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Ranking the Credit Card Portfolios of Each Canadian Financial Institutions (updated October 1, 2016)

ByMatt

A reader asked me last time, what the purpose was of this ranking. Basically, you do what you want with the list, take it for what it is. As a consumer, this list can give you an idea on where to shift your business. For example, if you want to see some of the smaller companies survive and thrive, you will know where to move your business.

Personally, I like ranking things, so this is fun for me to write up a post like this.

A few changes to the credit card industry has shifted a few positions. But first, below is a quick recap on the explanation of each grouping:

  • Group 1: Leaders of the industry. They each provide several great products to choose from. I used to have a rule where it will be a top 5. But the industry changes all the time, so just like your miles and points portfolio, you need to be flexible enough to change things up! So there is not going to be a fixed number of companies in each group. That being said, the main criteria to be part of this group is to have a significant enough gap from Group 2A.
  • Group 2A: Bubble companies that have enough infrastructure to eventually be part of Group 1. What I mean by this is that these companies have enough resources to really beef up their portfolio.
  • Group 2B: Companies that have a big gap from Group 3, but not enough infrastructure to ever be able to bump into Group 1. They would need a drastic move, like a merger with another company to be able to jump a grouping.
  • Group 3: One-trick-pony or very-weak-credit-card-portfolio type of companies. Either they only offer one product (competitive or not) or they don’t even offer one competitive product in their credit card portfolio.

Also note that you may notice a few companies that are ranked higher, but in a lower grouping. This is because their credit card portfolio ranking is separate from the type of grouping they fall under.

GROUP 1

Please refer above for the description of this grouping.

1) Toronto Dominion (TD) / MBNA (no change)

As mentioned many times before, TD is really only in this position because they have the companies portfolio with MBNA. Without MBNA, TD would not be ranked first. Unfortunately, MBNA is getting more strict on how many credit card you can have with them at a time. There are reports that you can only have 1 of their credit cards at a time. If the rules becomes even tighter, we may see TD starting to slip down the rankings.

2) American Express (AMEX) (up from 3)

AMEX’s once in a life time sign up bonus policy prevents them from being 1st place. Though they did bring back the referral bonus to a bunch of credit cards, so they deserve to be back up to second place.

3) Scotiabank / Tangerine (down from 2)

Scotiabank dropped a position mostly because AMEX brought back one of their top features (referral bonus). Overall, I strongly believe that Scotiabank firmly holds down first place in the cash back credit card market. Launching the Tangerine Money-Back Credit Card system wide has pushed their cash back portfolio to the top, especially when you combine it with the Momentum Infinite Visa card. I would really like to see Scotiabank begin offering a co-branded hotel or airline credit card in the future.

  • Scotiabank GM Infinite Visa Card
  • Scotiabank Momentum Infinite Visa
  • Scotiabank Scene Visa Card
  • Scotiabank More Rewards Visa Card
  • Scotiabank Gold American Express Card
  • Scotiabank American Express Platinum Credit Card
  • Tangerine Money-Back Credit Card

 4) Royal Bank of Canada (RBC) (no change)

No activity here. They sometimes offer a decent promotion, but without any significant permanent changes to their portfolio, they remain still.

GROUP 2A

Please refer to the explanation above for the discrepancies in the rankings, as well as the description.

=5) Bank of Montreal (BMO) (now tied*)

A reader pointed out to me last time that the devaluation of the Air Miles program warrants bumping BMO out of the top 5. That being said, I really like the World Elite MasterCard, as well as BMO’s partnership with SPC to keep them competitive. For now, I will put them as tied with CIBC.

If Air Miles really starts losing customers because of the change in expiry policy, then BMO will also be affected, as they may start losing customers. I really hope that BMO is working on new partnerships to have other types of co-branded credit cards instead. One can hope!

=5) Canadian Imperial Bank of Commerce (CIBC) (up from 6*)

BMO’s downfall is the only reason CIBC moved up to a tie. That being said, the point is that the gap has closed between BMO and CIBC companies. However, CIBC still needs an improvement before surpassing BMO, even if Air Miles does fall off the books. CIBC still does not have a significant competitive product. The closest is the Dividend Visa Infinite Card.

* As a result of the tie, there will be no 6th place ranking. The next position will be rank number 7.

9) National Bank (no change)

Even though Capital One and Chase currently rank higher than National Bank, they have the infrastructure to push into the top 5. At least we are seeing some activity, with the introduction of the new Echo MasterCard. Hopefully National Bank continues to make more improvements.

