I never thought I would look at a cash back credit card this way, but I am essentially earning cash from my spending and it is by no mean a small amount. In fact, if I compared the cash back from my Scotia VISA Momentum card, I earn more than twice what my highest dividend stock is paying me (see table below). When I look at dividends, I focus on the income my assets are generating. How is that different from a cash back credit card? I get paid once per year like a special annual dividend.
I have had this card for 2 years now and I love it. It’s funny how getting cash back feels different from rewards. The ability to have cash back really changes how it’s valued. Pretty much everything goes through this card for us. I am one of those customers who will use it for a small amount of money without abusing small shops. Obviously, the cash back is relative to how much you spend. We are a family of four and expenses add up over the year. We don’t spend frivolously but it adds up and now I can get some of it back.
How To Use Your Cash Back
You may be inclined to use cash back as a bonus gift to spend. In fact, you may have already spent it in your mind… Why? Look at it as an investment opportunity! You already spent the money and paid the bills.
Just like you should reinvest your RRSP tax refund for maximum results, you should just invest your cash back. Especially if you treat it like dividends. If you plan your budget and don’t include your RRSP tax refund and cash back in your spending, then you have all this money to re-invest.
Related: How To Maximize Your RRSP
Scotia Momentum VISA Infinite
I grew tired of the rewards and travel cards. For once, airline websites are really convenient to shop and research. Having to call a company and going through that process over the phone was not as convenient. Since I have to travel long distance, the airline point cards took a really long time to accumulate. As for the rewards points, I always found the rewards a ripoff. The only rewards I would get were movies or cash cards. See a pattern here with the cash cards?
When I saw I could get 4% on my gas and grocery purchases with the Scotia Momentum VISA Infinite card, I was hooked! You saw above how much I earn in the 4% category. Both fuel and grocery account for a large amount. Not only am I free to fill up anywhere, I can also use another reward points card at some gas station. I use Air Miles at Shell whenever possible since I can use it as cash as well.
Benefits of Scotia Momentum VISA Cash Back:
- A full 4% cash back on all eligible gas station and grocery store purchases
- A full 2% cash back on eligible drug store purchases and recurring bill payments
- A full 1% cash back on all other eligible purchases
Cost of the card is $99 for the primary card and $30 for the secondary card. You remove that from your total cash back and you don’t see it 🙂 If you are fee averse, you need to do the math.
Best Cash Back Credit Card
Have a look at the table below. I have quite a significant amount of money invested and I still manage to earn a large amount from this exceptional cash back credit card. All I have to do is simply use my Scotia Momentum VISA everywhere I go.
|VISA Cash Back||$905.11|
It’s all a matter of perspective. If you treat cash back like a dividend, you’ll put that money to work for you. Think about it, how many sources of income do you have to invest?
- Your regular pay with regular contributions
- Your tax refund (it should really be re-invested. Pick the TFSA or RRSP)
- Your cash back from credit cards
- Other passive income can be added to the list
Readers: Are you ready to treat cash back like a special annual dividend?