A cash back card is only useful to you if you can spend enough to accumulate a fair amount of rewards, making them potentially tricky to use for people on a tight budget. The CIBC Dividend Visa is a flawed but promising cash back card that provides better rewards on basic spending than most similar cards do. Its main difficulty is the strong competition that it faces against its own sister cards, the CIBC Dividend Platinum and Visa Infinite card, but even there it holds the advantage of being targeted to a completely different demographic than the other two cards. We’ll go into more detail about this in the article that follows and explain why low-income users in particular will be especially interested in the basic Dividend card.
Breaking Down the Reward Rates
The CIBC Dividend Visa’s reward rates are good, but they can be somewhat complicated to take in at first glance. Unlike most cards’ rates, they actually change depending on how much you’ve spent at any point in a given year. The highest rate you’ll get at any time is 2% cash back on the first $6,000 in spending you do on groceries, and the lowest is the 0.5% cash back that applies to your first $6,000 in regular spending. Once you hit that $6,000 mark (subtracting the spending that qualified for the boosted 2% rate), you’ll earn 1% on everything after that. Basically, you want to charge all the groceries you buy to this card, but you should know that normal purchases won’t add up to much for most of the year (if at all). Unless you know you’ll be spending a lot over the course of the year, you’ll get the most out of it using it almost exclusively for grocery spending. General spending is best done on another card.
If you really want to use a Dividend card for most of your daily needs, though, you might try one of the upgraded versions. Both the CIBC Dividend Platinum and the CIBC Dividend Visa Infinite get you 4% back on groceries and gas, as well as 2% back on Telus and Tim Hortons purchases and a flat 1% on all other charges. There’s no ups and downs to worry about regarding the rates, just certain types of purchases that earn you more than others.
The Benefits of Sticking to the Basics
The fact that this card places particular emphasis on rewarding grocery spending might seem boring at first; food is a basic necessity that almost everyone purchases regularly, but it’s not as exciting as spending some hard-earned cash on a fun new electronic or a night on the town. Looking closer, though, should reveal to you that that is exactly what makes this card brilliant.
Even people who are couch surfing, living an increasingly popular minimalist lifestyle by choice or even living on the streets will still need to buy at least some groceries at some point, even if they rarely purchase anything else. They also tend to make up a surprisingly large part of the average person’s budget. That makes these cards ones that could potentially still be of extra use to you even if your life circumstances were to drastically change, and that in turn says something about how hard it is to go wrong with these choices. There might arguably be better cards out there (especially on the lower end of things), but these ones won’t let you down in the most fundamental way. They will always have a use and they will always funnel extra rewards over to you on your most common and indispensable purchases. That’s something commendable in a credit card for sure, and with the gated tiers of rewards being weighted more heavily on the front end than the back one, even those without much money to spend will enjoy getting quite a bit of those funds back.
What Else Could You Get?
The CIBC Dividend Visa is relatively sparse on benefits, offering just $100,000 of common carrier accident insurance to entice people to sign up for it. Even though this is quite standard for entry-level cards and is actually more generous than some nowadays (many come with nothing at all now), some people will still inevitably be disappointed by this reality. In that case, they might look to the upgraded versions to find what they’re looking for. The other two cards throw in plenty of extra benefits like car insurance and exclusive dining offers to reel you in, although it’s the Visa Infinite card that will get you the best overall package. Both cards charge annual fees in exchange for these inclusions while the basic card does not.
There are also welcome bonuses to be considered, though, and those are considerably nicer on the basic card. As a new cardholder, you’ll get 5% cash back on everything for your first 4 months or your first $2,000 in spending, whichever comes sooner. You need to sign up for autopay services to your card on at least one recurring bill in order to qualify, but it’s free to do this and quite convenient for the customer so it’s not a big thing to ask. It’s important to note that this offer does pale in comparison to the 10% bonus rate being offered on the Platinum and Visa Infinite cards, though, so once again opting for the luxury versions will pay off for those that choose to do so.
Should You Go With the CIBC Dividend Visa?
Unlike what you’d see from most credit card lines, the CIBC Dividend line’s two credit card options are actually very different, and the uneven comparison sadly steals the spotlight from the otherwise more-than adequate basic CIBC Dividend Visa. Its odd reward structure makes it stand out from other companies’ cash back card offerings; it’s not a fancy card by any means, but it will get the job done and caters to a tight low-spend budget better than almost any other card out there. The Visa Infinite version, on the other hand, is far better in every way and should be your first choice if you can qualify for it – there is no reason to stick with the basic card here. All in all, even if you’re limited to the inferior basic version, these cards undeniably have their uses and should reward most users handsomely for their spending.
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