The reason that they are not above Capital One and Chase is because both those companies offer at least 1 highly competitive product that trumps all of National Bank’s portfolio. Though whenever the National Bank World Elite MasterCard has a promotion, it is a decent card.

GROUP 2B

Please refer to the explanation above for the discrepancies in the rankings, as well as the description.

7) Chase (up from 8)

Capital One’s negative move and the recent merger with SPG, has made the Marriott Rewards Premier Visa Card even more valuable. So Chase Canada definitely deserves to move up a ranking.

Dare I say that this merger may have saved Chase Canada, IF they play their cards right. I really hope that they find a way to survive in the Canadian credit card market.

8) Capital One (down from 7)

Just for discontinuing the grandfathered version of the Capital One IHG MasterCards, they deserve to be bumped down a ranking.

 10) President’s Choice Financial (PC Financial) (no change)

My hope for the Shoppers Optimum program to survive seems like a distant past, as they appear set to be discontinued. I would have liked to see PC Financial expand their portfolio. Let’s hope that they have something in store when Shoppers Optimum is finished.

12) Desjardins (ranking stays the same, but bumped to Group 2B)

I decided to move Desjardins into Group 2B. They are highly dependent on the Quebec market and that may not be enough to ever be able to launch into the top 5. However, if they continue to expand outside of Quebec (which I would love to see), then I will move them back into Group 2A.

For now, they offer a few standard products. They should really look into teaming up with a loyalty company to offer a competitive co-branded credit card.

GROUP 3

Please refer to the explanation above for the discrepancies in the rankings, as well as the description.

11) Rogers Bank (no change)

With the addition of the Fido MasterCard, Rogers Bank definitely solidified its position at the top of this group because they offer some diversity, which is what I was hoping to see. Because of the slight devaluation coming on October 19, 2016,  I won’t put them above PC Financial yet.

I am just glad to see that there is an expansion in their credit card portfolio!

13) Laurentian Bank (no change)

It is a close call between HSBC and Laurentian Bank. I used to place HSBC above Laurentian, but HSBC is looking weak these days and Laurentian Bank has a more diversified business model to keep them afloat. However, they still have some work to do to catch up to 12th place Desjardins. Laurentian Bank is in tough if they primarily focus their energy in Quebec. They should really be in Group 2B at the very least, but they would need to branch out more to the rest of the country.

This week, they announced that they are cutting 300 jobs and merging 50 branches. Granted they did say most of the cuts will be through attrition.  I actually like this move, because it gives them an opportunity to cut costs. But let’s see what they do with these savings.

14) HSBC (no change)

HSBC is also closing some branches (Saint John and Sault Ste Marie). HSBC is such a disappointing company to me. I really believe that they have a strong potential to compete with the Big 6 banks in Canada. Unfortunately, they seem to favour a more consistent and stable approach, in the sense that they do not make any bold moves. Let’s see a big splash on the market!

15) Canadian Tire (no change)

I still rather Canadian Tire team up with one a financial institution to offer their co-branded credit card to access their resources. I guess they rather have more control over their product. The problem is that we probably won’t be seeing any expansion to their portfolio.

16) Walmart Financial (no change)

If Walmart does not at least bump up their earning ratio (to at least 2.5% on Walmart purchases), they can’t really move up the rankings.

  • Walmart Rewards MasterCard

4 Comments

  1. Some thoughts on BMO MC
    I just found out that the BMO World Elite MasterCard gives the four free Priority Pass lounge visits every year, not just as a sign up bonus. That’s a benefit that I really use! The negative for the benefit of this card is that you have to go through their reward service to use the travel points you accumulate. You have to use the rated they have established, which are usually higher than what you can find yourself (I.e. no CAA , AARP, government rates). Would. Be so much. Better if they allowed us to book our own travel and then pay (or partially pay) by getting a credit back on the card. Scotiabank travel cards do this.

    Reply

  2. Nailed it…
    With devaluations being more common in all types of currencies. I have switched my strategy to earn and burn.
    TD a strong player in the retail space and the generous bonus by AMEX put these two in the top spot.
    The two stronger currencies for now are amex membership rewards and spg (in my opinion) for their redemption flexibility.

    For everyday small everyday purchases tangerine (rest) and groceries pc master elite (if you buy at loblaws/shoppers) seems to be bringing the highest value.

    Reply

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