Credit Card Strategy for Beginners – Part 3

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Credit Card Strategy – Introduction

When it comes to choosing the best travel credit cards, the incentive of a large welcome offer often steals the spotlight. Yet, there are other factors to consider when building your Credit Card Strategy. Choosing the right credit cards also involves understanding the long-term value they can offer.

In this post, we’ll explore how to optimize your credit card portfolio to maximize the value of your cards over the long haul. We’ll dive into how to leverage ongoing earning potential, exclusive perks, and valuable travel protections—helping you get the most out of your credit cards, well after that initial welcome offer is redeemed!

So, what factors should you consider to diversify your credit card portfolio?

Related Guides:

Loyalty Program Strategy for Beginners – Part 1, Part 2, Part 3

Credit Card Strategy for Beginners – Part 1 and Part 2

Credit Card Strategy – Earning Multipliers

Earning a substantial points and miles balance requires a lot of spending. One way to speed up the process beyond welcome offers is by holding cards with high-earning multipliers. Many travel cards have multipliers on categories such as gas, groceries, dining, travel and more. Here’s a look at some cards with strong multipliers:

Note 1: Scotia Gold earns 6X points at Sobeys, Safeway, FreshCo and Foodland. 5X on other grocery purchases.

Note 2: TD First Class earns 8X for travel bookings made via Expedia.

While these multipliers are attractive, keep in mind that many of them have spending caps. For example, the American Express Cobalt card limits is 5X rate to $2,500 per month for groceries, dining and food delivery. Similarly, the Scotiabank Gold Amex offers capped rates for groceries and dining at $50,000 annually. TD First Class Visa has an annual cap of $25,000 for groceries and dining.

Cards that offer a multiplier on gas purchases often include transit costs and rideshare. For the RBC Ion+, EV charging is also included. The TD First Class Visa offers an 8X travel multiplier, but it only applies for travel bookings made via Expedia. For the American Express Gold, the 2X multiplier applies to all travel bookings. Additionally, you earn one bonus point for travel booked via Amex Travel portal, but this is limited to hotel and car bookings.

Cards with high earning multipliers are good keepers, not only for accumulating points, but also for maintaining a healthy credit score. They allow you to maximize your spending in specific categories; while also helping you build credit history.

Credit Card Strategy – Foreign Exchange Fee

Foreign exchange fees are unfortunately common on Canadian credit cards. Typically, there’s a 2.5% charge on foreign currency purchases. If you travel frequently or make foreign currency purchases, you’ll want to hold a credit card that doesn’t charge this fee.

While the Canadian credit card market is limited in offering cards that don’t levy this fee, there is one issuer that doesn’t impose this fee on some of their cards. Scotiabank offers a suite of credit cards that don’t charge a foreign exchange fee. One popular option is the Scotiabank Gold American Express.

Credit Card Strategy – Travel Insurance

You’ve accumulated the points and found award space to book your flights. Now, you’re wondering which credit card to use for the taxes and fees. A key consideration is choosing a credit card with travel insurance coverage. This insurance typically includes coverage in the following categories:

• Trip cancellation or interruption
• Flight delays or cancellations
• Baggage loss, damage or delays

The issue is this type of coverage generally only applies if you’re charging the full cost of your trip on the credit card. This can be tricky if you’re making an award redemption, since part of the cost is paid for by redeeming your miles, leaving only the taxes and fees to charge to your credit card.

In these cases, check your card’s insurance policy carefully to see if it covers partial payments. As of this post, the National Bank World Elite Mastercard is the only card that provides full travel insurance for partial charges. This applies to all award bookings.

There are other options for award bookings that offer insurance for partial charges. However, this coverage is specific to credit cards associated with the travel program. For example, co-branded airline cards, like Aeroplan or WestJet Rewards, extend insurance benefits for award tickets.

Credit Card Strategy – Airline Perks

Generally, the higher the annual fee, the more benefits you can enjoy. Premium credit cards or airline co-branded cards often offer perks to enhance your travel experience. They also help you earn airline elite status faster. These perks can include:

• Lounge access
• Priority check-in, boarding and baggage handling
• NEXUS statement credit
• Complimentary baggage
• Airline loyalty status boosts

Lounge Access

If you’re not flying in premium cabin, you can still access airport lounges, even without elite status. Instead of waiting at the gate, you can elevate your experience by holding a credit card or charge card that offers lounge access. This is even if you’re flying on a basic economy fare.

