RBC VISA TFSA Reward – is this cashback feature worth your points?
Ready to Redeem Points for TFSA?
Last month, when I received my RBC VISA card monthly statement, I saw an advertisement about redemption of RBC Rewards points toward TFSA. Seems very interesting, but is it worth a try? I decide to take a close look.
Here is the advertisement:
RBC Rewards points can now be redeemed toward your Tax-Free Savings Account (TFSA). Redemptions start with a minimum of 12,000 points for a $100 RBC Registered Rewards voucher. For each additional 3,000 points you redeem, you will receive an extra $25 in vouchers. Not only do investment earnings grow within the TFSA tax-free, there are multiple investment options and no tax when you withdraw your funds. Visit www.rbcrewards.com/tfsa to redeem and start saving today.
Now let’s consider each of the RBC VISA cards that offer RBC Rewards points.
RBC VISA cards with annual fees
- Earn 1 RBC Rewards point for every $1 spent.
- Annual fee ranges from $15 to $120: Visa Classic II Student $15, Visa Classic II $35, Visa Gold Preferred $110, and Visa Platinum Avion $120.
- Cashback Analysis: To receive $100 TFSA, you have to spend $12,000 on your VISA card. This gives you a cashback rate of 0.83%. This cashback rate will be even lower if you consider the annual fee you have to pay; eg, 0.71% cashback rate for Visa Classic II Student, and -0.17% cashback rate for Visa Platinum Avion (please note it’s minus!
).
RBC VISA cards with no annual fees
- Earn 1 RBC Rewards point for every $2 spent.
- Annual fee $0: RBC Rewards Visa Gold and RBC Rewards Visa Classic.
- Cashback Analysis: To receive $100 TFSA, you have to spend $24,000 on your VISA card. This gives you a cashback rate of 0.42%.
Conclusion
Whether RBC cards have annual fees or not, the cashback rate of return is very low, compared to other Top Cash Back Credit Cards. Therefore, you might consider using the points for other things.
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