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Solid student credit card option for independent students living away from home.
We consider the Student BMO CashBack Mastercard the best student credit card in Canada because it offers students competitive cash back when they shop for essentials. Students earn 3% cash back on groceries, 1% cash back on recurring bill payments (which includes cell phone plans and streaming services) and a 0.5% cash back for all other purchases, regardless of category. There are monthly spending caps of $500 per billing cycle for the grocery and bill spending categories, after which students will earn the base rate of 0.5% on their spending. However, that monthly spending cap would be hard to exceed for most single students. It’s also worth noting that the term ‘grocery’ is specific with this card, and cardholders need to be mindful of where they shop to earn that rate— Walmart and Costco, for instance, often don’t get categorized as groceries, regardless of what you buy there.
The reward structure of this card makes it easy to earn and redemption is just as simple. Unlike some other cash back cards, the Student BMO CashBack Mastercard allows you to withdraw your cash back at any time for amounts as little as $1. This is a major plus, as students on a tight budget don’t have to wait until their closing statement and can redeem their cash back when they actually need it.
The high grocery earn rate for this student credit card, which is competitive, even among non-student cards, is what makes it stand out. Otherwise, as a student card, it’s pretty standard. It would be nice to see higher earn rates on categories students do their spending in, like dining out and transportation, like those offered by other student credit cards.
The Student BMO CashBack MasterCard offers 3% cash back for groceries, 1% cash back for recurring bill payments and 0.5% cash back for all other purchases. There is a monthly spending cap of $500 for the accelerated categories, which may not be suitable for a family, but since this is a student card, it is quite generous. If you exceed these spending caps, the earn rate will drop to the base rate of 0.5%. Keep in mind, the grocery category does not include any independent businesses, such as butchers or bakeries. It also does not include Walmart or Costco.
Redeeming your cash back rewards is flexible and easy with the Student BMO CashBack Mastercard, which is a great feature for students who are pinching every penny. Unlike some other credit card programs, you don’t have to wait for a certain time to redeem your cash back. You can redeem whenever you want, as long as you’ve earned a minimum of $1 in cash back. If you prefer, you can also set up recurring redemptions starting at $25. Your cash back can be deposited into your BMO chequing, savings or BMO InvestorLine investment account or be used towards your credit card statement. This is among the most flexible cash back redemption programs, as many other cards only allow you to redeem your cash back once per year.
The real value of a cash back card is based on potential annual earnings. We did the math for you by calculating what the average Canadian spends every year for each Student BMO Cash Back Mastercard category. Forbes Advisor uses data from multiple government agencies in order to determine both baseline income and credit card spending averages across various categories. That said, these are based on spending for average Canadians and students may find they spend less than these amounts—thus, earning less cash back overall.
Forbes Advisor estimates the total annual credit card spending to be $27,851.70. Of that amount, grocery purchases add up to $7,536 annually, earning $187.68 in cash back at the 3% rate. Recurring bills add up to $2,436 — earning $24.36 at the 1% rate.
From there, other purchases (like dining, gas, entertainment, online purchases. airline tickets, hotel stays and miscellaneous spending) make up the remaining $17,879.70. Assuming you earn the 0.5% base rate on those, this adds another $89.39 to your yearly cash back. All of this brings the grand total of yearly earnings to $301.43. Not too shabby for a student card with no annual fee.
The Student BMO CashBack Mastercard isn’t the only credit card available to those pursuing post-secondary education, so let’s see how it rates against its competition.
The RBC Cash Back Visa is not a student card, but is suited toward that crowd, thanks to its $0 annual fee. It immediately has the upper hand over the BMO card thanks to a base rate of 1%, which trumps BMO’s 0.5%. However, the grocery earn rate is lower than BMO’s, at 2%, and caps out at $6,000 spent annually. With the same annual grocery spend, you’d earn just $135.36 with the RBC Cash Back Mastercard, compared to the $187.68 you’d earn with the BMO card. Overall, based on the same spending, the BMO card can earn you $301.43 annually, compared the RBC’s impressive $358.39.
However, while the RBC card earns more, it’s worth noting that the RBC Cash Back Mastercard requires a minimum of $25 to redeem and only redeems automatically every January. If you want the cash back sooner, you will need to call and make a request. That being said, it might be worth the extra hassle because the higher base earn rate on the RBC Cash Back Visa (which is unlimited) allows for more earning potential.
The CIBC Dividend Visa for Students has a more diverse rewards structure that, on the surface, may seem more appealing. The rate for groceries is only 2%, earning you $150.72 in groceries annually, in comparison to the Student BMO CashBack Mastercard’s 3%, which can earn $187.68. However, the CIBC Dividend Visa for Students offers of 1% cash back on gas, transportation, dining and recurring bill payments. While that extra 0.5% on dining out and transportation can seem enticing, if you compare the overall estimated annual earnings value, the Student BMO CashBack Mastercard still comes out on top: The BMO card can earn $301.43 in a year, while the CIBC Dividend for Students can earn $295.14 based on the same average spending. But, if you spend more on gas, transportation and dining than groceries—say, if you’re a student who lives at home—this may skew the earnings and the CIBC could be a better card for you.
Cash back is a great perk, but travel rewards are also beneficial, especially for students studying far from home. The CIBC Aeroplan Visa for Students allows cardholders to earn one Aeroplan point for every $1 on gas, groceries and direct purchases with Air Canada and Air Canada vacations. Ideally, you want the value of those Aeroplan points to be about $0.02 when you redeem for flights, so this rate is a lower reward for groceries than the Student BMO CashBack Mastercard. However, the CIBC Aeroplan then offers 1.5 points for every $1 spent elsewhere, which is a significantly higher earn rate than what the Student BMO CashBack Mastercard offers. When we convert the Aeroplan points to a dollar value using the base rate, you can earn $443.98 per year, compared to $358.39 with the BMO card.
For students who are trying to save money on flights home during breaks, the CIBC Aeroplan Visa for Students might be a better pick.
When determining a rating for individual credit cards, the Forbes Advisor Canada editorial team factors in an exhaustive list of data points. With student cards, the scoring model used takes into account factors such as, but not limited to, annual earnings, earn rates and categories, fees, welcome bonus, and other rewards and features. Keep in mind what may be best for some people might not be right for you. Conduct informed research before deciding which cards will best help you achieve your financial goals.
The Student BMO CashBack Mastercard is a great option for students, depending on your lifestyle. With its high earn rate on groceries, this student credit card is best for individuals who live independently, away from home or in a university residence, and also prefer to cook at home, rather than dine out.
If that doesn’t sound like you, then you would be better off with another option that has high earn rates in other spending categories, like dining or gas.
To be considered eligible for the BMO CashBack Mastercard for Students you must meet the following requirements:
Student credit cards are designed specifically for young adults pursuing post-secondary education and trying to establish and build a credit history. As such, student credit cards generally are easy to qualify for, don’t have a minimum income requirement to apply and tend to have no annual fees. That said, there are some credit cards that can be perfectly suited to the needs of students, but aren’t branded as such.
Since the highest earn rate for this credit card is on groceries, it’s ideal for students who are living independently, but less ideal if you are living at home or in a student residence with a meal plan. In these cases, it would be more advantageous to consider a credit card with a higher base earn rate or high rewards in categories that are useful to you (like gas, if you commute).
Yes, you can redeem anytime you want for values as low as $1 by visiting bmocashback.com.
Credit cards charge interest, so it’s important to pay off the balance in full each month, or at least make the minimum payment to maintain a good credit standing. If you are in a position where you are ready to start building credit and believe that you can spend responsibly with a credit card–then absolutely, yes.