Recently, BMO Rewards has made notable strides with aggressive marketing campaigns aimed at attracting customers. For instance, they frequently waive the first year’s annual fee for customers who sign up for one of their credit cards. While this offer is enticing, the critical question remains: how valuable is BMO Rewards fundamentally?
BMO Rewards does offer various features, but it also has several constraints. The point redemption system can be somewhat misleading. This doesn’t necessarily indicate a poor program; understanding its intricacies is essential for maximizing your points. This guide will outline the most effective ways to leverage BMO Rewards.
Value of BMO Rewards Points
To claim $1 in travel, you need to redeem 150 BMO Rewards points, valuing each point at approximately 0.67 cents. This is the highest value you can achieve within the BMO Rewards program. It’s noteworthy that other similar programs convert 100 points to $1 in travel, indicating a lower intrinsic value for BMO Rewards points that must be considered when assessing earning rates.
While travel redemptions offer the greatest returns, it’s worthwhile to explore alternative uses for your points to understand their relative worth in those scenarios.
| Redemption Type | Redemption Value |
|---|---|
| Travel | 0.67 cents per point |
| Investments | 0.67 cents per point |
| Merchandise | 0.45 – 0.65 cents per point |
| Gift Cards | 0.40 – 0.45 cents per point |
| Statement Credit | 0.33 cents per point |
As illustrated above, the optimal use of BMO Rewards points for travel and investment outperforms other redemption forms. While many users will likely opt for travel, redeeming points for investments may yield superior long-term value. Gift cards have lower redemption values, dependent on the merchant, while merchandise redemptions generally return less than travel options.
Redeeming BMO Rewards Points for Travel
BMO Rewards has recently improved its redemption process. Previously, to utilize points, customers had to book travel through the BMO Rewards portal. Now, you can charge any travel expense to your BMO Rewards card and then use your points to obtain a statement credit for those transactions.
This flexible system allows you to take advantage of last-minute travel deals. Moreover, booking directly with travel partners means you can also earn loyalty points, such as Aeroplan or Marriott Bonvoy.
After incurring a travel-related charge, you can easily redeem your points through the Pay with Points feature in your account, with the corresponding credit applied within 3 to 5 days.
Additionally, it’s important to note that if you book travel using the BMO Ascend World Elite Mastercard, travel insurance applies as long as you spend any amount on your travel expenses, whether in cash or points. Thus, even a minimal charge could grant you valuable insurance coverage.
Redeeming BMO Rewards for Investments
A distinct benefit of BMO Rewards is the option to use points for investments. Holders of a BMO Investments account can redeem 15,000 BMO Rewards points for $100 in investment contributions. While this redemption matches travel redemption values at face value, the long-term benefits are worth considering.
Each $100 invested in your RRSP or TFSA has the potential for substantial growth over time, typically yielding annual returns between 4% to 6% with a balanced investment strategy. This compounding effect can significantly enhance your total returns as opposed to the immediate benefits of travel redemptions. This scenario exemplifies the concept of delayed satisfaction.
Redeeming BMO Rewards for Gift Cards and Merchandise
- $25 = 6,250 BMO Rewards points
- $50 = 11,750 BMO Rewards points
- $100 = 23,000 BMO Rewards points
- $500 = 112,500 BMO Rewards points
To determine the best value for gift cards, multiply the dollar value by 100 and then divide by the points required for redemption. For instance, for a $50 card, the calculation would be 50 X 100 / 11,750 = 0.43 cents per point.
In the merchandise category, values tend to vary significantly between items, and in most cases, redeeming points for merchandise offers a lower value than travel redemptions.
Redeeming BMO Rewards for Cash
Another option with BMO Rewards is redeeming points for cash in the form of a statement credit. For 15,000 BMO Rewards points, you receive a $50 credit. Redemption can only occur in increments of 15,000 points, meaning 45,000 points would yield $150. This approach values points at 0.33 cents, which is half of travel redemption value.
The credit takes 3 to 5 business days to process and is only applicable to the principal cardholder. Generally, it’s advisable to avoid redeeming points for gift cards or statement credits unless facing financial hardship, as those options yield significantly lower values versus travel rewards.
