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The HSBC Cash Rewards Mastercard® is a fairly versatile cash back card with no annual fee, a particularly valuable welcome bonus, and an attractive cash back rate for those who make a lot of purchases online. Though its base cash back rate is a bit low, it’s nonetheless a good option for those looking to earn on their spending without paying for that privilege. And it should be at the very top of the list for anyone looking to buy a new mobile device in the near future.
Pros and cons
Pros
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No annual fee
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Generous welcome bonus
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Special earn rate for online purchases
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Mobile device insurance
Cons
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Online purchase rate drops after spending $6,000 per year
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Low base cash back rate
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Charges foreign transaction fees
Welcome bonus
New cardholders get an additional 10% cash back* on all purchases. Additionally, for the first 60 days you can earn up to 11.5% cash back on eligible online purchases; 11 cash back on eligible gas, grocery and drugstore purchases; and 10.5% back on all other purchases. This offer is unusually lucrative in that the bonus cash back is awarded in addition to the regular cash back you earn for spending. Under most cards’ cash back welcome offers you’re not allowed to double dip, i.e. simultaneously earn both the bonus cash back and the regular cash back you would normally earn outside the bonus period. Maxing out the $1,000 spending limit for the bonus rate should be pretty easy over the course of 60 days. Offer does not apply to residents of Quebec.
Related: Best credit card sign-up bonuses in Canada
Earning cash back
The HSBC Cash Rewards Mastercard® earns cash back for everyday spending across three different shopping categories:
- 1.5% cash back for every $1 spent on eligible online purchases, up to $6,000 per year*. After spending $6,000, cash back drops to 0.5%-1% for every $1 you spend.
- 1% cash back for every $1 spent at gas stations, grocery stores, and drugstores* (unlimited)
- 0.5% cash back for every $1 spent on all other eligible purchases (unlimited)*. Most everyday purchases qualify except for quasi-cash transactions like purchasing foreign currency or paying off debt.
The 1.5% cash back rate* for online purchases makes the HSBC Cash Rewards Mastercard® one of Canada’s best cards for online shopping. The 1% rate on groceries, gas, and drugstore purchases* is respectable, but not as strong as what you can get from spending in those categories via some competing no annual fee credit cards.
Related: Best cash back cards in Canada
Redeeming cash back
One advantage of the HSBC Cash Rewards Mastercard® is that the cash back it earns is flexible and easy to redeem. Cash back appears in your HSBC Rewards account within five days of an eligible purchase, and it can be redeemed whenever you like in the following ways:
- Credit against your HSBC Cash Rewards Mastercard® statement
- A deposit to your HSBC Savings Account
- As an HSBC mortgage payment
Cash back doesn’t expire as long as you keep your account open. If you decide to cancel your card, you lose accumulated cash back automatically, so make sure you spend your balance beforehand. If HSBC cancels your account or terminates its reward program for any reason, it gives you 60 days’ notice to spend your cash back.
Insurance coverage
The HSBC Cash Rewards Mastercard® comes with some useful insurance perks, which certainly aren’t a given for a card with no annual fee. It also lets you purchase optional travel and medical insurance at a reasonable price. Here’s a breakdown of the included and optional coverage:
Complimentary mobile device insurance is a very valuable benefit for those who plan on buying an expensive smartphone, and it’s an unusual feature for a card with no annual fee and no income requirement. Just note that you pay up to a $100 deductible if the value of your smartphone costs $600 or more after depreciation, which is calculated at a rate of 2% per month from the date of purchase. But paying $100 would of course be a lot less expensive than paying the full replacement cost out of pocket.
The fact that you can purchase optional travel and medical insurance can also be very cost effective, particularly if you take a few trips per year. That said, frequent travellers might instead consider the HSBC Travel Rewards Mastercard®, since this card has even more travel-related insurance coverage and pays you bonus reward points on eligible travel spending.
Related: Best credit cards with travel insurance
Interest rates and fees
- Annual fee: $0
- Purchase interest rate: 20.99%
- Cash Advance Transfer Interest Rate: 22.99% (21.99% for Quebec residents)
- Balance Transfer Interest Rate: 13.99% to 23.99%
- Foreign Transaction Fee: 2.5%
- ATM fees: $2 in Canada and $4 outside Canada
- Over credit limit fee: $29 (doesn’t apply for Quebec residents)
- Dishonored payment or cheque: $25 (doesn’t apply for Quebec residents)
Eligibility requirements
To be approved for the HSBC Cash Rewards Mastercard®, you must be a Canadian resident and at least the age of majority in your province. There isn’t an income requirement or annual fee for this card. HSBC doesn’t publicly specify a preferred credit score range for applicants, but having an average or higher credit score increases your odds of approval.
You can apply for this card online by using HSBC EasyID. When applying, you provide your passport, driver’s license, or provincial government-issued ID, so have one of these documents ready.
How does it compare to the competition?
If you don’t anticipate buying an expensive mobile device anytime soon and you only make online purchases occasionally rather than regularly, you might choose the SimplyCash® Card from American Express over the HSBC Cash Rewards Mastercard®. Its base cash back rate, the rate at which it earns on all its purchases aside from those accelerated earn rates on eligible gas and grocery purchases, is 1.25%, which is very high for a no annual fee card. And the welcome offer is also very good.
If you want the best of both worlds, the Tangerine Money-Back Credit Card might be the best middle ground for you. This card lets you earn a high 2% cash back in two spending categories of your choice, or three categories if you deposit cash back into a Tangerine Savings Account. Online purchases are not one of the spending categories you can choose for earning at that high rate, but you can potentially choose to earn 2% on groceries, gas, and drugstore purchases, which would give you double the cash back you would earn in those categories if you used the HSBC Cash Rewards Mastercard®. Those with a personal annual income of $60K or more (or a household income of $100K or more) can instead qualify for the Tangerine World Mastercard®, which includes mobile device insurance like the HSBC card.
Should you apply for the HSBC Cash Rewards Mastercard®?
If you do a lot of your shopping online and you have some major expenses coming up (like a pricey smartphone), applying for the HSBC Cash Rewards Mastercard® is a smart move so you can leverage the welcome offer’s cash back boost and its mobile device insurance. Since it has no annual fee, it won’t hurt to try the card out, provided you pay off your balance every month in full and on time. But if online shopping isn’t necessarily your thing, it might make sense to go for an alternative no annual fee cash back card that gives you higher returns for your everyday spending.
*Terms and Conditions apply.
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Tom Blake is a personal finance blogger originally from Burlington, Ontario. His work has featured in Business Insider, Frugal Rules, MoneyCrashers, and a number of other financial blogs.
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