MBNA Rewards World Elite

4 / 5

At a Glance

  • Unbeatable Cashback
  • Eligibility - $70k/120k
  • 10,000 point / $100 Activation Reward

Hits

  • 2% cashback on all purchases - a market best
  • Excellent purchase protection makes card very usable
  • Redeem your cash back on anything you would like

Misses

  • $89 Annual Fee
  • Insurance is pretty poor - no travel coverage

2% Cash Back

MBNA Rewards World Elite Review

The MBNA Rewards World Elite

The Rewards World Elite by MBNA is the only card in the market that can say the magical words: 2% cashback on everything. (well, it could say that if cards could talk). That two percent cash back can be used to offset your credit balance or deposited as cash into your chequing account, so there are no category limitations as to how it might be spent. (i.e. it needn’t be spent only on travel costs, for example).

The combination of a high cash back percentage and the lack of spending limitations puts this little dandy in the running for your go-to domestic spending card. With the first year’s annual fee covered by the welcome bonus, nothing is stopping you from giving this cash back card a try.

Welcome Bonus and Annual Fee

Yes, one of the major drawbacks of this card is the annual fee of $89, which is more than covered year one by the 10,000 point / $100 activation reward. The break even point – the moment at which the cash back rewards cover the second year’s annual fee – is $4450 in spend, which should come relatively quickly for many in the cashback crowd.  By way of comparison, that annual fee is the same as the WestJet RBC World Elite Mastercard, which gives excellent value – albeit limited to WestJet purchases.  The Cashback World Elite Mastercard from BMO on the other hand offers a slightly higher annual fee and slightly lower cashback rate.

The question really is one of opportunity cost – how much more valuable is this card than other cash back credit cards with no annual fee? There are big non-cash back reasons that favor this card (or any of the world elite cards for that matter), and we will take a look at those in a moment. However, from a straight cash back perspective, the benchmark on no annual fee cards is 1.75%, or .25% less than the MBNA Rewards World Elite. The break even moment – the spend amount at which point each additional dollar spent yields more value on this card than the no-fee alternative, is $35,600 in spend, or $3,000 spend per month. If that amount looks achievable, then this is a great card for you.

Rewards Elite Benefits

The MBNA Rewards card has branded itself in the past as a travel card, a bit curious considering that their travel insurance is meagre compared to other cards in that category. However, they offer rental collision insurance which is a nice added value over the no annual fee cards. Basically, it means that you are able to use the MBNA Rewards card when you rent cars, get the 2% cash back, and save the $10-$20 per day that the same insurance costs when buying it from the car rental agency.

Moreover, and this is a big consideration in our opinion – unlike the no-annual fee cashback competition, this card offers:

BenefitReward
Price Protection If you find a lower price within 90 days of purchasing eligible items, you get the difference returned. Never worry about not getting the best price again!
Purchase Assurance Bought a new wallet and it was promptly lost or stolen? Get a new one, on MBNA.
Extended Warranty MBNA extends by 50% the manufacturer's warranty, up to an additional year.

These are excellent benefits for a cashback card. Forget the additional .25% – the important thing is that you can get cashback on purchases without risking a lack of coverage on lost or stolen items; without having to ever purchase extended warranty on expensive items; and safe in the knowledge that if your item goes on sale within the next few months you can take advantage of the better price. To us, that is well worth the additional $89!

Easy Cashback Redemption

We’ve mentioned that the cashback may be used on anything you would like. However, it should be noted that there is a minimum point redemption of 5000, or $50. However, once you get to 5000 points, you may redeem in increments of 100 ($1). Obviously with the welcome bonus you needn’t worry about hitting the 5000 point minimum, and thus the most that could be lost in cashback is $0.99.

Best to plan ahead, and if you are considering canceling the card, give yourself enough leeway to ensure you get over the 5000 point barrier prior to cancellation.

Closing Balance

The 2% cash back on every purchase is a market leader in Canada. The rental insurance and purchase protections also make the card much more usable for expensive items than no fee alternatives. With a low fee of $89, we think this card is definitely in the conversation for best cashback cards in Canada.

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