Let’s face it, we don’t enjoy paying annual fees for credit cards…
It’s something that is simply tolerated due to the increased perks and returns we get by using them. And one way to remove those fees is through high end banking packages.
Most of Canada’s big banks have premium banking packages that come with a credit card annual fee waiver or rebate. Some of those packages can even have their monthly fees waived as well when you keep a minimum balance in your chequing account at all times.
While this isn’t for everyone, rebating both your monthly premium banking fee and credit card annual fee together is certainly attractive.
While these packages offer a lot more than just the fee waiver, we’ll focus primarily on the credit cards and go through what each of Canada’s six big banks have to offer.
And then when we know how it works, figure out what may be the best strategy.
How this can work
Besides the credit cards, these premium banking plans waive the fees for just about anything you can think of, including:
- no fees for using other bank’s ATMs,
- free cheques,
- interac e-transfers,
- bank drafts,
- certified cheques, and
- money orders.
Some of them even have discounts on safe deposit boxes. But, before we go any further…
A warning: Getting one of these accounts simply for the credit card will actually cost you more, as these accounts typically cost between $25-30 per month. You generally need to use the other features to increase the savings required.
But if you already pay monthly fees for banking, why not consider which credit cards you are using and see if there is a better match for your banking? This could increase the value of what you are currently paying.
The best way this works is if the monthly fee can be waived by leaving a minimum balance in the account.
While there is a small cost to leaving $5,000 or more dollars in the chequing account at basically 0% interest ‒ it pales in comparison to the monthly premium banking fee I no longer have to pay.
Instead of leaving the money in a savings account with an annual interest rate of 1.1%, leaving $5,000 parked in a 0% interest chequing account results in a loss of interest, or opportunity cost, of $55 a year. The upside is that doing so pays for your full annual credit card fee while saving you more money when you take advantage of the other premium features of these accounts that come with no extra cost.
However, as you’ll see below, this only works with BMO and TD.
My Personal Example
As a personal example, I have the TD All-inclusive plan.
I leave the $5,000 in my chequing account always, costing me $55 per year.
With that, I get the TD Cash Back Visa Infinite card for free, saving its $120 fee yearly. That makes it the best cash back card I can get when factoring in both the free TD Deluxe Auto club membership it comes with and the annual fee savings.
(Prior to this card being released, I had the Aeroplan Visa infinite. With the annual fee waived, it was the best Aeroplan card available for me.)
I also like having a safety deposit box, and this account comes with one free ‒ saving another $60 per year. Overall, I saved a net of $125 not including other savings this banking account provides.
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Offer ends October 31st, 2018.
Big 6 Canada Banks & Their Plans
Here is a list of the six big banks in Canada, with the name of the plan, what cards have fee rebates and if the monthly fee can be waived.
BMO offers the Premium Plan for those who like “extra perks.” The plan offers an annual rebate of up to $150 on the following cards:
BMO World Elite Mastercard BMO Air Miles World Elite Mastercard BMO Cash Back World Elite Mastercard
This account costs $30 per month and the fee is waived with a minimum monthly balance of $6,000.
CIBC has the PremierService account. It carries an annual fee waiver for the following cards:
CIBC Aventura Visa Infinite CIBC Aventura Gold Visa CIBC Aerogold Visa Infinite
This account costs $28.95 per month, and cannot be waived.
3. National Bank
National Bank offers The Total chequing account. While the annual fee on the credit cards does not get waived, they will give you up to $150 cash back on the annual fee for any National Bank Mastercard at enrollment, such as:
National Bank World Elite MasterCard National Bank World MasterCard National Bank Platinum MasterCard National Bank Syncro MasterCard
This account costs $25.95 per month, and the fee is waived with a minimum balance of $6,000.
4. RBC Royal Bank
RBC provides the VIP Banking plan. RBC offers a $120 rebate for the primary holder and $50 for a supplementary card for the following:
RBC Avion Visa Infinite Privilege RBC Avion Visa Infinite RBC Avion Visa Platinum RBC Rewards Preferred Visa RBC US Dollar Visa RBC British Airways Visa Infinite RBC Cathay Pacific Visa RBC Cash Back Preferred World Elite Mastercard WestJet RBC World Elite Mastercard
The plan has a monthly fee of $30. While the monthly fee cannot be waived. However, RBC offers a multi product rebate that can reduce the the monthly fee to $19.95 a month.
To qualify for the fee reduction, you need to have two of the following with RBC in addition to the VIP account:
- RBC Credit Card
- Active RBC investment
- Qualifying RBC Home equity financing product
Sadly, Scotiabank does not offer a banking plan with a credit card annual fee waiver. For those of you who love your Momentum Visa Infinite card, this isn’t a way you can eliminate your annual fee.
6. TD Canada Trust
TD has the All-Inclusive Banking Plan. It does carry an annual fee waiver for the primary cardholder and one supplementary card for the following:
TD Aeroplan Visa Infinite TD Aeroplan Visa Platinum TD First Class Travel Visa Infinite TD Travel Visa Platinum TD Cash Back Visa Infinite
This account costs $29.95 per month, the fee is waived with a minimum daily balance of $5,000.
There are a large variety of cards available with an annual fee rebate available, with a variety of both rewards and cash back cards.
Picking the right bank can be a method to remove those credit card fees. BMO and TD are especially attractive because their monthly premium banking fees are also waived as long as you maintain the minimum balance they require to do so.
Here are the 8 credit cards, offered by these two banks, where an annual rebate is offered:
|Credit Cards||Annual Fee Rebate||Reward Type||Perks||View Product|
|BMO World Elite Mastercard||$150 (First year free)||Travel||
|BMO Air Miles World Elite Mastercard||$120 (First year free)||Travel, Merchandise||
|BMO Cash Back World Elite Mastercard||$120||Cash||
|TD Aeroplan Visa Infinite||$120||Travel||
|TD Aeroplan Visa Platinum||$89||Travel||
|TD First Class Travel Visa Infinite||$120||Travel||
|TD Travel Visa Platinum||$89||Travel||
|TD Cash Back Visa Infinite||$120||Cash||