Credit card rewards come with their own vocabulary. This glossary explains the terms used across our guides in plain language, with a Canadian example for each. Jump to a section or use your browser’s find (Ctrl+F or Cmd+F) to look up a term.
Last updated: October 2026. Card rates, fees and program rules change. Examples come from issuer pages and published reviews checked in October 2026. Confirm details with the issuer before you apply.
Earn rate · Base rate · Bonus category · Spending cap · Flat-rate card · Tiered card · Merchant category code (MCC) · Recurring (pre-authorized) payment · Welcome bonus · Minimum spend · Welcome bonus eligibility rules · Statement period (billing cycle) · Linked-card fuel discount · Stacking · Card combination
Cents per point (CPP) · Point valuation · Fixed-value points · Statement credit · Transfer partner (and transfer ratio) · Award chart · Dynamic pricing · Taxes, fees and carrier surcharges · Devaluation · Points expiry · Redemption minimum · Payout schedule · Sweet spot
Annual fee · Net value · Break-even point · Foreign transaction (FX) fee · Supplementary card · Income requirement · Hard inquiry · Credit utilization · Interest-free grace period · Cash advance · Credit card surcharge
Aeroplan · Scene+ · Membership Rewards · PC Optimum · Avion · BMO Rewards · Journie Rewards · Co-branded card · Visa Infinite, World Elite and other card tiers · Aeroplan preferred pricing · Free first checked bag · Lounge access · Merchant acceptance
Earning rewards
Earn rate
How much a card gives back for each dollar you spend, shown as a percentage for cash back or as points per dollar for rewards cards.
Example: A card paying 4% on groceries earns $4 on $100 of groceries. A card earning 3 points per dollar earns 300 points on the same $100.
Why it matters: Compare earn rates in the categories where you actually spend the most, not the biggest number on the card’s ad.
Base rate
The rate a card pays on everything that isn’t in a bonus category.
Example: Many tiered cash back cards pay 0.5% to 1% on “everything else”.
Why it matters: If most of your spending lands outside bonus categories, the base rate matters more than the headline rate.
Bonus category
A type of spending that earns a higher rate, such as groceries, gas, dining or recurring bills.
Example: A card might pay 4% on groceries but 1% on clothing.
Why it matters: Whether a purchase counts is decided by how the store is coded (its MCC), not by what you buy. More on how merchant category codes work.
Spending cap
A limit on how much spending earns the bonus rate. Above the cap, purchases drop to the base rate.
Example: A card might pay its bonus rate on up to $20,000 of spending a year, or up to $2,500 a month, then drop to the base rate.
Illustrative: a 4% card with a $20,000 yearly cap
On $25,000 of bonus-category spending you earn $850, not $1,000. Spending past the cap drops to the base rate.
Why it matters: Caps decide how much a high-spending household can really earn. Check whether a cap is monthly, per statement or yearly.
Flat-rate card
A card that pays the same rate on every purchase, often between 1.25% and 2%.
Example: A 2% flat-rate card earns $2 on every $100, whether it’s groceries or a hardware store.
Why it matters: Simple and predictable. It wins when your spending is spread across many types of stores.
Tiered card
A card that pays different rates by category: a high rate on a few, a low rate on the rest.
Example: 4% on groceries and bills, 2% on gas, 1% on everything else.
Why it matters: Tiered cards win when a large share of your spending fits their top categories.
Merchant category code (MCC)
A four-digit code that tells your card issuer what type of business a store is. Your card uses it to decide which rate to pay.
Example: Stand-alone grocery stores usually use MCC 5411. Warehouse clubs use a different code, so grocery bonuses usually don’t apply there. Some cards also exclude specific codes, such as tax payments (MCC 9311).
How the code decides your rate
Same groceries, different code, different rate.
Why it matters: The bonus follows the store’s code, not the items in your cart. Check your first statement at a new store. Read the full guide →
Recurring (pre-authorized) payment
A bill the merchant charges to your stored card automatically each cycle, like a phone plan on auto-pay.
Example: Your phone company charging your card every month counts. Paying the same bill yourself through online banking usually doesn’t.
Why it matters: Recurring-bill bonus categories only apply when the merchant bills your card automatically. See our recurring bills guide.
