You are reading the title right, not only can you get an American Express card issued from the parent company, you can now get an AMEX with Scotiabank. As with most AMEX products, the value to the card holder is relatively high, but because the merchant fees are typically higher than Visa/MasterCard, acceptance can be relatively limited.
In this case, the Scotiabank Gold American Express is a travel rewards card that is relatively flexible with generous rewards and insurance package, but it comes with a $99 annual fee (+$29 for secondary holder). In a lot of ways, this card has a similar reward structure as another Scotia Card, the popular Scotia Momentum Visa Infinite card. However, lets take a closer look at the Scotia AMEX card.
For the Scotia AMEX, card holders get “points” for their spending. The biggest attraction of this card is the 4 points per $1 spent in gas/groceries/restaurants/entertainment which equates to a 4% return.
- 4% return (towards travel) when using the card on gas/groceries/restaurants/entertainment (up to $50k/yr in spending, then reverts down to 1%); and,
- 1% return on all other spending.
- Earn up to 40,000 bonus Scotia Rewards points in your first year (that’s up to $400 towards travel) – End date: August 31, 2021.
Another key criteria for a good rewards card is the redemption system. Some cards offer great rewards, but redemptions are restricted which can make the card less useful (think aeroplan cards). This card allows you to book your travel first, then go online (or phone) and redeem your points with a minimum of 5000 points at a time ($50 worth). Points can be redeemed against travel which includes flights, cruises, bus lines, railways, hotels, and rental cars.
In addition to the rewards and redemption system, the insurance package is as good as it gets. The insurance coverage includes:
- Travel Emergency Medical (up to $1 million, under age 65 for up to 25 days, over age 65 for up to 10 days);
- Trip Interruption and Cancellation (up to $2,500 per person or $10,000 maximum);
- Flight Delay (after 4 hours, max $500/trip);
- Delayed and Lost Baggage (up to $1,000 per trip);
- Common Carrier Travel Accident (up to $500,000);
- Rental Car Collission/Loss Damage;
- Hotel/Motel Burglury (up to $1,000);
- Purchase Security and Extended Warranty (doubles warranty up to 1 year); and,
- Price Protection (max $100 per claim, up to $500/yr).
To me, the downsides of this card are that of lack of AMEX acceptance and the annual fee ($128 for two cards). The rewards system and insurance are top notch, but if the cardholders shopping is limited by merchants not accepting AMEX, then it will significantly reduce the return.
While most big brand names will accept AMEX, the constraint is that you need to find the 4% merchants that also take AMEX. For example, we spend a lot of our budget at Loblaws (Dominion here in NL) and Costco. Loblaws (and affiliated companies) do not accept AMEX, and while Costco accepts AMEX, they are not considered a 4% merchant (1% return).
Who are the direct rivals of this card? One of them is the American Express SPG card which can return from 2%-6% if the rewards are redeemed wisely (eg. cash and points). At least with the SPG card, you will get the high rewards at any merchant that will accept AMEX. However, the redemption is relatively limited to SPG hotels and partner airlines.
Other competition is Scotia’s own Momentum Visa Infinite card. While this is a cash back card, it has a similar annual fee and it will give you 4% return on gas/grocery spending, 2% on drug stores and recurring payments, then 1% on everything else. The big advantage here is the it is a widely accepted Visa, however, the insurance benefits are lacking for a fee based card.
Finally, I would say that the Capital One Aspire Travel World is also in the same league. Similar annual fee for two cards, up to 2% towards travel if redeemed properly, and a comparable insurance package. Again, the advantage here is that MasterCard is widely accepted, however, the redemption system to truly maximize the 2% return can be a bit tricky to achieve.
Who can take advantage of the Scotia Gold American Express? Heavy grocery/gas/groceries/entertainment spenders who shop at retailers that accept AMEX. Unfortunately, this isn’t as widespread as it could be. According to our latest budget, our groceries/gas/restaurants/entertainment worked out to be about $17,000 per year, which at 4%, is $680 worth of travel. However, in order to get that reward, we would need to change our grocery store because Loblaws/No Frills does not accept AMEX and while Costco does accept AMEX, they are not considered a 4% retailer. While most gas stations and movie theaters will accept AMEX, a lot of smaller restaurants will not. So in theory, this is a great card, but AMEX acceptance can make or break the deal.
If you are heavy grocery/gas spender, and willing to pay an annual fee, then the Scotia Momentum Infinite cash back Visa card may be a better choice. If you are set on travel rewards, then the Capital One Aspire Travel World is very competitive. If you are like me and have a hard time paying an annual fee, then check out my list of the top free cash back credit cards in Canada.
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