Canadian Tire Options MasterCard Rewards Rate is not 1%
Bottom Line Up Front
- Depending on the specifics of how you spend your rate can be much lower than the commonly stated 1% cash back (in Canadian Tire ‘money’).
- In my case the rate is closer to 0.86%.
- I have moved on to the President’s Choice Financial MasterCard and am much happier with their transparency.
- Based on what I learned when I cancelled my card (see the Aug 2012 update at the bottom of my post), Canadian Tire MasterCard is intentionally, unethically, misleading its customers to think they get a better rate of return than they really are.
The Details
One of our credit cards was recently automatically replaced with a new variant. On looking at its reward level I decided I wanted to compare to my Canadian Tire Options MasterCard. I recalled that the rate was 1%, but I wasn’t certain, so I opened up my most recent statement. I was quite surprised when I did the math and found only 0.86%. Given that we use only one credit card, and funnel most purchases through it, this is easily a $50/year difference in rewards.
When I first got the credit card, at least 10 years ago, I recall it being advertised at 1% (for purchases outside of Canadian Tire). I can’t swear by it, but the 1% was sure stuck in my head. Perhaps the rate had changed? I went to the web site to check and see the following:
Well that’s less than helpful. Interestingly, the other credit cards on offer from the same (Gas Advantage, Cash Advantage) site detail their rewards pretty well. But there is a footnote – surely that will clear it up?
OK, not so much. Neither does the legal text, which only talks about the generalities of reward programs. But the footnote had a link to the Canadian Tire ‘Money’ Rewards Program Page. Sadly, this doesn’t help either, and only starts making me a little angry:
So, they reserve the right to change the program at any time, without a requirement of informing the program members, and even if someone wants to learn how they earn rewards, they have to call to determine their benefits.
I now pick up the phone and speak to a very nice and eager-to-help man. At first he tells me the rate of cash back, in general, on non-Canadian Tire purchases, is 1%. When I explain my issue to him, he further clarifies that sometimes the exact amount can differ, as purchases are rounded both up and down to the nearest dollar, so the exact amount of cash back will not be equal to 1%, but should be close. When I tell him the large difference I’ve encountered, he digs deeper by examining my specific purchases and we find:
- Purchases are always rounded down, never up.
- Purchases seem to be rounded down in different increments depending on amount of money being spent.
For example, we looked at the following purchases and payback:
- $1.84 resulted in 1 cent reward (rounded down to $1)
- $73.33 was rounded down to $70 for reward calculation.
- $244.61 resulted in a $2 reward (rounded down to $200)
- $278.25 resulted in a $2.5 reward (rounded down to $250)
In general, it looked to me like:
- in the <$10 range purchases were truncated to the nearest dollar
- from $10 to <$100 range purchases were truncated to the nearest ten dollars
- greater than $100 purchases were truncated to the nearest $50
I told him that I was pretty upset with this arrangement and that I would like someone from management to call me. (I will just point out here that the guy helping me was great and spent a lot of time looking this info up with me). I didn’t hear anything for a week, and just when I was getting ready to call back, a physical paper letter arrived in the mail (click either to enlarge).
The start of the letter explains how money is earned when shopping at Canadian Tire specifically (not really important in this comparison as I don’t spend enough money there to make a difference). After telling me that the reward program on out-of-store purchases is “one of the most generous customer reward programs on the market” a set of examples follow. While I’m not stating it the same way they do, in essence:
- $278.25 is rounded down to $250
- $244.61 is rounded down to $200
They then generically explain how purchases are handled:
- Outside merchant purchase <$1 —- 1% rounded down to nearest 0.10
- Outside merchant purchase >$1 —- 1% rounded down to nearest 0.50
- [The remaining 3 calculations are for Canadian Tire stores/services/fuel specifically]
The calculations are generally what I saw but don’t explain the $73.33 purchase. They’re obviously missing something because a purchase of $49 would, from the math and ranges they provided, be multiplied by 1% and rounded down to the nearest 0.50 – which would be zero. So some sort of bracket is missing in their explanation and is likely a rounding down to the nearest 0.10 for purchases greater than $1 but less than $100. (This is even more likely given that they have roundings of 0.10 for in-Canadian-Tire purchases). If this is correct it is quite astounding – from the point of view of making small purchases in the $50 to $200 range, the more you spend, the less of a reward you get, as a percentage, in general! No wonder they don’t list the details online…
The last part of the letter is in regards to the benefits we receive for being “elite” members which increases our rewards by 20% but doesn’t affect the base rate – by which I mean, my base rewards would be exactly the same no matter if I was an elite member or not. With the elite rewards added in, we earn close to the original 1%.
