Tuesday, March 17, 2020

Scotiabank raising points requirements for some non-travel redemptions including Points for Credit on May 4


Of course only a few days after we put up our post "In light of what's going on in the world should you shift to a cash back credit card instead of a travel card? Why not a card that has both?" we come to find Scotia Rewards is changing many of their Pay for Credit rates (aka cash back rate), Gift Card rates and Apple/Best Buy Catalog redemption rates. Guess this change was announced back in January and we missed it and Scotia didn't let us know either.

In our piece from earlier this we really focused on the Pay with Points option that many travel rewards and proprietary credit card programs provide as a great stop-gap redemption item in the new world we live in right now. This is where you get to redeem points against almost any purchase you make with a card but still have the choice to redeem for travel or other options. And in our piece we touted that Scotia Rewards was a really good option for paying down your credit card balance to help with your finances and that got devalued - well as of May 4th it does.

These are the old and new Points for Credit rates:
As you can see on the lower level, that is up to 11,000 points there are no changes. But it gets worse from there on in. The $100 redemption Pay with Points level is going up by  about 3.57%, $150 level is up about 2.38% but now the best levels of $300 and $500 are going up by a whopping 14.66% and 14.4% respectively! Those are some big jumps and they are coming at a really bad time! This changes the effective top end cash back rate for one Scotia Rewards points from 0.8 cents to just under 0.7 cents. You may say well point one of a cent isn't much but in reality reaching that $500 level now takes anywhere from $1,800 to $18,000 in more spending dependent on which Scotia credit card you have.

If we look at the top earning Scotia Rewards Card, the Scotiabank Gold American Express Card which earns as much as 5x points per dollar its top end cash back return moves from 4% to just under 3.5%. In the big picture this is still a really good cash back rate, it is essentially equivalent to the American Express Cobalt Card and makes for a good use of your points if the majority of them were earned at the 5x rate. Still it is a hard pill to swallow to lose that half a percent.

For gift cards these are the old and new rates:

As you can see here, every single gift card option is increasing in price. Surprisingly the $500 level takes less points than the $500 level in Points for Credit. You'll come with a 0.71 cents per point redemption value or just over 0.1 cents better than Points for Credit. Overall the gift card changes aren't as drastic as the Points for Credit but it still sees a 9.38% increase at the top level.

Finally if you want to redeem points for Scotia's Apple or Best Buy catalogues you are going to see those redemption rates increase by 14% from 127 points for $1 to 145 for $1.

It really sucks when redemption rates get nerfed like this and it's taking place at a really bad time in the market. Looks like Scotia may be finding the increased earn rates on their Gold American Express card and No Foreign Transaction fees on their two most popular cards are cutting into their revenues and they need to make up for it elsewhere.

As many Canadians are going to be stretching their dollars over the next few months and many are hoping to have their points help them along the way it may be time for Scotia to provide some good will and postpone these changes until late summer or early fall when (hopefully) things are back to normal in this world.

These changes affect all of the following Scotiabank credit cards:

I'm sorry I didn't catch this back in January but hopefully by getting it to you now means that maybe you can get your redemptions in before May 4 so that you can get the most value for your points.

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