As many of you already know, I’m a big fan of, but paying off the balance in full when it is due. My primary credit card for a couple of years now has been the MBNA. Because they offered high rewards, 3% on gas/groceries up to $600 in spending/month, and 1% on everything else with no cash back limit.

I, along with many readers, considered it to be the. While it has had a good run, things were bound to change when TD bought out MBNA in late 2011.

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Unfortunately, the Smart Cash card has changed (Oct 2012) for the worse. The good news is that it will remain a free credit card, but bad news is that the benefits have been drastically reduced. The gas/groceries cash back has been decimated from 3% on $600/month spending ($18/month max) to 2% on $400/month spending ($8/month maximum). To make matters worse, they have put a cap on the 1% cash back which did not have a limit before to $1,250/month in spending ($12.50/month maximum).

Before • 3% cash back on gas/groceries up to $600/month spending ($18/month) • 1% cash back on everything else with no limit. • No annual fee. • Extended warranty • Theft Insurance After. • 2% cash back on gas/groceries up to $400/month spending ($8/month) • 1% cash back on everything else up to $1,250 in spending ($12.50/month). • No annual fee. • Extended warranty • Theft Insurance According to MBNA reps, these changed will take affect on Dec 1, 2012 for existing card holders.

Upgrade to the Smart Cash World All is not lost for Smart Cash holders! Some are eligible to upgrade to the free Smart Cash World card. I upgraded to the World version prior to the changes because of the incremental benefits without the additional fee.

What is the difference between the World and the regular version? • The $1,250 spending cap on the 1% cash back has been removed. In other words, no limit on the 1% cash back. • In addition to the regular insurances (travel, extended warranty, purchase protection), the World card offers Price Protection insurance. This insurance will pay you back the difference on your purchase if you find a lower price elsewhere within 60 days. How do you Upgrade? For me, it was an option available when I logged into my online MBNA interface, under Account Services.

However, if it’s not there, you can call MBNA to see if you are eligible for the upgrade. Final Thoughts Although the Smart Cash card has reduced its benefits, it is still a very competitive card in the Canadian free cash back credit card space – especially if you upgrade to the Smart Cash World. This card is now ideal for the light-medium spenders, however, heavy spenders will need to look elsewhere to maximize returns. For me, I’m thinking about using the Smart Cash World for gas/groceries only, and perhaps the 1.5% capital one card for everything else. You can see my comparison of here.

For existing Smart Cash holders, what alternatives are you considering? If you would like to read more articles like this, you can sign up for my free newsletter service below (we will not spam you). It’s important to note that you’ll need personal income of $60,000+ or total household income of $100,000+ to request an upgrade to Smart Cash World. When you upgrade, you’ll again receive up to 5% cash back on grocery and gas spending for the first six months (but only up to $400/month instead of $600/month).

When I crunch the numbers (and look beyond the first year incentives and bonuses), the Scotia Momentum Visa Infinite comes out ahead for me. Cap One’s Cash and Travel cards are also worth a look.

A re-post from the other SmartCard article: “the Scotia fine print Requirement #1: Have a minimum gross individual annual income of $60,000 or a minimum $100,000 household income. Seeing as how the median Canadian HOUSEHOLD income is $77,000 (2010), this would render half of all Canadian households ineligible to hold this card. According to StatsCan, only 35% of Canadian households are eligible to hold this card. With the TD/MBNA card, household income requirement is $35,000; an 85% household eligibility rate.

Individual eligibility rates are ~15% for Scotiabank and ~43% for MBNA [via StatsCan]. Rate of return is not the ONLY parameter for determining “topness”. Looks as though Scotia panders to the well-off, as well as coving their own butt in terms of defaults. Again, if your household is earning $100,000 a year and you are in need/want of an extra $500 a year, something is seriously awry in your financial life. Whereas $300 in a $35,000 a year household has a much greater impact.” I’m getting a kick out of high-earning people complain that free is good, but less of a free thing is “for the worse”.

Amusing indeed. I will be switching completely to the WorldPoints World card (which I had already been using for everything except grocery & gas purchases). It has an annual fee of $89 but provides 2% cashback on all purchases with no limit. Essentially, if you now spend at least $8900 annually on non-grocery/gas purchases, you’re better off with this card vs Smart Cash. The best option with no annual fee is to continue to use the Smart Cash card for grocery & gas purchases, and the Capital One Aspire Cash World for all other purchases: 1% cashback, plus 50% “bonus” cashback annually (effectively 1.5%) with no limits. I still feel the best card out there is the Capital One Aspire Travel card. A ton of welcome bonuses worth $350 + $100, and 2% cashback (though you have to be careful – since you only get 2% when applying against travel purchases, and even then there’s a tiered redemption table).

Annual fee is $120, but you get 10,000 miles ($100) every year as an anniversary bonus, so really it’s only $20, beating the Worldpoint card’s $89. The Worldpoints card does sound interesting if it doesn’t require you to apply against travel to get your 2% and/or have tiered redemption if it does, but it doesn’t seem publically available and does have a higher annual fee – perhaps something that one needs to call about? I currently have a Smart Cash card and have received that letter about the 3% going down to 2%. (I’ve only been using it for gas and groceries to date, though interestingly my local Walmart Supercentre counts for all purchases because it has a grocery department). The reward rates are definitely attractive on a few of the travel cards, but we don’t travel all that much, so I tend to look exclusively at pure cash redemption. I’m not entirely sure about the availabilityof the WorldPoints World card, but I believe they are still accepting applications, albeit with a fairly high personal income / household income requirement.