Bottom Line
Canadian Tire Options MasterCard is not the deal it used to purport to be, not the deal people think they are getting, and not even the deal its customer support people understand it to be. I am now investigating other rewards programs (almost all of which obfuscate the rate of rewards in one way or another but at least they give you the details online) and will likely move to a card that doesn’t have such a blatant unnecessary and confusing formula as to how rewards are generated. Come on Options MasterCard – if you only want to pay out at 0.86% then just make that the rate. Stop taking advantage of the laziness of your consumers!
Update: Now including a link to a web search I had forgotten to include in this write up, seems to me to be shilling for the card, wherein the rate is given as 1% without any nuance. Number 5 on Google search results. That is the only information I can find on the rate being paid out.
Update 2 (15 Dec 2011): this article has recently captured some attention; it’s nice to see there are some other folks out there willing to look at their monthly statement. No, I haven’t switched cards yet – but only due to laziness. I am keeping my eyes open for a new contender.
Update 3 (2 Aug 2012): Wow. Having switched to a new card a couple of months ago, I finally bit the bullet and cancelled my Canadian Tire MasterCard card today. I wish I had recorded the call. I was immediately transferred to an account specialist. She asked why I wanted to close my account. I told her that I had simply done the math and wasn’t getting the rate of return I had expected. She told me (and I have to paraphrase here): “With our card you get 1% everywhere you shop”.
I found that really funny as clearly, you don’t, and I would have thought the specialist would know that. I decided to clear it up for her and told her that this was in fact the exact reason I was cancelling – that the rate is actually much less because the amounts rewarded are rounded down, and it results in around 0.86% for my purchasing profile. She then told me: “Well yes, we round down to the nearest $10.”
So holy crap, she knew this, but told me the 1% anyway. But there’s more! I then went on to say that yes, you round down to the nearest $10, but that there are different brackets of rounding according to a letter I received, and that the rounding is as much as the nearest $50. She then said: “Yes, we round down to the nearest $50 when you spend above $100.”
So she knew! The staff – their “specialists” – know this, even as they make a blanket statement of 1%. This is no longer an artifact of a confusing system with ill-trained staff. This is a deliberately misleading attempt to fool consumers into thinking they’re getting a better deal than they really are. It’s crossed from incompetence into the realm of the unethical. I’m very disappointed in Canadian Tire. And looking at your comments below, I wasn’t the only one who didn’t know how the card works.
I just got out my list of this month’s purchases, and yes, it turns out that my Canadian Tire reward money was also 0.86 percent, almost precisely, and not 1 percent.
That means if I manage to put $10,000 worth of purchases on my Canadian Tire Rewards card per year, I’ll get back a measly $86 bucks!
But interestingly, if I were to purchase $2,200 worth of bank shares (of one of Canada’s major banks, like, say, Scotiabank, then I would get almost exactly $86 per year in dividend payments.
And of course that dividend would likely rise significantly over the years (as Canada’s banks are well managed.)
In conclusion, it seems that if I want corporations to pay me money, then I’m better off buying shares of the best most stable companies, that pay the best dividend rates, instead of relying upon their rewards programs!
The rewards programs are stacked against us consumers… but they often seem to rewards the share holders nicely!
Reply
Reply by Mike LeSauvage on April 22nd, 2011 at 10:44 am
Glad someone got the word and checked their bill.
That being said, I don’t have a lot of heartache with the overall scale of return. What I’ve learned is that the amounts being offered by Canadian Tire Options MasterCard are kind of stingy in relation to most other reward programmes – the going rate for reward cards seems to be around 1%, sometimes more. Definitely more if it’s a gold or elite (usually with an annual fee) kind of card.
Comparing what you can earn by investing in the company isn’t really fair – in that in that case you’re loaning the company money for the dividend, whereas in this case you’re borrowing from them, and they’re actually giving you an incentive for doing so (while charging the retailer and hoping you carry a balance, of course). What torques me is the lack of transparency as to how the system works (even within their own staff!) as well as how it isn’t even a predictable payout because of the rounding down of payouts – so depending on how your spending was distributed you may be closer or further from that 1%.