Welcome bonus
Extra points or cash a new cardholder gets after meeting a minimum spend in the first months.
Example: “Earn bonus points when you spend a set amount in the first three months” is a common structure.
Why it matters: A welcome bonus can be worth more than a year of normal earning, but only if you meet the spend with purchases you’d make anyway. Read the full guide →
Minimum spend
The amount you must charge to a new card within a set time to unlock its welcome bonus.
Example: Some offers need a total in the first three months; others need a set amount every month.
Why it matters: Never spend extra just to hit it. Missing the deadline usually means no bonus. More in our guide to welcome bonuses and minimum spend.
Welcome bonus eligibility rules
Issuer rules on who can get a welcome bonus.
Example: Amex says its offers aren’t available to current or former cardmembers of the same card. TD won’t pay a bonus if you opened a TD Aeroplan card in the past 12 months. Aeroplan allows one new-card bonus per card tier across issuers.
Why it matters: Check the rules before applying, or you could pay the fee without getting the bonus.
Statement period (billing cycle)
The roughly monthly window of purchases that appear on one statement.
Example: If a card caps a bonus at $300 of spending per statement period, the cap resets with each new statement, not on the first of the month.
Why it matters: Some caps and payouts reset by statement, not by calendar month or year.
Linked-card fuel discount
Cents off each litre of gas when your card is linked to a station’s loyalty program.
Example: Some banks partner with station loyalty programs. For example, linking an RBC card to Petro-Points saves 3¢ a litre at Petro-Canada.
Why it matters: The discount stacks on top of your card’s normal earn rate.
Stacking
Earning from more than one source on the same purchase: your card, a linked discount and a store’s loyalty points.
Example: At a partner gas station: 4% card cash back, plus cents off per litre, plus station points.
One fill-up: 50 L at $1.40/L = $70
Total: $4.30, about 6% back on $70, before any station points.
Illustrative example based on a 4% gas card linked to Journie Rewards at a Chevron station.
Why it matters: Stacking is often where the biggest everyday savings come from.
Card combination
Using two or three cards together, each for the categories it pays best on.
Example: A tiered card for groceries and bills, plus a flat-rate card for everything else.
Why it matters: A second card can turn a 1% base rate into 2% on your “everything else” spending.
Redeeming points
Cents per point (CPP)
What one point is worth in cents when you redeem it. One cent per point equals 1% back on a 1-point-per-dollar card.
Example: A flight costing $600 in cash that you book for 40,000 points plus $100 in taxes gives ($600 − $100) ÷ 40,000 = 1.25¢ per point.
How to work it out
1¢ per point is about the same as 1% cash back. Below that, cash back usually wins.
Why it matters: CPP is how you compare points with cash back. If you redeem below 1¢, cash back usually wins. See our cash back vs. travel points guide. Read the full guide →
Point valuation
A published estimate of what a program’s points are typically worth.
Example: Published Aeroplan valuations range from about 1.1¢ (economy flights, per Ratehub) to 2.0¢ (Prince of Travel, Q2 2026).
Why it matters: Valuations are averages. What your points are worth depends on how you redeem them. See our cash back vs. travel points guide. For one program in detail, see what an Aeroplan point is worth.
Fixed-value points
Points that are always worth the same amount, whatever you redeem them for.
Example: Scene+ points are worth 1¢ each toward travel. PC Optimum points are worth $10 per 10,000 points.
Why it matters: Predictable, much like cash back, but without the upside of transfer programs.
Statement credit
A redemption that takes money off your card balance.
Example: Redeeming flexible points as a statement credit often gives about 1¢ per point.
Why it matters: Easy, but often the lowest-value way to use transferable points. See our cash back vs. travel points guide. Compare redemptions with cents per point.
Transfer partner (and transfer ratio)
An airline or hotel program you can move points into. The ratio is how many program points you get per card point.
Example: American Express Membership Rewards transfer to Aeroplan at 1:1, with a 1,000-point minimum.
How a transfer works
Minimum transfer: 1,000 points. Transfers are generally one-way, so move points only when you have a booking ready.
Why it matters: Transfers are generally one-way. Move points only when you have a booking ready.
Award chart
A published table of how many points a flight or hotel night costs.
Example: Most Aeroplan partner airline bookings still follow a fixed chart, according to Milesopedia.
