The eternal question: should you earn travel points or cash back? We run the real math for Canadian spenders. Updated March 2025.
Points win — but only if you use them well. Travel points can be worth 2–4x more than cash back if redeemed for premium flights. But if you redeem poorly (statement credits, merchandise), points are worth less than cash back. Cash back always delivers its face value and is universally useful.
The right choice depends on your travel habits, willingness to optimize redemptions, and patience to accumulate points before spending them.
| Card/Program | Earn Rate (Food) | Point Value (Simple) | Point Value (Best) | Effective Return (Best) |
|---|---|---|---|---|
| Amex Cobalt (MR pts) | 5x | 1¢/pt | 2.5¢/pt (Air Canada biz) | 12.5% |
| TD Aeroplan VI | 1.5x | 1¢/pt | 2.5¢/pt | 3.75% |
| RBC Avion VI | 1.25x | 1¢/pt | 2¢/pt | 2.5% |
| Rogers Red (cash back) | 1.5% | 1¢/$ | 1.5¢/$ (fixed) | 1.5% |
| Scotia Momentum VI | 4% | 1¢/$ | 4¢/$ (fixed) | 4% |
Let's compare a high-grocery spender ($1,000/month on groceries) over one year:
| Card | Annual Fee | Points/Cash Earned | Value at Low Redemption | Value at High Redemption |
|---|---|---|---|---|
| Amex Cobalt (5x MR) | $156 | 60,000 MR pts | $600 − $156 = $444 | $1,500 − $156 = $1,344 |
| Scotia Momentum (4% cash) | $120 | $480 cash back | $480 − $120 = $360 | $480 − $120 = $360 |
At a low redemption rate (1¢/pt for travel portal), the Cobalt produces more value. At a high redemption rate (business class transfer at 2.5¢/pt), the Cobalt dramatically outperforms. Scotia Momentum is consistent but capped.
Many sophisticated Canadian spenders use both: a points card for categories with high earn rates (e.g., Amex Cobalt for groceries and dining) and a flat-rate cash back card (e.g., Rogers Red) for everything else. This captures the upside of premium point redemptions while not losing value on uncategorized spending.
Example combo:
This pair covers virtually all spending optimally — the Cobalt for food, Rogers for everything else including international purchases.
KOHO earns cash back on groceries and transit with no credit check or annual fee. Once you've built credit, you can decide between points and cash back cards with confidence.
Try KOHO — Code 45ET55JSYABeyond the math, there's a behavioral dimension to the points vs. cash back question. Research consistently shows that consumers spend more freely with points-based rewards than with cash back — the abstraction of "points" feels less like spending "real" money. This can work against you if you're not disciplined: earning 5x points on a restaurant visit feels great, but if it's causing you to dine out more frequently than you would otherwise, you're spending more than you're earning in rewards.
Cash back has the opposite effect for many people: seeing "$1.50 back on this $100 purchase" makes the reward feel concrete and the spending choice more deliberate. If you find that points programs lead to more spending, the psychological argument for cash back is compelling regardless of the theoretical maximum value from optimal point redemptions.
One underappreciated risk of points programs: expiry. Aeroplan points don't expire as long as you earn or redeem at least once per 12-month period — relatively easy to maintain. Avion points expire after 24 months of complete inactivity. Amex Membership Rewards points don't expire while your card is open. BMO Rewards points don't expire if your account is active. However, inactive accounts or card cancellations can trigger point forfeiture. Cash back, being a financial instrument credited to your account, doesn't expire and isn't at risk from account closure in the same way — statement credits are permanent adjustments to your balance.
One area where points decisively beat cash back is family travel optimization. Aeroplan, Avion, and Amex Membership Rewards all support some form of point pooling or family transfer — allowing household members to combine their accumulated points into a single redemption. A family of four each earning 20,000 Aeroplan points per year can pool 80,000 points for a single family vacation redemption — covering all four seats at a value potentially worth $1,200–$2,000+ in flights. Cash back simply accumulates as individual statement credits and can't be pooled across cardholders for amplified value in the same way.
Many Canadians start with cash back cards (simple, transparent) and transition to points programs as they learn more and begin traveling internationally. The transition doesn't require abandoning your existing cards — simply add a points card to your wallet and use it for the categories where it excels, while keeping your cash back card for everything else. Over time, you'll naturally gravitate toward whichever approach you actually use and value, and you can simplify by keeping only the cards that earn you meaningful value.
If you decide to transition away from points entirely (too complex, lifestyle changed, no longer traveling), don't simply abandon your points. Transfer them to a program with a concrete redemption (Aeroplan points can be used for Air Canada gift cards or merchandise if you don't want flights), or make one final redemption before closing the account. Points held in a closed account are typically forfeited immediately — always redeem before canceling.
The bottom line: the best rewards strategy is the one you actually execute. A cash back card that earns $300/year consistently beats a points card with theoretically higher ceiling that you never optimize — because real money in your bank account is worth more than theoretical points value that never materializes into a redemption. Start with what's simple, then optimize as your confidence and interest grow.