Reply
Awesome info. You know I started searching for this because a little $4.00 fee showed up on my card. I never, ever, look at the CT Money earned. I’ve always assumed it was 1%. It’s what I was told in the store years ago when I signed up. So, funny enough, and not haha funny, in looking into what this $4.00 fee was (it was for a cash advance of $60.00 – couldn’t find my bank card at the time) and low and behold it somehow got the wheels turning and I ended up here. I look at my bill and its about .92%. Sure its close to 1% but other credit card companies (and even other MasterCards) have 1% cash back. So I am looking around now for something else. I’d be interested in knowing if you changed to a different MC and if so which one? Anyway thanks for posting this helpful article. Hopefully more people locate it because I guarantee everyone thinks its still 1%.
Josh
Reply
Reply by Mike LeSauvage on December 16th, 2011 at 12:40 am
Glad this helped you out! I haven’t changed cards yet, but only because I’m complacent. I’m closely looking at President’s Choice as I do a lot of shopping at Superstore, but I’ll want to check the facts first.
Reply
Great research. I was curious about this when things weren’t adding up for me either. I might only keep it for the Canadian tire gas bar now.
Reply
Thanks for the information. I have been curious about this for a long time, but did not have the time to look into it. I checked my bill and I am at 0.885%. I am also interested in whether you found a better card.
Thanks!
Reply
Presiden’t Choice Mastercard pays 1% anywhere, anytime. 1% for anything you want to buy at Superstore, Loblaws, No Frills, etc.
Reply
The only reason I got the Canadian Tire Option card was so I did not have to deal with their paper money anymore. There is a Canadian Tire store near me and I do shop there for a number of things.
I also have a President Choice Master Card. That card does pay 1%. I never really checked into the Canadian Tire card, as I only use it in the Canadian Tire store, but I also suspected that it did not pay 1%.
Over the past year I have gotten some $310 in free groceries from my President Choice card and I am happy with it.
Reply
Excellent post in uncovering the details of the CT cash back program! I’m curious though, does this differ in the way CT hands out the paper money? It would seem logical to me that for the purpose of issuing even denominations of the paper money they would need a similar ’rounding’ formula. So probably they do the calculation in the same way. But I agree it is deceptive when they communicate/advertise 1% cash back when it really is not.
Reply
Reply by Mike LeSauvage on December 16th, 2011 at 12:38 am
I don’t know if the in-store MasterCard rewards differ from the in-store paying-by-cash-cashback rewards, but it really wasn’t those that interested me, it was the out-of-store purchases. If I had to guess, I would say that they likely pay more when you use your credit card as an incentive to use the credit card.
To compare:
– Wikipedia states that the current in-store-pay-by-cash reward rate is 0.4%.
– The above letter gave the formula for in-store-purchase MasterCard rewards; you can calculate the rate as around 1.2% based off the example they give. Again, it will fluctuate due to rounding. The best-case scenario would be to spend $730 in-store. Following their formula this would result in a $10 reward, which is 1.369%. [730/7.3 * 10% = $10]
But given that the majority of my purchases don’t take place in Canadian Tire, their in-store reward rate is rather meaningless, which is why I didn’t bother examining that part of the letter in my write-up.
Reply
how do the crap tire gas advantage ones compare, better or worse?
Reply
Reply by Mike LeSauvage on December 16th, 2011 at 12:51 am
I hadn’t examined that card as it isn’t relevant to my spending profile, but you’ve piqued my curiosity. Their web page shows that a monthly spending of $2000 (seems to be the top increment) on the card will save you $0.10 per litre at the pump. For the following calculation, let’s assume I consume 80L/month in gas, which may be a bit on the high side for me, but good to use as a benchmark.
80 litres at $0.10 in savings per litre is $8 in savings per month.
Your rate of return is 8/2000 or 0.4%.
Seems on first glance to be another trap for the same people who will drive ten miles to save 2 cents per litre.
Funny enough, they reduce your savings back down to $0.02/L if you spend in excess of $700 on gas in a month. If you actually spent $700 on gas in a month, at $1.20 per litre, you would have consumed 583 litres at a savings of $58. Your rate of return skyrockets at that point to 2.9%, so this could be a decent card for a frequent traveler or small business owner I suppose.
Reply
[...] Read Michael’s analysis of the CT Mastercard rewards program. [...]
Thank You. I’m switching over to TD Visa
Here’s the deal.
If you can afford to keep a bank balance of $5000 at TD, you can get a Visa Infinite First Class Travel Card, no fees. Otherwise there is a monthly charge that is over $170 per year If you invest any money in certificate of deposits, todays best rate is 2.7% for 5 years that is $135 taxable interest per year
However, when you book your travel plans and use the card, you also have free cancellation for limited reasons. You’ll need to read the fine print.