Why it matters: Charts make costs predictable, but programs can change them.
Dynamic pricing
Points prices that move with demand, like cash fares.
Example: Aeroplan uses dynamic pricing on Air Canada flights, so a popular date can cost more points.
Why it matters: Book early and stay flexible on dates to get better value.
Taxes, fees and carrier surcharges
The cash you still pay on a points booking.
Example: Aeroplan doesn’t add carrier surcharges, but you pay taxes and government fees, plus a partner booking fee on some partner bookings.
Why it matters: Subtract these before you work out your cents per point. See our cash back vs. travel points guide.
Devaluation
When a program raises the points price of rewards or cuts what points buy.
Example: Aeroplan revised its award chart effective June 1, 2026, raising prices on several long-haul premium routes.
Why it matters: Points can lose value over time. Cash back already credited can’t. See our cash back vs. travel points guide.
Points expiry
When unused points disappear after a period without activity.
Example: Aeroplan’s 18-month inactivity expiry returns on November 30, 2026. Primary holders of a TD, Amex or CIBC Aeroplan card are protected while they remain a cardholder in good standing.
Why it matters: Additional cardholders don’t get that protection, so check your account activity.
Redemption minimum
The smallest amount of rewards you can cash in at once.
Example: Some cards let you redeem from $1. Others make you wait until you have $25 or more.
Why it matters: A high minimum can leave small balances stuck in your account.
Payout schedule
When a cash back card pays you.
Example: Some cards pay cash back monthly on your statement. Others pay once a year on a set statement.
Why it matters: If you plan to close or switch a card, check when the next payout is and what happens to cash back that hasn’t been paid yet.
Sweet spot
A redemption that gives unusually high value for the points.
Example: Some business-class partner flights price well below their cash fare.
Why it matters: Sweet spots change when programs update their prices, so don’t count on one lasting.
Fees, costs and credit
Annual fee
The yearly charge to hold a card. Some issuers waive it in the first year with a welcome offer.
Example: Annual fees on Canadian rewards cards range from $0 to several hundred dollars. Many mid-range rewards cards charge around $120 to $150, sometimes waived in year one.
Why it matters: A fee card only makes sense if it earns more than the fee compared with a no-fee option.
Net value
What your rewards are worth after everything the card costs you.
Example: Net value = rewards earned − annual fees − foreign transaction fees − redemption costs.
Why it matters: Net value, not earn rate, tells you which card actually pays most. See our cash back vs. travel points guide.
Break-even point
The spending level where a fee card starts to beat a no-fee card.
Example: A card with a $120 fee paying 4% competes with a no-fee card paying 2%. The extra 2% covers the fee once you spend $6,000 a year in the 4% categories ($6,000 × 2% = $120).
Why it matters: If you spend less than the break-even, the no-fee card nets more.
Foreign transaction (FX) fee
A charge on purchases in a foreign currency, typically 2.5% on Canadian cards.
Example: Spending $3,000 abroad on a card with a 2.5% fee costs $75. A few Canadian cards don’t charge the fee at all.
Why it matters: The fee can wipe out most of your rewards on travel spending. Read the full guide →
Supplementary card
An extra card on your account for a family member. Its purchases earn rewards into your account.
Example: Some cards add supplementary cards for free; others charge a yearly fee for each one.
Why it matters: Adding a partner’s spending can help you hit caps and bonuses faster, but you’re responsible for the balance.
Income requirement
The minimum personal or household income an issuer lists for a card.
Example: Visa Infinite cards commonly list $60,000 personal or $100,000 household income. World Elite Mastercards commonly list $80,000 personal or $150,000 household.
Why it matters: Check it before applying so you don’t take a credit inquiry for nothing.
Hard inquiry
A credit check recorded when you apply for credit.
Example: The FCAC says inquiries stay on your file for about 3 years with Equifax and 6 years with TransUnion.
Why it matters: Spacing out applications limits the effect on your score.
Credit utilization
How much of your credit limit you’re using, as a percentage.
Example: A $1,000 balance on a $10,000 limit is 10% utilization.
Why it matters: Lower utilization generally helps your credit score. Paying in full each month keeps it low.
Interest-free grace period
The time between your statement and due date when new purchases don’t charge interest if you pay the full balance.
