7 Myths About Credit Cards

Discussions about the truths and myths surrounding credit cards can sometimes get heated on social media and on the Milesopedia Facebook group.

Mostly to warn against the dangers of over-consumption and debt that threaten their users. Did you know that over 70% of Canadians pay their credit card balances in full each month?

What if the world of credit cards wasn’t just about stories that end badly? What if there were benefits to expanding our financial literacy, while simultaneously debunking the myths associated with the world of credit cards? Let’s go assess our knowledge.

Warning: this story may have a happy ending.

Myth 1: Credit card payments put us at risk of fraud

It is true that fraudsters and banking institutions are engaged in a trench war concerning transactions via chip cards, magnetic stripe cards, and online orders. These require our security code and make us particularly vulnerable.

But the advantage of a credit card is that we can regularly track transactions in our online account and notify our bank as soon as we don’t recognize an expense.

And even if we do not usually check our account before the monthly statement is issued, the bank itself could detect the appearance of a fraudulent transaction and contact us.

The financial institution then cancels the card before issuing a new one, and does not charge us for the fraudulent transaction.

In all cases, we are not held responsible for fraud for transactions that are not ours!

7 Myths About Credit Cards - Mythes Cartes de crédit

Myth 2: Credit cards encourage impulsive and irresponsible purchases

Do credit cards have this power over humans? If we are impulsive and irresponsible by nature, it is indeed better to work on these behaviors before applying for credit cards.

Moreover, this extends to all spheres of our lives, not only to our relationship with money. Obtaining credit cards offers us the opportunity to:

manage our money well by paying the full amount on the statement every month,
discover our most frequently used spending categories (where does our money go?),
respect the credit limit granted by the lender.

Myth 3: Having more than one credit card lowers your credit score

This myth is quite popular. D’abord, il faut savoir que le score de crédit s’établit à partir de plusieurs facteurs :

The punctuality
The use
The history
The types of credit
New applications

The two factors that are impacted when opening a new credit card are our credit history (i.e. the number of years we have been part of the credit world). When adding a new card, the credit age will be lowered. But this factor only accounts for 15% of our rating and the drop of a few points will quickly be made up for.

The same is true for the “new applications” factor: this only accounts for 10% of the credit score.

A missed payment would have had a much greater impact (35% of the score) or excessive use of the granted credit (30% of the score).

The benefits of having multiple credit cards and being a good payer boil down to this:

the possibility to optimizie our profits according to the type of purchase,
the opportunity to earn different types of rewards based on our needs (points for travel, cash back, etc.),
prove to lenders that they are right to approve our credit applications because our credit file is in very good standing.

That said, Milesopedia recommends not making new credit applications when shopping for a mortgage rate.

7 Myths About Credit Cards - World Elite Cards Featured

Myth 4: Paying an annual fee for a credit card is like throwing your money away

First, there are several no-annual-fee credit cards that have good benefits such as insurance and opportunities to optimize certain expenses. Why deprive ourselves of it?

Then there are those with monthly or annual fees. Let’s get out our calculators.

Is it worth paying $120 a year to get 5% back on our groceries?

For example, if I spend $100/week on food, which is low in 2021, that is still a return of $260 annually, not to mention the other benefits provided by credit cards such as the American Express Cobalt^® Card, the BMO CashBack^® World Elite^®* Mastercard^®* or the Scotiabank Gold American Express^® Card.

Our credit card selection
Credit card	Annual fee	Welcome offer
American Express Cobalt^® Card Apply NowCompare	Annual fee$191.88	Welcome offerGet 1,250 points after $750 in purchases per month for 12 months Up to 15,000 points Get 1,250 points after $750 in purchases per month for 12 months	Apply NowCompare
BMO CashBack^® World Elite^®* Mastercard^®* Apply NowCompare	Annual feeFirst Year Annual Fee Rebate$139 $0First Year Annual Fee Rebate	Welcome offerGet 40 points after $2,000 in purchases per month for 12 months Up to $480 cash back Get 40 points after $2,000 in purchases per month for 12 months	Apply NowCompare
Scotiabank Gold American Express^® Card Apply NowCompare	Annual fee$120	Welcome offerAfter $7,500 in 12 months Up to 50,000 pointsEnds Nov 1, 2026 After $7,500 in 12 months	Apply NowCompare

Is it wise to renew the Marriott Bonvoy^® American Express^® Card every year for $120 (or the Marriott Bonvoy^® Business American Express^® Card for $150) to benefit from its annual free night certificate worth 35,000 points (when we can use it at hotels worth $300 or more)?

