The title of best credit card in Canada belongs to the American Express Cobalt Card.
And as such, it’s a popular credit card. For those of you who have it, or are thinking about getting it, there’s a small change coming to the 5x grocery and dining rewards category.
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A new monthly cap of $2,500 in spending applies to the 5x food and drinks category
The American Express Cobalt Card card currently has a cap on the amount of spending you can do where you can earn 5x points on food.
It’s quite high: you can spend $30,000 annually on groceries and restaurants and earn 5 points per $1 spent. Once reached, you’ll only earn 1 point per $1 spent. It works out to $2,500 a month.
A slight change is coming on August 15, 2023. Instead of an annual cap of $30,000 spent per year, you’re going to be faced with a monthly cap of $2,500.
It’s the same limit in the end, but it’s going to be applied slightly differently. For most users, this won’t have any impact on what you earn – most people aren’t spending more than $2,500 per month on food.
This really impacts those who spend more than $30,000 per year on food, and how quickly you reach that cap can have a big effect on you.
Say you reached that cap in 6 months, you’re suddenly earning way fewer points.
| Caps | 5x points earned | 1x points earned |
|---|---|---|
| Old System | 150,000 | 0 |
| New System | 75,000 | 15,000 |
In this case, over those 6 months, you would now earn 90,000 points – 60,000 fewer points than before.
However, if you extend this out to a full year, it makes no difference. Say you spent $60,000 over a year ($5,000 per month).
| Caps | 5x points earned | 1x points earned |
|---|---|---|
| Old System | 150,000 ($30,000 x 5) | 30,000 ($30,000 x 1) |
| New System | 150,000 ($2,500 x 5 x 12) | 30,000 ($1,500 x 1 x 12 ) |
Nothing changes – you will now simply spread out earning your points over the whole year rather than getting them up front.
We believe American Express had a few specific types of cardholders in mind when they made this change. For most though, it shouldn’t impact you at all.
All about the American Express Cobalt Card
If you’re new to the American Express Cobalt Card, here are the quick highlights on what it offers and what makes it the best credit card in Canada.
It’s all in the rewards – used properly, this card will earn you more rewards than any other card. Here’s what you’ll earn on purchases:
- 5 points per $1 spent on eligible groceries and restaurants
- 3 points per $1 spent on eligible streaming services
- 2 points per $1 spent on eligible gas, transit, and ride share purchases
- 1 point per $1 spent on foreign currency purchases
- 1 point per $1 spent on all other purchases
A few cards offer up to 5x the points on purchases. But none of them make their points worth as much as what Amex Membership Rewards are worth.
Here’s the quick summary on your top redemption options, and what you could expect for annual rewards based on a $2,000 monthly spend. Based on a $2,000 per month spend, this card earns approximately 54,000 points per year.
| Redemption | Value Of 1 Point | Maximum Annual Rewards |
|---|---|---|
| Transfer Points To Aeroplan | Up to 2 cents | $1,080 |
| Fixed Points Travel Program | Up to 1.75 cents | $945 |
| Transfer Points To Marriott Bonvoy | Up to 1.16 cents | $626.4 |
| Redeem For Any Purchase | 1 cent | $540 |
That’s a lot of rewards, with a lot of choice in how you want to use them for travel, and isn’t really matched by any other credit card.
You’ll get all that for an annual fee of $155.88 that gets charged out as $12.99 per month.
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Your thoughts on the Amex Cobalt cap change
Our question to those of you who have the Amex Cobalt – what do you think of the cap change?
Does it affect you at all, or is much ado about nothing?
Let us know in the comments below.
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