The best card for lounge access is the American Express Platinum card (both personal and business versions). It gives you entry to a wide range of airport lounges globally, offering a comfortable place to relax before your flight:

• American Express Centurion Lounges
• Plaza Premium Lounges
• Delta Sky Club (if flying on a flight operated by Delta)
• Airspace lounges
• Escape lounges
• Executive lounges by Swissport (in Canada)
• Priority Pass (allows access to lounges within the Priority Pass network)

If you fly often with Air Canada or a Star Alliance partner, you can access their Maple Leaf lounges and Air Canada Cafés with the TD Aeroplan Visa Infinite Privilege, CIBC Aeroplan Visa Infinite Privilege or American Express Aeroplan Reserve card (personal or business version). Though, this lounge access is limited to Canada and the U.S.

Both the CIBC and TD Aeroplan Infinite Visa Privilege cards provide complimentary membership to the Visa Airport Companion Program, managed by Dragonpass. This includes 6 free lounge visits per year at participating lounges. The premium American Express Aeroplan Reserve card offers complimentary Priority Pass membership, but you’ll still need to pay for the lounge visit.

If you don’t travel frequently but still want lounge access, there are credit cards with lower annual fees that offer lounge passes. For example, the CIBC Aventura Visa card provides access to lounges in the Visa Airport Companion Program. With this card, you’ll get 4 lounge passes annually, which can be used at any participating lounge worldwide. You can share passes with companions or they can apply for their own cards for additional access.

Priority Airport Check-in, Boarding and Baggage Handling

Premium Aeroplan co-branded credit cards offer perks that you can leverage when flying economy with Air Canada. The TD Aeroplan Visa Infinite Privilege, CIBC Aeroplan Visa Infinite Privilege and American Express Aeroplan Reserve card (personal and business versions) provide exclusive priority services. These benefits extend to the cardholder and up to 8 travel companions on the same reservation.

These priority services help you bypass the usual airport hassle, so you can focus on enjoying your trip:

• Priority check-in – allows you to skip the long lines for a quicker check-in process.
• Zone 2 priority boarding – early boarding means you can find space for your carry-on.
• Priority baggage handling – your checked baggage will be among the first to arrive at baggage claim, saving you time.

NEXUS Statement Credit

If you frequently travel to the U.S., a NEXUS membership can speed up border crossings. NEXUS is a trusted traveler program that accelerates processes at both Canadian and U.S. borders. It gives you faster access to security lines and pre-clearance at airports.

The American Express Platinum card and the premium Aeroplan credit cards offer a $100 CAD Nexus statement credit every 4 years. This credit helps partially offset the $120 USD application or renewal fee, making it more affordable to maintain the membership.

Complimentary Baggage

Both major Canadian airlines, Air Canada and WestJet, offer co-branded credit cards that include complimentary checked bags when flying with them. For example:

• The WestJet RBC World Elite Mastercard offers one free checked bag for the cardholder and up to 8 guests on the same booking.
• Similarly, mid-tier and premium Air Canada Aeroplan credit cards also offer the first checked bag free for the cardholder and up to 8 guests on the same booking.

Alternatively, if you’re looking for more flexibility, the National Bank’s World Elite Mastercard offers a $150 annual travel credit. This credit can be used for various travel expenses, including checked baggage fees, regardless of which airline you choose to fly with.

Airline Status Boost

In Canada, there are three frequent flyer programs where signing up for a co-branded airline credit card can accelerate your path to elite status:

• Air France/KLM Flying Blue
• Air Canada Aeroplan
• WestJet Rewards

Air France/KLM Flying Blue

With the Flying Blue program, you need to earn Experience Points (XP) to achieve status. You can accumulate XP by flying with Air France, KLM or any of their partners (such as Delta or Korean Air). You can accelerate your progress by signing up for the Brim Flying Blue KLM Mastercard, which offers 60XP on card approval and an additional 30XP when you renew the card, totaling 90XP.