Point Expiration Policy for BMO Rewards
Under current policy, BMO Rewards points do not expire as long as you maintain an active BMO credit card that accrues these points. If you plan to cancel your card, redeem any outstanding points beforehand. If travel isn’t an option, consider redeeming points for gift cards or a statement credit.
Comparing BMO Rewards to Other Programs
BMO Rewards stands up well against programs like Scotia Scene+, which share similar travel redemption features. However, unlike RBC Rewards, CIBC Rewards, and American Express Membership Rewards, BMO Rewards doesn’t offer a fixed points flight program. Nevertheless, it remains competitive and has distinct advantages:
- No blackout dates
- No minimum points required for redemption
- BMO Ascend World Elite Mastercard insurance applies to award redemptions
A drawback is the lack of transfer partners, though this is not typical among major banks. For instance, RBC Rewards allows for Avion point transfers to WestJet Rewards, while American Express offers partners like Aeroplan and Marriott Bonvoy.
How to Earn BMO Rewards Points
Gaining BMO Rewards points is simply achieved through the usage of BMO Rewards credit cards. The primary methods for accumulating points are via welcome bonuses and everyday spending.
BMO provides several card options that earn rewards. The BMO Ascend World Elite Mastercard is particularly noteworthy, consistently regarded as one of Canada’s top credit cards. Here is a brief overview of some key options:
BMO Ascend World Elite™* Mastercard®*
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- $150 annual fee – waived the first year*
- Receive 45,000 BMO Rewards points after spending $4,500 in the first three months, and 3,750 points for each subsequent month with a minimum $2,500 spend for 12 months
- Earn 5 BMO Rewards points per $1 on travel
- Earn 3 points per $1 on dining, entertainment, and recurring bills
- Earn 1 point per $1 on all additional purchases
- Includes complimentary membership in Mastercard Travel Pass by DragonPass, with four annual passes
The BMO Ascend World Elite Mastercard has long been acknowledged as one of the best travel credit cards in Canada. Its exceptional signup bonuses and rewards structure, including 5 points per dollar on travel, entertainment, and dining, make it a prime choice.
The added benefits, such as the Mastercard LoungeKey membership and four complimentary airport lounge visits which can be valued at over $250, are additional perks. It’s worth noting that just a minimal charge towards travel expenses makes you eligible for included travel insurance coverage.
BMO Eclipse Visa Infinite* Card
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- $120 annual fee – waived during the first year
- Earn 30,000 points by spending $3,000 in the initial three months, plus 2,500 points for each subsequent month with a minimum $2,000 spend for a duration of 12 months
- Annual lifestyle credit of $50
- 5 BMO Rewards points for every $1 spent on dining, groceries, gas, and transit
- 1 point for all other purchases
- Earn an additional 10% in points when adding an authorized user
The BMO Eclipse Visa Infinite Card is attractive due to its generous welcome incentives and higher potential earn rates. While more points are beneficial, keep in mind the actual value of those points. Notably, earning 5 BMO Rewards points per $1 on eligible dining, groceries, gas, and transit translates into a real value of approximately 3.35 cents.
Additionally, this card offers a better redemption value, allowing 200 points to equate to $1, translating into a 0.50 cents per point value. There’s also a tiered option, the BMO Eclipse Visa Infinite Privilege card, available.
BMO Rewards® Mastercard
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- No annual fee
- Up to 10,000 BMO Rewards points sign-up bonus
- Earn 1 BMO Rewards point for each $1 spent
- Earn 2 points at participating National and Alamo car rental locations
The BMO Rewards Mastercard represents a solid alternative for those who may not qualify for the BMO World Elite Mastercard or prefer no annual fee options. The sign-up bonus can reach up to 10,000 BMO Rewards points, while the standard earning rate is 1 point per dollar spent, doubling at certain rental locations. The included purchase protection and extended warranty features add extra value to this no-fee card.
Conclusion
In conclusion, while my review reflects positively on BMO Rewards, it does place it at the bottom of Canada’s bank travel rewards programs. Although it may not stand out as the top travel rewards initiative among major banks, earning points swiftly with the BMO World Elite Mastercard and easy redemption—with no blackout dates or minimum points required—are notable strengths.