Our credit card selection
Credit card	Annual fee	Welcome offer
Marriott Bonvoy^® American Express^®* Card Apply NowCompare	Annual fee$120	Welcome offerAfter $3,000 in 3 months Up to 70,000 points After $3,000 in 3 months	Apply NowCompare
Marriott Bonvoy^® Business American Express^®* Card Apply NowCompare	Annual fee$150	Welcome offerAfter $5,000 in 3 months Up to 80,000 points After $5,000 in 3 months	Apply NowCompare

Does paying $139/year with cards like the CIBC Aventura^® Visa Infinite* Card, the CIBC Aventura^® Gold Visa* Card, or the Scotiabank Passport Visa Infinite +* Card compensate for the four to six complimentary airport lounge visits that I use, each costing $45?

Our credit card selection
Credit card	Annual fee	Welcome offer
Scotiabank Passport^® Visa Infinite +* Card Apply NowCompare	Annual fee$150	Welcome offerAfter $2,000 in 3 months Up to 35,000 pointsEnds Nov 1, 2026 After $2,000 in 3 months	Apply NowCompare
CIBC Aventura^® Visa Infinite* Card Apply NowCompare	Annual feeFirst Year Annual Fee Rebate$139 $0First Year Annual Fee Rebate	Welcome offerAfter $5,000 in 4 months Up to 60,000 points After $5,000 in 4 months	Apply NowCompare
CIBC Aventura^® Gold Visa* Card Apply NowCompare	Annual feeFirst Year Annual Fee Rebate$139 $0First Year Annual Fee Rebate	Welcome offerAfter $5,000 in 4 months Up to 60,000 points After $5,000 in 4 months	Apply NowCompare

Is $139 worth the price of the free ticket I get for a round-trip flight to Hawaii (especially when the first year is free, as with the TD^® Aeroplan^® Visa Infinite* Card)?

FeaturedCompare

TD^® Aeroplan^® Visa Infinite* Card

TD Aeroplan First-Year Annual Fee Rebate

Annual feeNo annual fee the first year: $0 $139
Our valuationMilesopedia first-year estimate First-year valueWelcome bonus$1,000Annual fee rebated$139Total$1,139Rewards on your spending are not included. The calculator that adds them from your own profile is on the card's page.: $1,139
Welcome offerAfter $12,000 in 12 months: Up to 50,000 points

With this offer for the TD^® Aeroplan^® Visa Infinite* Card, you can get up to 50,000 Aeroplan points^† as well as an Annual Fee rebate for the first year^†.

Earn a welcome bonus of 10,000 Aeroplan points when you make your first Purchase with your new Card^†
Earn 15,000 Aeroplan points when you spend $3,000 within 90 days of Account opening^†.
Plus, earn a one-time anniversary bonus of 25,000 Aeroplan points when you spend $12,000 within 12 months of Account opening^†

This card also allows you to enjoy travel benefits, such as a free first checked bag for you and up to 8 travel companions on the same reservation^†, as well as a rebate on the NEXUS program application fee (up to $100 CAD per eligible cardholder) every 48 months^†.

With the TD^® Aeroplan^® Visa Infinite* Card, you earn 1.5 points^† per $1 spent on:

Grocery purchases
Gas and electric vehicle charging purchases
Purchases made directly with Air Canada^® (including Air Canada Vacations^®)

You also earn 1 point^† per dollar on all other eligible purchases made with your card.

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^†Terms and conditions apply.