This gets you within reach of Silver status, which requires 100XP. Silver status benefits include:

• one extra checked bag
• free selection of standard seats
• priority services for your check-in, baggage handling and boarding

Air Canada Aeroplan

To qualify for Aeroplan status, you need to earn a combination of Status Qualifying Miles (SQM) or Status Qualifying Segments (SQS) and Status Qualifying Dollars (SQD). The entry level status is Aeroplan 25K, where you need:

• 25,000 SQM
• 25 SQS
• $3,000 SQD

Depending on which Aeroplan credit card you hold, you can earn SQM and SQS from your spending, which can help you reach status faster. For example, the mid-tier American Express Aeroplan card offers 1,000 SQM and 1 SQS for every $10,000 you charge to the card.

If you hold the premium version, American Express Aeroplan Reserve, you’ll earn 1,000 SQM and 1 SQS for every $5,000 spent. Additionally, you can roll over up to 200,000 unused SQM to the following year, enabling you to boost your status faster.

You’ll still need to spend on Air Canada or eligible partner flights to earn SQD, but with Aeroplan co-branded cards, you’re on the way to quickly earn SQM and SQS on your everyday purchases.

 WestJet Rewards

If you fly frequently with WestJet, their Rewards program allows you to earn tier status by flying with the airline. You earn 100% of your base fare for each WestJet flight and 20% of your base package price when booking WestJet vacation packages.

If you hold the RBC WestJet Elite Mastercard, you can earn a Status Lift to help you accelerate your status. For every $15,000 spent on the card in a calendar year, you receive a $500 tier boost. You can earn up to 3 Status Lifts per year, totalling $1,500 in tier-qualifying spending if you reach $45,000 in annual spending.

With $1,500 in qualifying tier spend, you’re halfway to Silver tier status, which comes with perks like:

• 4 advance seat selection vouchers
• 6 lounge vouchers
• free checked bags (first and second)
• priority boarding and check-in
• Possibility of a seat upgrade before check-in or at the gate.

In short, if airline status with these programs is important to you, signing up for their co-branded credit cards can speed up your progress to elite airline status. Additionally, these cards help keep your miles balances active, ensuring you don’t risk losing them to expiration!

Credit Card Strategy – Hotel Perks

Much like airline perks, there are certain credit cards that offer valuable hotel perks to enhance your stay. The American Express Platinum card (Personal and Business versions) offers a slew of travel benefits, including Gold elite status with two major hotel loyalty programs:

• Marriott Bonvoy
• Hilton Honors

While Gold status with Marriott Bonvoy isn’t the highest tier and offers only limited benefits, it’s still better than having no status! Gold status with Marriott offers:

• 25% bonus points earning rate on paid stays
• Welcome gift of points
• 2 p.m. late check-out
• Possibility of enhanced room upgrades, if available

Hilton Honors Gold status offers benefits similar to Marriott Bonvoy’s Gold tier but comes with an additional benefit that stands out: complimentary breakfast. You can expect complimentary continental breakfast worldwide and sometimes even full breakfast (depending on the region). However, in the U.S. this status comes with food and beverage credit that can be used towards any meal instead.

Beyond these two hotel loyalty programs, the Platinum card gives you exclusive access to the Fine Hotels + Resorts (FHR) program through the Amex Travel Portal. While the prices can be on the higher side, the program is designed for luxury stays and includes the following benefits:

• Complimentary breakfast for two
• Guaranteed 4 p.m. late check-out
• Room upgrades, if available
• Noon check-in, when available

When it comes to hotel co-branded credit cards in Canada, the American Express Marriott Bonvoy Card (available in both personal and business versions) is the sole option. Upon signing up, you’ll receive:

• Silver Elite status with Marriott Bonvoy, which comes with benefits such as priority late check-out and a welcome gift
• 15 Elite Nights toward your Bonvoy status, which can help you reach higher elite levels more quickly
• A 35,000 Free Night Award certificate, which more than offsets the card’s annual fee

Credit Card Strategy – Takeaway

As you build your Credit Card Strategy, it’s important to look beyond the initial sign-up bonus and consider cards that offer long-term value through travel protections and ongoing perks. Whether you’re looking to maximize category spend, avoid foreign exchange fees, enjoy lounge access and priority services, accelerate your progress toward airline or hotel status, or keep your loyalty accounts active, there are many credit card options to enhance every aspect of your travel experience.

By strategically combining cards that complement each other in your portfolio, you can unlock the greatest overall benefits. With the right mix, your Credit Card Strategy will not only maximize your rewards but also offer peace of mind and a smoother, more enjoyable travel journey.