A pedestrian walks past a TD Bank branch in downtown Calgary, on Feb. 12.Amir Salehi/The Globe and Mail
Toronto-Dominion Bank recently announced changes to its TD First Class Travel Visa Infinite Card and, shockingly, there are no significant downsides.
Cardholders will soon earn more points on public transit, streaming, digital gaming, media, and drink purchases. In addition, they’ll receive free airport lounge passes. And while this all sounds good, it’s always worth delving into the details to see if TD Rewards cards are your best option.
Increased earning rates
Starting April 30, TD First Class Travel Visa Infinite cardholders will earn more points on select categories.
You’ll earn six TD Rewards points per dollar spent on public transportation – such as subway, bus, railway, and ferries; six points on drinking places, including bars, clubs, and cocktail lounges; and four points on streaming, digital gaming and media, such as cable and other streaming services, in-game purchases, and e-books. Each of these new categories has a spending cap of $25,000 annually. Once you reach that cap, you’ll earn two points per dollar spent.
These new earning rates are in addition to the current – and unchanged rates – of eight points per dollar spent on Expedia for TD bookings, six points on groceries and restaurants, four points on preauthorized purchases, and two points for every dollar spent on all other purchases.
These changes are surprising because they’re all positive. The only negative news is that the annual interest rate will increase by 1 per cent for purchases, purchases due to missed payments, and, in Quebec only, cash advances.
Now compare TD’s changes to BMO’s recently announced adjustments to its BMO eclipse Visa Infinite Card.
As of Feb. 3, cardholders earn five times the points on groceries ($6,000 annual cap), dining ($6,000 annual cap), gas ($20,000 annual cap) and transit ($20,000 annual cap). Once you reach the cap, you earn one point per dollar spent. Previously, the categories had a combined cap of $50,000. The current overall cumulative cap is higher, but the ones people will care most about – grocery and dining – have a significantly lower cap.
In addition, BMO has announced that, as of May 1, Premium or Performance Plan account holders must spend a minimum of $15,000 within a 12-month period to receive the $120 credit card annual fee rebate.
These are two very different paths that the banks have taken. TD has surprised its customers by offering additional value at no additional cost, while BMO has given its cardholders more than enough reasons to consider other travel credit cards.
Overrated airport lounge access
Another new benefit for TD First Class Travel Visa Infinite cardholders is the four complimentary airport lounge visits each year. These passes – valued at approximately $280 – offset the card’s annual fee of $139.
While adding lounge access to TD’s flagship travel credit card makes sense on paper, the reality is that lounges in Canada are overcrowded or require a long wait to get in. That’s because every major financial institution in Canada has a credit card that offers lounge access. When everyone can get into a lounge, it’s no longer special.
A more impactful benefit may have been to give cardholders a free Deluxe TD Auto Club Membership, which provides emergency roadside services. Even though the TD Cash Back Visa Infinite Card already offers this perk, giving it to TD First Class Travel Visa Infinite cardholders could have been a good way to showcase TD Auto Club services.
Make sure the rewards are right for you
Although these changes are good, it’s important to consider how you can use your points to determine whether the credit card and program are right for you.
With TD Rewards, you can redeem 200 points for $1 in Expedia for TD purchases. That gives your points a value of .5 cents (half a cent) each. That’s a respectable value considering the new earning rates.
Even though Expedia for TD has fair prices, it may not always be the lowest. Additionally, since you’re booking through a third-party provider, you may not be able to use any status benefits you have. For example, if you have Marriott Bonvoy status, you must book your stays directly through Marriott to get your perks.
TD does allow you to apply your points to other travel purchases, but the redemption value is 250 points for $1 – a value of 0.4 cents (less than half a cent) per point. That’s a 20-per-cent devaluation compared to Expedia for TD purchases.
Naturally, cardholders should only use their points on Expedia for TD, but anyone who prefers full flexibility may be better off with a program such as American Express Membership Rewards since you can redeem your points on any purchase.
Barry Choi is a personal finance and travel expert at moneywehave.com. He was previously affiliated with TD, BMO and American Express but currently has no relationship with any of the brands mentioned.