Annual fee

Primary card$139

Additional card$75

Annual income required

Individual$60,000

Household$100,000

Conversion fees

2.5%

Earning rate

1.5xGas & EV
1.5xGroceries
1.5xAir Canada flights
1xAll spending

Value

1st Year Value$1,714

2nd Year Value$425

Card benefits

Concierge service24/7

Travel insurance

Travel medical (under 55)Up to $2,000,000 / 21 days

Travel medical (55-64)Up to $2,000,000 / 21 days

Travel medical (65+)Up to $2,000,000 / 4 days

Trip CancellationUp to $1,500

Trip InterruptionUp to $5,000

Delayed BaggageUp to $1,000

Lost BaggageUp to $1,000

Flight DelayUp to $500

Hotel BurglaryUp to $2,500

Travel AccidentUp to $500,000

Purchase protection

Purchase ProtectionIncluded

Extended Warranty+1 years

Mobile DeviceUp to $1,000 / 1 years

Auto Rental CollisionUp to $65,000 / 48 days

Is $150 expensive for a credit card like the National Bank World Elite Mastercard which offers you up to $250 in reimbursed travel expenses per year, the best insurance on the market (up to 60 days for your trips and up to 3 years of extended warranty), unlimited access to the National Bank lounge in Montreal for you, an additional traveler, and up to 2 children, and up to 2 points per dollar including at Costco?

Or the $149 requested by a credit card like the Scotiabank Passport^™ Visa Infinite + Card which offers 6 airport lounge visits each year and charges no conversion fees for your foreign currency transactions (a 2.5% saving on every purchase)!

Our credit card selection
Credit card	Annual fee	Welcome offer
ExclusiveNational Bank World Elite^® Mastercard^® Apply NowCompare	Annual feeFirst Year Annual Fee Rebate$150 $0First Year Annual Fee Rebate	Welcome offer$150 annual fee rebated First Year Annual Fee RebateEnds Nov 4, 2026 $150 annual fee rebated	Apply NowCompare
Scotiabank Passport^® Visa Infinite +* Card Apply NowCompare	Annual fee$150	Welcome offerAfter $2,000 in 3 months Up to 35,000 pointsEnds Nov 1, 2026 After $2,000 in 3 months	Apply NowCompare

Anyway, I’ll leave you to think about it. Start from your needs and compare offers with the milesopedia comparison tool.

Myth 5: The best credit card rewards are cash back

Different needs, different solutions. Cashback is highly appreciated by people who want to save on their expenses.

For example, in these times of home renovations, it is particularly interesting to be able to reinvest this cashback into new purchases.

This is why we see many of our members taking advantage of current welcome offers from several credit cards offering 10% cashback in the first few months.

Our credit card selection
Credit card	Annual fee	Welcome offer
Scotia Momentum^® Visa Infinite +* Card Apply NowCompare	Annual feeFirst Year Annual Fee Rebate$120 $0First Year Annual Fee Rebate	Welcome offerAfter $2,000 in 3 months Up to $300 Cash BackEnds Nov 1, 2026 After $2,000 in 3 months	Apply NowCompare
SimplyCash^® Preferred Card from American Express Apply NowCompare	Annual fee$119.88	Welcome offerAfter $2,000 in 3 months Up to $250 cash back After $2,000 in 3 months	Apply NowCompare
CIBC Dividend^® Visa Infinite* Card Apply NowCompare	Annual feeFirst Year Annual Fee Rebate$120 $0First Year Annual Fee Rebate	Welcome offerAfter $2,000 in 4 months Up to $250 cash back After $2,000 in 4 months	Apply NowCompare
BMO CashBack^® World Elite^®* Mastercard^®* Apply NowCompare	Annual feeFirst Year Annual Fee Rebate$139 $0First Year Annual Fee Rebate	Welcome offerGet 40 points after $2,000 in purchases per month for 12 months Up to $480 cash back Get 40 points after $2,000 in purchases per month for 12 months	Apply NowCompare

However, many people prefer cards that will allow them to earn travel rewards to save on:

accommodation (hotels, Airbnb),
transportation (plane, train, car rental)
activities (e.g. Disney passes).

