Bank Of Montreal | BMO Cashback Programs Review

BMO’s cashback credit cards are very popular and used every day by many Canadians, but if you’ve never had one before, you may still not be sure about whether or not you want to get this kind of card. That’s why we’ll be discussing how to maximize your BMO cashback potential and how to use that money to your best advantage.

BMO Cashback Programs Review

About BMO

BMO first began in 1817 in Montreal, the city from which it gets its full name (Bank of Montreal). They are responsible for billions of dollars in transactions every single year. The company has an excellent track record in terms of making sure that customers get the financial payoffs they were promised; they haven’t missed a dividend payment since 1829, a true rarity in the Canadian banking sector among all the financial crises we’ve experienced since that time. When they promise you cashback rewards, you know you’ll get them.

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BMO Cashback Program Details

Before you even start to earn any BMO cashback rewards, you’ll be able to choose where you want those hypothetical dollars to go once you have accrued them. Your choice is between your debit account (probably the most common choice), a savings account, your BMO investor account, or your BMO credit card balance. Each option has its merits depending on your spending and savings strategies, and since these rewards are accrued in dollar amounts to begin with, they are all worth the same amount of money at the point of redemption – though of course, BMO cashback rewards that are invested do have the potential to grow more than the other two options over time.

It’s up to you to choose which of these four options is right for you. Be aware, though, that in all three cases, you will have to have a relevant BMO account in order for your rewards to be processed. The only one of the four that you will definitely have is your BMO credit card balance, so if you want to use the debit or investment options, be sure to open those accounts with this provider before you start to use your cashback card in earnest. If you happen to change your mind at some point, though, don’t worry; you can switch your BMO cashback rewards destination at any time.

You can also choose to withdraw your rewards at one of three frequency settings: once annually, every time your rewards reach a certain amount, or just once each time you request it. Again, which you use is up to you. You will still need to have a minimum of $50 in rewards in order to withdraw, though, and can only increase that amount in intervals of $10.

How To Earn BMO Cashback

When it comes to earning BMO cashback rewards, things are pretty simple. Just charging purchases to your BMO cashback credit card will be enough to get you something, although how much you receive each time depends on how much you spend and what rate the card you are using offers. Rates are generally significantly higher during promotional offers, and higher-tier cards (ones with high annual fees, usually) offer superior rates the rest of the time. The best one out there right now is the BMO CashBack World Elite Mastercard with an everyday 1.5% cashback rate, while all 3 cashback options offer a 4% promotional earn rate in the first 4 months. The other two options offer a regular rate of 1% cashback on all purchases. Ultimately, using your card often is the most important factor in determining how much cash your cashback card will produce for you.

Best Cashback Strategies

There are advantages and disadvantages to each of the three redemption options available through the BMO cashback program depending on your spending patterns. Putting BMO cashback dollars straight into an investment account allows you to easily save money that you will never miss. Because those funds are invested, the money will also grow over time. Depositing to a savings account can also work for this purpose, although this will almost always fail to pay off as well as putting the same amount of money into an investment would – although on the flip side, it is also more accessible and much more secure than an investment that could drop at any time. Immediately applying them to your credit balance can have a similar effect, although it does less to protect you from yourself since you can still spend money on your credit card with the express purpose of paying it off later on with points. As long as you’re disciplined enough to avoid doing this, however, any of these three options can help you to save money (whether in potential interest fees or by allowing accrued interest or some lucky stock increases to increase its value).

If you don’t feel you need the extra savings, however, putting the cash directly into your debit account gives you immediate access to the funds. This is the most popular option for cashback users with this company, since it provides you with a little extra money you can use right away. The reward increments will typically be too small to make much of a difference to a savings or investment account anyway, but can be used to pay for small things like a meal out or a trip to the movies. Many people prefer to have these little indulgences now rather than wait for the payoff of the other two options when that payoff will ultimately be very small.

What We Think

While BMO cashback rates are not as high as what you could get from other credit card companies, they can be put to use in several different ways that make things more convenient for you. They are also more generous than some other programs, particularly on the free card side of things; many other providers only offer 0.5% cashback rates at that tier. All told, BMO cashback users may not necessarily be maximizing their rate of return per dollar spent, but they can feel confident that they are part of a flexible cashback system that gives them many options to use or access the money they’ve gained.