The newcomer’s guide to credit card rewards

In today’s pricey world, many people are turning to credit card rewards — like cash back or discounts — to help make life more affordable.

But if you're new to Canada, understanding how rewards credit cards work in this country and how to choose one can be a bit tricky at first. Read on to learn the basics of rewards credit cards and how you can choose the best one for you.

A rewards credit card is a type of credit card designed to reward your spending habits.

Not all credit cards give you rewards when you use them. But the ones that do offer a way to earning perks and helping you maximize your everyday spending.

Credit card rewards are the perks or benefits that credit card companies offer for using your credit card. For instance, you may get cash back for each purchase you make, or earn points you can exchange for gift cards, flights or hotel stays.

Just remember to use the credit card responsibly — which means paying off your credit card balance on time to avoid debt and interest charges.

Understanding how your card’s rewards system works helps you make the most out of your spending and get the best rewards for your money. For each rewards credit card, there are rules about the amount of rewards you earn and how you can use them later.

Earning rewards is simple: Use your rewards credit card when you shop. For instance, Scotiabank offers credit cards that allow you to earn Scene+^TM points or cash back on every eligible purchase.

Some cards give you extra points or cash back for buying things in certain spending categories, like at grocery stores or gas stations. If a lot of your budget goes toward certain spending, you can rack up the points faster by using the right rewards credit card. Use our credit card rewards calculator to estimate how much you might earn with Scotiabank’s rewards credit cards.

When you’re ready, you can redeem your rewards, such as money back on your credit card statement, gift cards, merchandise or even for covering travel expenses. How you are able to redeem your rewards will vary by the credit card and reward program. Here are a couple ways you can redeem with Scotiabank’s credit cards.

For example:

• With the Scotia Momentum® Visa* Card that earns cash back rewards, your cash back builds up each month as you spend and you get a payout once a year. You earn cash back throughout a year, starting with your December statement and ending with your November statement the next year. At the end of these 12 months, whatever cash back you’ve earned appears as a credit on your November statement or you could choose to deposit to your checking or savings account.

For credit cards that earn Scene+ rewards, Scene+ rewards are earned on all of your everyday purchases but can be redeemed at any time. Just log in to your account online or on the app, and you can choose what rewards to redeem with your points. Your choices include travel, gift cards from 60-plus brands, tech, entertainment and even account credits on certain Scotiabank products. Note that in some cases you may need a minimum amount of points to redeem certain rewards. For example, as little as 1,000 points for $10 gift card to Sobeys, Safeway, FreshCo, Foodland and more. 

To qualify for a credit card in Canada, you typically need a good to excellent credit score — and that tends to be above 660 (some premium rewards cards may require a higher credit score). That can pose a problem for newcomers, since you have no credit history in Canada.

But with the Scotiabank StartRight^® Program, newcomers can apply for a range of credit cards with no credit history, including rewards cards. If approved, with one of these options, you can earn perks as you build credit in Canada.

Yes, newcomers to Canada can apply for rewards credit cards if they meet the eligibility requirements. These vary by credit card — through the StartRight program, newcomers can qualify for different credit card options, including some with higher limits. But the important thing is to apply for a card and use it to help build your credit history as soon as you can. If you need help, book an appointment with one of Scotiabank's multilingual advisors who can help you apply for the right credit card for you. 

A welcome or sign-up bonus is a one-time special gift credit card companies sometimes offer to new cardholders in their first year. You can get bonus points, rewards or cash back as a “thank you” for signing up for the card. To get bonus points or rewards, you often need to make a certain amount of card purchases within a set timeframe.  For example, with the Scotiabank® Scene+™ Visa* Card, you can earn bonus Scene+ points within the first 3 months that you sign up. Learn more here.  Once you hit the spending target within the set timeframe, the bonus points or cash back are added to your account. These welcome bonuses can be very appealing, and it can be tempting to overspend to earn them. But make sure you only spend enough to qualify without going overboard and getting into debt.

With cash back rewards credit cards, you get a percentage of your spending back in cash . For example, if you spend $100 and your credit card offers 1% cash back, you get $1 back on that purchase.

The earn rates on cash back cards vary but give you extra cash back for certain types of spending. For example, the Scotia Momentum® Visa Infinite* Card offers 4% for every $1 spent on grocery store purchases, monthly bill payments and subscriptions. Spending $1,000 on eligible purchases would earn you $40 cash back in a year.

If you wanted to build up to having the Infinite card, you can get started by applying for the Scotia Momentum® No-Fee Visa* Card, or Scotia Momentum® Visa* Card (at an affordable annual fee), build your credit history and then "graduate" to the Scotia Momentum Visa Infinite Card that offers a higher earn rate but with a higher annual fee.  

Points credit cards give you rewards for every dollar spent. You collect these points over time and then exchange them for certain rewards when you've earned enough. Some cards give you extra points for certain spending categories, like groceries, dining out or food delivery. 

Scotiabank Scene+ credit cards give you a lot of freedom to choose how to cash in the points you've earned. They have a wide range of options, such as entertainment, movies, travel purchases, shopping, dining out and banking.

With Scene+ Points for Credit, you can make any purchase with your eligible Scotiabank credit card that earns Scene+ points – from gas to groceries– and use your Scene+ points to offset the cost later. Learn more about how here. If you're a travel lover, you could use your Scene+ points to help pay for flights, hotels, vacation packages, car rentals and more. You can also earn and redeem points when you book your next trip with Scene+ Travel, Powered by Expedia— Scotiabank's third-party service travel centre that is part of the Scene+ program. Another way to save with Scene+ is you could apply your points to offset travel costs using the Apply Points to Travel option with the Scene+ Program¹ up to one year after purchase.

There are also rewards cards specifically created for travel rewards. The Scotiabank Passport® Visa Infinite* Card offers additional travel perks, such as airport lounge access, no foreign transaction fees,² travel insurance coverage, and exclusive discounts.

Take a close look at your spending habits and lifestyle and pick a card that matches how you tend to spend money. Do you spend the most on groceries, dining out and doing fun things each month? If so, a credit card that gives extra rewards for some of those purchases (like the Scotiabank Momentum Visa* Card) might work best.

Look for a sign-up bonus that matches your current spending habits. For instance, if you have to spend $5,000 within the first three months to get the welcome bonus points, make sure you'll be able to earn it without stretching your budget or going into debt.

Whether it’s cash back, travel rewards or a combination of different rewards, think about how easy it will be to use the rewards you earn. Also, make sure the program lets you redeem for things you want and will use. A travel rewards credit card, for instance, might not be the best choice is you don't take many trips.

Before you apply for a rewards credit card, make sure you have the minimum income that it requires. Be sure to review these details to boost your chances of approval — being declined for credit can hurt the credit score you're working to build.

With the Scotiabank StartRight® Program, you can apply for up to $15,000 credit on an unsecured credit card as soon as you arrive — even without a credit history. Once you build your credit history, you can look for other credit cards that offer even more rewards.

Annual fees are charges you pay each year for having the card. Some rewards credit cards offer you an annual fee waiver in your first year, so you can try out the card at no extra cost. Also, some cards carry no annual fee although the reward earn potential may be less.

Think about whether the perks you get from the card are worth paying the annual fee. For instance, if a card has an annual fee, but offers a lot of rewards and perks that you’ll rack up and use, it may be worth it. Always choose a card that gives you the rewards that you’ll use the most. 

With the cost of living so high, rewards credit cards offer a great way to get more out of your spending. As you start your life in Canada, think about how a rewards credit card can help you reach your goals and reap the benefits when you use them. You may even want to have more than one rewards credit card in your wallet!