If you’re fan of online banking then you’ve no doubt thought about making the job to an entirely online bank such as Tangerine (the former ING).  For more on the pros and cons of the bank itself, check out our Tangerine bank review here.  While Tangerine has been a market leader in features such as depositing cheques via picture, and “turn-key portfolios” one of the main items that their offering lineup was missing was a great credit card offer.  That has changed now that Tangerine has partnered with Mastercard to introduce their excellent new money-back card.

Before we get into some of the great ways this card can be used to save you money, it’s worth noting that this credit card still isn’t magic – it still charges an interest rate of 19.95%, which is right around the norm for Canadian rewards cards.  While rewards cards are awesome and can really be a nice cherry on the top of your personal finance sundae, it’s important to understand that they shouldn’t be your main dish or focus.  It you’re in credit card debt and/or are carrying a balance from month-to-month your first goal should be to get out of credit card debt immediately!  Once you’ve developed some solid credit card habits, then it’s time to really take advantage of all that Tangerine’s new money-back rewards card offers.

Tangerine No-Fee Money Back Credit Card Summary:

No Annual Fee, Big Cash Back

Two great things really stand out about Tangerine’s bid to make a splash in the credit card market:

1) No annual fee – I currently pay $120 for my rewards card, so I might have to re-think this approach.

A lot of people just hate paying money to use a credit card.  It just doesn’t sit right with them.  For those consumers, this card is about as good as it gets.  It’s also an excellent option for people that don’t spend enough money on their credit cards to make all of those reward perks worth the substantial amount of $100+.  By the way, $120 is a lot of money for a credit card if you’re not going to make a conscious effort to really get the max out of it.  That money you pay for the card is after-tax income, and trading $120 in after-tax income for an extra $90 you can only use on travel isn’t a good deal.  So it makes sense to do the quick back-of-the-napkin math before committing one way or another.

2) An introductory rate of 4% cash back on select categories for the first three months.  Four percent cash back is pretty much unheard of within the credit card space (which is of course why they’re only going to extend you the perk for a few months).

In addition to the great deal over the first three months, the continuing benefits are pretty substantial as well.  We’ll get into what these “categories” are in just a second, but you get a long-term 2% cash-back from spending in two categories, and can even add a 3rd category if you opt to have your rewards money hardwired to your Tangerine Savings Account (that’s a no-brainer to me).  Outside of those categories you get 1% cash back on everything else – which is still pretty competitive overall, especially when you consider there is no annual fee on the card.  When you consider some other cool features of the card such as 1.5% foreign conversion fees (cross-border shoppers know that this pretty low and that these fees can add up in a hurry) and free cards for authorized users (a couple can share an account to make administration easier – but by each having their own accounts and then planning their spending, they could maximize their category coverage) we get to a card that will enter the top-tier discussion with Canada.

A Categorical Choice

In order to use your new Tangerine cash-back credit card to its full potential you should first identify where you do the most spending.  Tangerine has chunked up your spending into the following categories:

  • Grocery
  • Furniture
  • Restaurants
  • Hotel-Motel
  • Gas
  • Recurring Bill Payments
  • Drug Store
  • Home Improvement
  • Entertainment
  • Public Transportation and Parking

Remember that by connecting your card to a Tangerine Savings Account you can pick three of these categories.  If you’re about to start a spring/summer home renovation, that 4% cash back within the category could be pretty substantial!

This is solid entry into the credit card market by Tangerine and folks looking to maximize their credit card rewards really ought to run the numbers and take a look at this card.  That being said, remember the first rule of thumb in personal finance – never carry a balance on your credit card!

2017 Update

Tangerine’s no-free card continues to chug along as a $0 annual fee leader.  If you just can’t stomach paying $100+ for the privilege of owning a credit card (or you don’t have enough in spending to make premium perks worth the price tag) this credit card is a must see.  That being said, a fly was recently introduced to this otherwise excellent card on April 29, 2017.  Instead of the “1% Back On Everything Else” you card users will now get .5% back on any purchase outside of their top 3 chosen categories.

Related: Barry Choi’s Review of Tangerine’s New Credit Card

To be honest though, if you are already maximizing your credit card hacks this shouldn’t affect you anyway.  What I continue to recommend is simply to choose your Top 3 spending categories wisely, then use your Tangerine No-Fee Money Back credit card ONLY when spending on those three categories.  For everything else, simply use a different card with better cash back features – and have the best of both worlds!

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