BMO CashBack Mastercard review

How the BMO CashBack Mastercard earns

Groceries are the headline. You earn 3% cash back on grocery purchases, up to $500 of grocery spending a month, which caps that category at $15 a month or $180 a year. Recurring bills earn 1%, and everything else earns 0.5%.

For example, a student household spending $400 a month on groceries, $150 on recurring bills and $600 on other purchases earns $12, $1.50 and $3 respectively. That’s $16.50 a month, or $198 a year, with no annual fee to subtract.

The welcome offer

New cardholders can earn up to $125 cash back. Our data doesn’t list the conditions attached, so check BMO’s current offer for the spending required and the time frame.

To put the offer in context, $125 is more than ten months of grocery cash back for a household spending $400 a month on groceries.

Making the 3% count

Because the 3% rate stops at $500 a month, the card works best when your grocery bill sits at or below that level. If you spend more, you still earn the full $15 on the first $500, so the cap limits how much you can gain rather than reducing what you’ve already earned.

Putting recurring bills on the card is an easy way to double your earning on those charges, from the 0.5% base rate to 1%, on payments you’d make anyway. For everything else, the 0.5% rate is low, so this card works well alongside a second card that earns more on general spending.

At the cap, $500 a month of groceries earns $180 a year. A household with that grocery bill, $200 a month of recurring bills and $800 of other spending would earn $180 + $24 + $48 = $252 a year in total.

Fees, interest and the fine print

There’s no annual fee. Purchases in a foreign currency carry a 2.5% foreign transaction fee, so $1,000 of spending abroad or in US dollars online adds about $25. That’s five times the $5 the same $1,000 would earn at the 0.5% base rate.

Purchase interest is 20.99% and cash advances are charged 22.99%. For a first card in particular, paying the full statement balance each month avoids interest and builds a record of on-time payments.

Insurance coverage

The card’s coverage protects the things you buy with it. Check the insurance certificate for the limits and time frames that apply.

• Purchase protection
• Extended warranty

Who it suits, and who should look elsewhere

The CashBack Mastercard is a sensible first or student card: no fee, a recommended credit score of 600 or higher, and a grocery rate that rewards a basic household budget.

If your grocery bill is well over $500 a month, or most of your spending falls outside groceries and bills, the 0.5% base rate will hold you back. Heavier spenders may get more from a card with a fee and higher rates.

How it compares

BMO’s own CashBack World Elite Mastercard earns up to 5% on groceries and has a welcome offer of up to $260 cash back, but it costs $120 a year. It only pays off over the no-fee version if you spend enough to cover that fee.

The Tangerine Money-Back Credit Card is another no-fee option. It earns 2% on groceries as one of its 2% categories, below the BMO card’s 3%, so the BMO card comes out ahead for grocery spending under $500 a month.

Before you apply

The recommended credit score is 600 or higher, but BMO makes the final decision based on your full credit profile. Confirm the current welcome offer and terms on BMO’s website before you apply.