All purchases on the card reward at 1.5%
They give 3 points for every $1 purchase. Thats total purchase, not just before tax. For each unit of 10,000 points, you have value of $50, which you can use towards almost anything, or to reduce your monthly bill payment.
Just try that with CTC MC Options Money on the card.
The only reason we went with the CTC card was to get away from the CTC paper money.
So – depending on your life style, TD Visa Travel Card could work for you.
I, or none of my family work for TD.
Reply
Nice to finally see the secret calculations. When companies withhold information, it usually is because they are hiding crap, and your blog proves Options is crap. Good rule of thumb to avoid anything that you can’t see upfront.
Anyways, reason for the post:
What don’t you understand about the formula they gave you? Pretty easy to understand. If reward is under $1 then round down nearest $.1, if over $1 then round down nearest $.5. In other words, spend under $100 and reward round down nearest $.1, spend over $100 and reward round down nearest $.5. Crap return if spend exactly $149.99 since would only net $1 reward.
Reply
I am switching to MBNA Smart Cash Platinum Plus http://mbna.ca/shopping_cardList.html
Reply
Anyone look into the Scotiabank Momentum credit card? At groceries stores you get back 4%, 2% at pharmacies and 1% everywhere else. There is a $99 years fee but my family goes through a lot of groceries so this looks like a good deal.
http://www.scotiabank.com/ca/en/0,,86,00.html
Reply
Wow, we were in the same boat! Incredible, as we have used the Options card as our main source for purchases also. Great digging…You just don’t know how appreciated all your work is. Thanks Mike.
Reply
Reply by Mike LeSauvage on February 18th, 2012 at 1:51 pm
Fantastic! Glad to see it being put to good use. We are now in the process of switching to the PC Financial Mastercard – just waiting for a good promo…
Mike
Reply
What can i do with the points i got over 700 can i pay my credit card with instead of cash
Thanks
Mel
Reply
Great work Mike. I spent 90 minutes trying to find the details on the options reward program and felt like I was just going in circles. I searched ” how the card works” and found your blog. Thinking about switching to the Capital One Aspire Card – looks good, however need to review in more detail. However I am sure I am going to dump the CTFS card
Rob
Reply
Interesting read. I actually stopped using my CT Options card a few years ago after noticing I too was getting less than 1%.
Based on the last couple bills I had, I determined that each purchase was rounded down to the nearest $5, and $1 was awarded based on that. (That may have just been coincidental, but it worked out almost exactly).
Feeling scammed, I switched to President’s Choice Financial (1% added to your account at the end of the month, based on total spend). I now use the Capital One Aspire (1.5% to 2% return) and MBNA Smart Cash (1% and 3% on gas/groceries).
Reply
Great post. I stumbled on this blog trying to find the same information you dug up. I am now looking for better rewards cards. You should post any that you found that were better.
Reply
Read your info with interest. I was wondering the same about c.t.c. calculations after seeing how much I got (or didn’t get) after spending over $7000.00 on my card. I too remember them saying “get 1% back”…you did not imagine this. My return of canadian tire money was far from being accurate if i take into account that I get ie7X cash back at gas bars. But I’m still keeping the card. I once bought something there with the cda money, returned item, and they kept cda money as a credit on my account (they took amount off my monthy statement for that amount of the item returned)! Fool me once! I now buy something at cda with my cda money, return it, then have a credit on my account, go to ie) Staples…buy a laptop computer with my credit card…and my credit has just paid for it!!!! Who’s the fool now!
Reply
It is not a good sign when you have to go to a blog to find out what rate you are getting on your options mastercard. Because you can’t find it on the Canadian Tire site. I will be rethinking if I will even keep this credit card as there are so many other options with better returns. Thanks for all your work. Maybe they should hire you. Thanks
Reply
hey just want to comment. the rate is indeed 1% with OUTSIDE vendors. but remeber how they round down, therefore you’ll never get the one percent. and even though they are paying out 1.37% on perchases INSIDE vendor, they again round down and are only paying the rewars on BEFORE tax prices. so if you made a before tax purchase of 2000$ you would get 27.40$ in rewards, not 30.962$ because of taxes. Now even with them rounding down, this is still a better gain than 1%
In conclusion, if you spend a lot OUTSIDE of the store you will lose a lot of your 1% rewards. This is their way of trying to keep you spending your money through them. They do have a good deal going on. Even better when you fuel up at their gas pumps and hit a X12 on their additional 1.37%. my sudjestion would be to use a actual 1% card for any other purchases outside canadian tire and use your canadian tire card within the store only.