Let’s take time to define our needs, our projects, and our dreams with a strategy. Let’s match it with the best rewards program and associated credit cards to help us achieve it.

And let’s stick to credible readings to debunk the myths.

Myth 6: The American Express card is rarely accepted in Quebec or Canada

I’ll give you that. An American Express card is less accepted than Visa and Mastercard. But times are changing, and it is increasingly accepted in Quebec and elsewhere in Canada.

For example, IGA grocery stores in several regions in Quebec have been accepting it since April 2021.

American Express cards are so advantageous, whether for the welcome bonus or offers throughout the year, that we do not want to do without them.

Moreover, few members of the Milesopedia community do not yet have the American Express Cobalt^® Card, which offers 5 times the points for everyday expenses such as groceries, dining, or convenience stores (think gift cards 😉 ).

The best credit card for groceries! - Super C gift cards

Another example: the Marriott Bonvoy^® American Express^® Card offers a free hotel night every year upon card renewal.

The offers also include discounts and credits with our phone service providers or in department stores like Wayfair.

Who does not want a $20 credit on a $100 purchase?

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American Express Cobalt^® Card

American Express Amex Membership Rewards

Annual fee: $191.88
Our valuationMilesopedia first-year estimate First-year valueWelcome bonus$255Total$255Rewards on your spending are not included. The calculator that adds them from your own profile is on the card's page.: $255
Welcome offerGet 1,250 points after $750 in purchases per month for 12 months: Up to 15,000 points

The American Express Cobalt^® Card is the best credit card from American Express, whether you want points for travel or cash back.

American Express Cobalt^® Card welcome offer

The welcome bonus is paid out monthly over your first 12 months. You earn 1,250 Membership Rewards points for each monthly billing period in which you charge $750 in net purchases to your card, in any category (1X, 2X, 3X or 5X). That adds up to 15,000 Membership Rewards points over the year, a welcome offer we value at $255.

Earning the full bonus means $9,000 in net purchases spread across 12 monthly billing periods. This offer rewards steady monthly spending rather than one large purchase.

You can use these points as statement credits on everyday or travel purchases, at the same rate either way: 1,000 points = $10.

You can also transfer them to Aeroplan, Avios (British Airways and Qatar Airways), Flying Blue, Marriott Bonvoy or Hilton Honors. With the full welcome bonus, that is a choice between:

15,000 Aeroplan points
15,000 Avios points
15,000 Flying Blue Miles
18,000 Marriott Bonvoy points

If hotel points are what you are after, our ultimate guide to Marriott Bonvoy and our complete map of Marriott Bonvoy hotels by category show what those points can actually buy.

American Express Cobalt^® Card benefits

Here is what the card gives you, starting with the benefits cardholders use most.

5X points on eligible eats and drinks in Canada: groceries, restaurants and bars, home food delivery and convenience stores. A spend cap applies.
3X points on eligible streaming subscriptions in Canada.
2X points on eligible gas, public transit and ride sharing purchases in Canada.
1 additional point on eligible hotel and car rental bookings made through American Express Travel Online.
1X point per dollar on everything else, with no category restrictions.
Points that hold the same value either way: 1,000 points = $10 as a statement credit, or a 1:1 transfer to several airline and hotel loyalty programs.
No minimum income requirement, as with every American Express Canada card.
Additional cards at no extra cost: the first and every other supplementary card is $0.
The Hotel Collection: a room upgrade when available, 12pm check-in and late check-out when available, and up to $100 USD in hotel credit on amenities charged to the room for a stay of two or more consecutive nights, booked through American Express Travel.
Front Of The Line^® presale and reserved tickets for concerts and theatre performances, plus offers and events curated for cardmembers through Amex Experiences.
A soft credit check before you apply: you can see whether you will be approved with no impact to your credit score. This applies to American Express personal card applications.

To see how it compares with the rest of the line-up, read our round-up of the best credit cards from American Express in Canada.

