cards are similar to balance transfer cards but differ in interest rates and promotional APRs. We consider ongoing interest rates, fees and overall card ownership costs to help you find the best low-rate credit card.

No annual fee credit cards

No one wants to pay an annual fee, but is choosing a no-fee card always worth it? We examine the critical features Canadians want in an all-around credit card including insurance coverage, interest rates, rewards and more to find the card with the right balance of great features and a manageable (or no) annual fee.

Rewards credit cards

Our formula prioritizes the net value cardholders can anticipate from a rewards card in the first year. We compare rewards earn rates and real-world values to the soft benefits of rewards cards (statement credits, retailer discounts and other additional benefits) to show the rewards cards that offer value regardless of usage location.

Student credit cards

Student credit cards are similar to other basic rewards and no annual fee credit cards. However, students have specific concerns when choosing a card. Our formula prioritizes the annual fee, insurance protections (such as mobile phone insurance) and more to help students find the right offer that provides great benefits and a low annual fee.

Travel credit cards

Travel cards are a subset of credit cards with their own benefits and protections. They have welcome bonuses, earn rates, annual fees and benefits like airport lounge access or free first-checked bags. These factors help you determine if the annual fee is worth the value the rewards, benefits and insurance protections provide each year.

Best credit cards

You might think our overall best credit card score is a simple average of the card’s score across all categories, but you'd be wrong. Giving an average score can significantly improve the rankings of the card offers with the biggest welcome bonuses and highest earn rates but also the steepest annual fee. 

In contrast, the average Canadian is looking for the best all around credit card and not just the most stat-heavy. We place an emphasis on each card’s fees, interest rates, and rewards potential, and not just the first-year value that comes from a sizeable sign-up bonus or lounge access. This weighting provides a fuller picture of a card’s true value beyond the headlines.

Cory Santos Finance editor

Cory Santos is a finance writer, editor and credit card expert with nearly a decade of experience in personal finance. Cory joined Wise Publishing from BestCards, with bylines in numerous print and digital publications across North America, including the Miami Herald, St. Louis Post-Dispatch, Debt.ca, AOL, MSN and Medium as well as financial podcasts like KOFE Talk.

Disclaimer

The content provided on Money.ca is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.