Reply
My wife just came home with an info sheet for Walmart’s card since we end up doing most of our grocery shopping there.
it states 1.25 in store and 1% outside.
i need to check into it to see if the 1% is actually true or not.
other thing is that my options card interest is in the 12% range and most other cards are 19% range
if you carry a balance for a month, that difference could wipe out the bonus of a higher paying card
Reply
Reply by Alisha on January 9th, 2013 at 3:00 pm
umm i just looked at my Options MC card statement and it clearly states that annual Interest Charges are standard 19.99% and Cash Advances/Fees are 21.99%. Unsure where you are getting 12% from. I’m replying in Jan. of 2013 and I seen you’ve written in June 2012..perhaps the rate was different then but I doubt it, I’m too lazy to go check my old statements. But I bet it was a promotional short-term thing that they do occasionally. Like shortly after I joined and to get me to use the card immediately they sent me a letter saying for a limited time only I would get 3% back on purchases instead of the 1%, and you know what I started making all my purchases on this card so it worked lol but that means it must have been 2.58% really. what liars!
Reply
Reply by Mike LeSauvage on February 10th, 2013 at 12:57 am
Have to agree with Alisha. I have no idea where you’ve seen 12%. Mine was always in the 19% range.
Reply
Thanks. Not sure why disclosure is not challenged by the feds. I dealt recently with them to transfer funds from another credit card for 0.9% interest for 6 months by going online to their site to transfer.
I did and noticed that there is a 1% one time charge for all transfers and they charge you the interest starting immediately but only transfer the funds to the payee card 4-6 business days later. So they make money from you for these days as well as invest the funds for the same time and earn interest. I end up paying cdn tire and other credit card interest for these days. Double dipping? None of this was disclosed on the printed letter offer sent to me.
Granted that options card is low interest rate, the issue is disclosure. Why aren’t the feds on to them for lack of disclosure and have granted them bank status?
Reply
WOW. I was wondering why sometimes the rewards didn’t match up quite well and couldn’t see on their website what the percentage rewards were… now I can see why they make it so difficult to find the information on their website or that they don’t even put this on their website!! Thanks so much for the informative writeup, I’m definitely going to be looking into a new card.
Reply
Thank you Mike! Very helpful. Guess we can’t always trust even the customer service representatives who knowingly mislead us because at the end of the day they still get paid a standard rate plus commission lol. I’m gonna check with BMO MC and PC Financial MC and see if they do that too. I have cards with them as well. Need to bring them all down to one.
Reply
great article has convinced me to make the moce also. thanks
Reply
Canadian tire Mastercard Option, for those of you have the Elite Status. will change the name and the card for WORLD MASTERCARD OPTION. The New card is Black. and they give you 15 to 25% more Canadian tire money and some extended warranty for all you buy with the card, and many more.
The new card will be ready in February… Impossible to find more Informations on The web..
Reply
I was just thinking I should see what I’m getting for rewards and when I looked on the CTC website I couldn’t find the advertised percentage and got led to that phone number.. a quick google search brought up your article and now I will start searching for a better rewards card for purchases outside of CTC. Anyways thanks for doing this article.
Reply
All this is info is great and true….but it is nice to have this card during one of their promotions. Such as yesterday, bought four tires, $800. Received 10% canadian tire money….so 80 bucks added to card. Hard to beat!!
Reply
Reply by Nes on April 8th, 2013 at 5:58 pm
Agree, i got my card when they had 15% rebate, paid $500, all on sales and received 15%’ CTC. Just got a CT Cash Advantage, use only for buying stuffs in CT.
For people dont have time to play the card system, its always a good idea to use cash back card like CapitalOne, MNBA, etc.
if not, u can get all card from shops you prefer, includes the bay card, RBC shopper (55% off if you buy 20x and redeem 95,000 for $200, only buy sales item!), regular grocery 2% cash back, Target card, etc. (yeah i have like 10 cards
its always a good idea do a 5mins search before you buy something, it may save you 50% 
Reply
Reply by Mike LeSauvage on April 9th, 2013 at 11:03 pm
I’ve never seen that before. 10% is pretty incredible for a one time purchase – and at least there’s no lies!
Reply
Reply by Claude on April 10th, 2013 at 10:18 am
Yup. Just a matter of checking flyer deals
Reply