The 5X categories and where they apply

The 5X rate is the reason most people carry this card. In Canada it covers four kinds of merchants:

Groceries: Metro, IGA, Sobeys, Super C, Safeway, Whole Foods.
Restaurants and bars: sit-down meals, takeout and drinks.
Home food delivery.
Convenience stores: Couche-Tard, 7-Eleven.

The 2X rate covers gas stations such as Esso, Shell and Petro-Canada, along with public transit and ride sharing.

With the American Express Cobalt^® Card, you earn between 1 and 5 points per dollar:

Category	Points per dollar
Grocery (Metro, IGA, Sobeys, Super C, etc.)	5
Home food delivery	5
Restaurants and bars	5
Convenience stores	5
Streaming services	3
Service station	2
Transport	2
Travel	1
Other	1

That works out to a 1 to 5% return on those purchases. For example, if you spend $1,000 per month across groceries, restaurants and food delivery, you earn $50 back per month, or $600 per year from that category alone. Transfer the points to a program such as Aeroplan instead and the return can be higher.

You can also stack these categories with the hundreds of stores that offer 5x points.

American Express Cobalt^® Card insurance coverage

The card comes with a broad insurance package. The amounts below are the coverage limits; conditions, age limits and exclusions are set out in the certificate of insurance linked in the Insurance section above.

Travel insurance

Emergency medical: up to $5,000,000 for the first 15 days of a trip.
Travel accident: accidental death and dismemberment of up to $250,000 for you, your spouse and dependent children under age 23 when travelling on a common carrier (plane, train, bus or ship) and the tickets are charged to your card. Supplementary cardholders and their families are covered too.
Flight delay: up to $500 for necessary hotel, meal and sundry expenses bought within 48 hours when you are delayed or denied boarding for four hours or more and no other transportation is available. This $500 is an aggregate limit per occurrence, shared with missed connection and delayed baggage coverage.
Delayed baggage: up to $500 for essential clothing and sundries bought within four days when your outbound luggage is delayed six hours or more. This $500 is an aggregate limit per occurrence, shared with missed connection and flight delay coverage.
Lost or stolen baggage: up to $500 per occurrence for all insured persons combined, for checked or carry-on baggage and personal effects in transit, when the airline tickets are charged to your card. Within that limit, jewellery is capped at $300 per occurrence and golf clubs, including golf bags, at $250 per occurrence.
Hotel and motel burglary: up to $500 against the loss of most personal items if your hotel or motel is burglarized, when the stay is charged to your card.

Rental car insurance

Theft and damage coverage is included for a rental car with an MSRP, for its model year, of up to $85,000 excluding all taxes, for rentals of up to 48 days. To use it, decline the Loss Damage Waiver (LDW) or any similar option from the rental company and charge the full rental to your card. There is no cost for this coverage, and it replaces the daily insurance the rental company charges, usually $16 to $23 per day.

Mobile device insurance

Your device is covered for up to $1,000 per occurrence when it is charged to the card, for up to two years from the date of purchase. The payout is based on the depreciated value of the device, which falls by 2% of the purchase price for every completed month, less a 10% deductible. Theft and accidental damage coverage starts on the 91st day after purchase, because the first 90 days are covered by purchase protection.

Purchase protection and extended warranty

Eligible items charged to your card are insured against accidental physical damage or theft for 90 days from the purchase date, up to $1,000 per occurrence for all items combined. The card also extends the original manufacturer’s warranty by up to one additional year on eligible items, with indemnification limited to $10,000 per insured item and $25,000 per Cardmember per policy year for all items combined.

American Express Cobalt^® Card fees

Card fee: $15.99 per month, which equals $191.88 per year, for residents outside Quebec. Quebec residents are billed $191.88 per year.
Additional cards: $0.
Purchase interest rate: 21.99%.
Cash advance interest rate: 21.99%.
Foreign transaction fee: 2.5%.
Minimum income required: none.

Because the fee is billed monthly rather than in one annual charge, you can stop and restart the cost in step with how much you are actually using the card.

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American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information, click the Apply Now link. If you apply and get approved for an American Express Card, we may receive compensation from American Express, which can be in the form of monetary payment.