13 Best Cash-Back Credit Cards in Canada for June 2025

Cash-back credit cards are pretty straightforward: you use them as you would any other credit card, but in exchange for making eligible purchases, you get a percentage of what you’ve spent back in cash. Depending on the card, you can use the cash for a statement credit or deposit it into an eligible bank account. Some cash-back cards earn points, which can then be converted to cash.

Pros

Cons

» MORE: Rewards Cards Vs. Cash Back Cards

Cash-back bonus categories refer to specific spending areas or types of purchases that earn higher cash-back rates than your card’s base rate.

For example, your credit card might earn 1% on all purchases, but 4% back on gas — that extra earn rate makes it a bonus category.

Base earn rates vary by card but typically range from 0.5% and 2%.

Bonus categories vary by card and issuer, but here are some common examples and what they typically cover:

Nerdy tip: Issuers use merchant category codes to define spending categories, and these can vary between credit card companies. For example, some have different codes for fast food establishments and restaurants, while others do not. To further complicate things, some merchants don’t fall into the categories you’d expect — for example, Costco is classified as a wholesale store, not a grocery store.

You should be able to contact your credit card provider’s customer service to ask about the merchant category for a specific store.

Most cash-back credit cards have limits on the amount of cash back you can earn. These limits are often called caps. Many cash-back credit cards set the cap per category, but they may lump multiple categories together.

For example, a card that offers 5% back on groceries and gas may cap both at $500 per month. This means you’ll earn 5% back on the first $500 you spend on groceries and gas combined. After that, the rate drops to the base rate, such as 1%.

Limits may also include any purchases made by supplementary users on the account.

While rare, some cards give you unlimited cash back, even on bonus categories. That means you would get the full bonus rate, regardless of how much you spend.

Cash-back rewards are typically considered a rebate or discount by the Canada Revenue Agency, so they’re not taxed as income.

That said, if you earn cash as part of your employment, it may be taxable. For example, let’s say you have a company cash-back credit card. Your employer allows you to deposit the cash back earned directly into your bank account. In this case, the cash back would be taxable since it’s a form of income.

Many cash-back credit cards allow you to redeem your rewards monthly, or as soon as they reach a minimum threshold. Cash-back rewards don’t typically expire, so you can also save them up for a more significant, single-shot pay-down of your credit card balance, for example.

However, if you fail to keep your account in good standing or decide to close it suddenly, you could lose your accumulated rewards.

You should also consider whether you’d get better value from a points-based rewards card. For example, if you used a travel rewards credit card and spent the same amount, the points might be worth more than the cash back. In that case, a travel credit card might be a better choice.