[ANALYSIS] Scotia Momentum VISA Infinite Card

Here’s an analysis on the Scotia Momentum VISA Infinite Card. The highlights of the card are as follows:

• $99 annual fee (waived if you apply before March 31, 2014)
• $30 for a supplementary cardholder
• Earn 4% cash back on gas and grocery purchases (on your first $25,000 of annual spending on these categories)
• Earn 2% cash back on drug store purchases and recurring bill payments (on your first $25,000 of annual spending on these categories)
• Earn 1% cash back on all purchases made above the $25,000 threshold on the categories listed above
• Earn 1% cash back on all other purchases
• Rewards are paid annually on your November statement

The first year will be a no-brainer in terms of whether to get this card or not. Take advantage of it while you can. The real question is whether this card is worth it beyond the first year. Due to the $25,000 spending limit, there is actually a maximum on how much cash back you can earn for the significant categories:

• $25,000 x 4% = $1000
• $25,000 x 2% = $500

That means you can only earn a maximum of $1,000 + $500 = $1,500 on the higher earning ratio categories. If you subtract $1,500 – $99 = $1,401.

The 1% cash back you can earn on many other no fee credit cards, so that is basically the competition. The most comparable no annual fee credit card is the MBNA Smart Cash Platinum Plus which gives you 2% cash back on gas and groceries. There is however a maximum of $400 spending per month, which means you can only earn $96 ($400 x 12 months x 2%) on the 2% cash back per year.

Here is an example of a simple calculation on how much a person spends a year:

• Gas + Groceries = $500 x 12 = $6,000
• Drug store + Recurring Bills = $100 x 12 = $1,200
• Other purchases = $400 x 12 = $4,800

Total $1,000 per month and $12,000 per year

Scotia Momentum:

• $6,000 x 4% = $240 (gas and groceries cash back)
• $1,200 x 2% = $24 (drug store and recurring bills cash back)
• $4,800 x 1% = $48 (other cash back)

Total = $312
$312 – $99 (annual fee) = $213

MBNA

• $4,800 x 2% = $96 (limit on 2% earning on gas and groceries)
• $1,200 (remaining gas and groceries) + $1,200 (drug store and recurring bills) + $4,800 (other purchases) = $7,200
• $7,200 x 1% = $72 (cash back on all other purchases)

Total = $168

Therefore, even with the $99 annual fee on the Scotiabank momentum card, you still come out ahead by $213 – $168 = $45.

I suggest that you do a similar calculation on how much your monthly spending is to see which card is more worth it.