Official Dogecoin DOGE Mining Software there. The classification of Wal-Mart, Superstore, etc. As “grocery” was definitely a great aspect of the Smart Cash — we would deliberately make larger electronics / entertainment purchases at Wal-Mart to take advantage.

@SST Regarding your comments to people earning $100k a year having something “awry” in their financial lives if they want to save an extra $500. My wife and I make approx $130k/year, and yet I am always searching for deals, less fees and being generally responsible financially. While I agree the money makes more of an impact on those who earn less, it doesn’t mean that the higher earners should be wasteful or careless, just because they do well. And no, I don’t think there’s anything wrong with being just as frugal if you make $130k, or $35k. Could that $500 not maybe go to charity for the higher earners, or perhaps their retirement, etc? We make a good six-figure combined income as well and still look for deals via credit cards, shop at Nofrills instead of Loblaws/Sobeys, load up the pantry on door crashers/sales, watch tv on an antenna instead of cable/satellite, put on my own winter tires. Just those things added up are enough for an extra vacation a year – it all adds up!

Btw, part of the reason for the higher income requirements is that there are fewer credit card defaults on higher income earners, who typically don’t carry a balance, and that compensates for the higher cash-back percentages being offered. Most high-cashback cards have a higher minimum income requirement that reason. Vendors pay as little as 2.7% per transaction, so if you’re getting 2% cashback, then Mastercard and your issuer have to split that remaining 0.7% because they likely won’t earn any interest on a balance carried forward to the next month. They make their money off high-earners via volume (transaction fees) mixed with lower default rates.

FT & Echo you were right. Got TD letter yesterday and already applied for CapitalOne Aspire cash back credit card. Will switch to new MBNA World card and use it only for gas&groceries 5% for 6m and then $400/month in total after that. Will use Aspire card for evrything else. I would project that TD will loose many loyal MBNA customers and I guess, by my example, the overall credit money spent with MBNA SmartCash will go sugnificantly down. Not very smart way of preserving existing customers or expanding the business. @willian: “While I agree the money makes more of an impact on those who earn less, it doesn’t mean that the higher earners should be wasteful or careless, just because they do well.” It’s F-R-E-E money you receive for using the companies credit (if you never carry a balance, that is).

To complain that things have changed “for the worse” because your amount of free has declined has absolutely nothing to do with being “wasteful or careless” at any level of income. Basically people are complaining because the aren’t getting paid more to use more credit. Please don’t fool yourself, there is a marked difference between shopping for value to save money and getting paid to use a product. All that aside, it is capitalism, after all, and if what Paul T (#6) says is true, everyone should take advantage of Scotia’s lax application/upgrade protocols to secure themselves a couple of extra points per year. @SST, don’t get me wrong.

I fully understand that the cash back isn’t in any way “free”. We’re all paying it through inflated prices.

Essentially people that use debit and cash (who pay the same amount for a product as I do with my cash back CC) are paying for consumers of any credit cards rewards. As for trying to eek out every last penny of rewards. There is a law of diminishing returns, but that doesn’t mean you shouldn’t try and take advantage of any opportunities to save money. Easier to save a buck than to make two and give 1/2 of it back in taxes.:). Actually the program is even worse than outlined in the article. Its not that you can earn $8 per month on gas/groceries and $12.50 on everything else – for a max total of $20.50 per month. The $400 gas/groceries limit is included inside the $1250 overall limit.

So the max that you can earn is $16.50 ($8 on $400 gas/groceries and $8.50 on remaining $850) per month for yearly total of $198 per year. Here is the comparison (this is only for people who qualify for aspire card and smartcash world card) The Aspire Cash card will give you $198 for $13200 annual spending (198/.015). For the SmartCash World card you can get 2% on $4800 = $96 by maximising your gas/groceries. At 0.5% differential aspire card will cover that much at $19200.

So if you charge above $19200 annually then aspire card is the way to go. Conclusion: Dump the SmartCash Card Get SmartCash World Card if your annual spend is below $19200 and you can spend $4800 on gas/groceries Get Aspire Card otherwise What happens when we include 5% cash back for first 6 months if you move to Smart Cash World (max dollar value 120). Aspire Card will match that at $24000. So here is the new conclusion Dump the SmartCash If annual spending less than $19200 then upgrade to SmartCash World If annual spending between $19200 and $24000 then upgrade to SmartCashWorld. Use it for 6 months and then move to Aspire Card. If annual spending above $24000 then move directly to Aspire Card.

Has anyone had a problem with upgrading their mbna smart cash to the world card? I was able to do it but when you speak to their operators they don’t really seem to want to do it “happily”. The agent I spoke to said they were losing money on the program so they had to reduce the rewards. I think they are counting on people being lazy and just not taking the time to switch cards or do research on better cards. They told a friend of mine they had to review if she was qualified and would get back to her by mail? She pays her balance every month and has never had an issue paying? That was weird.

(and has qualifying salary) I’ve been a real cheerleader for Mbna but now.

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