Example: In Canada, the grace period on new purchases is at least 21 days when you pay your balance in full.
Why it matters: Rewards only pay off if you avoid interest. Carrying a balance costs far more than any card earns.
Cash advance
Withdrawing cash or making cash-like transactions with a credit card.
Example: Interest usually starts the day you take the advance, with no grace period.
Why it matters: Cash advances are expensive and usually don’t earn rewards.
Credit card surcharge
An extra fee some merchants add when you pay by credit card.
Example: Canadian merchants can add up to 2.4%, but surcharges aren’t allowed in Quebec.
Why it matters: A surcharge larger than your earn rate means you lose money paying by card.
Programs and card types
Aeroplan
Air Canada’s loyalty program. Points can be earned with co-branded cards from TD, CIBC and Amex, or transferred from Amex Membership Rewards.
Example: Aeroplan points book Air Canada and partner airline flights.
Why it matters: Aeroplan is where travel points can beat cash back, if you redeem well. Read the full guide →
Scene+
Scotiabank’s points program, shared with partners such as Cineplex and Sobeys grocery stores.
Example: Scene+ points are worth 1¢ each when redeemed toward travel. Some cards earn extra points at partner grocery stores.
Why it matters: Scene+ works much like cash back: predictable, with little upside.
Membership Rewards
American Express’s flexible points program, earned on cards like the Cobalt.
Example: Points can go toward statement credits or transfer to programs like Aeroplan at 1:1.
Why it matters: Flexible points keep your options open until you decide how to redeem. See our cash back vs. travel points guide.
PC Optimum
Loblaw’s loyalty program, used at Loblaw stores and Shoppers Drug Mart and earned with PC Financial cards.
Example: 10,000 points are worth $10. PC Financial cards earn extra points at Loblaw stores and at Esso and Mobil stations.
Why it matters: A strong no-fee option if you shop at Loblaw stores.
Avion
RBC’s rewards program.
Example: RBC Avion cards earn 20% more Avion points at Petro-Canada when linked to Petro-Points.
Why it matters: Useful mainly if you already bank with RBC.
BMO Rewards
BMO’s points program, earned on cards like the BMO eclipse Visa Infinite.
Example: NerdWallet values BMO Rewards points at up to 0.67¢ each for eligible travel.
Why it matters: A high points multiplier doesn’t mean high value. Multiply by the point value first.
Journie Rewards
A fuel loyalty program at Chevron, Ultramar, Pioneer and Fas Gas stations.
Example: Linking a CIBC Dividend card adds cents off per litre on top of the card’s rewards.
Why it matters: Free to join and stacks with your card.
Co-branded card
A card issued by a bank together with another brand, like an airline or retailer.
Example: TD, CIBC and Amex all issue Aeroplan co-branded cards.
Why it matters: Co-branded cards add brand perks, like a free checked bag, but lock you into one program.
Visa Infinite, World Elite and other card tiers
Premium card tiers from Visa and Mastercard. They usually come with higher income requirements and more insurance and perks.
Example: Visa Infinite Privilege sits above Visa Infinite; World Elite is Mastercard’s top tier.
Why it matters: The tier tells you roughly what perks and requirements to expect.
Aeroplan preferred pricing
Lower points prices on Air Canada flights for primary holders of Aeroplan co-branded cards.
Example: It applies to the primary cardholder, not additional cardholders.
Why it matters: It can make a co-branded Aeroplan card worth holding even if you earn most points elsewhere.
Free first checked bag
A perk on many Aeroplan co-branded cards that waives the first checked bag fee on Air Canada.
Example: Air Canada charges $45 plus tax for a first checked bag. Some cards extend the perk to companions on the same booking.
Why it matters: For a family that flies once a year, this perk alone can cover a card’s annual fee.
Lounge access
Entry to airport lounges, included with some premium cards.
Example: Some premium travel cards include airline lounge access, or a set number of free lounge visits each year.
Why it matters: Valuable only if you fly often enough to use it.
Merchant acceptance
Which card networks a store accepts.
Example: Loblaw stores and Costco don’t accept American Express. Costco takes only Mastercard credit cards.
Why it matters: A great earn rate is worthless at a store that won’t take the card, so keep a Visa or Mastercard backup. See which stores accept Amex in Canada.