National Bank's new 5x points multiplier may not be as good as we originally thought

Earlier this week we reported changes coming to some of National Bank's credit cards including a new 5x points earn rate on the World Elite Mastercard. There was a lot of excitement surrounding this announcement, even from us but that may have been a little premature! I'll be honest with you I should have paid closer attention to wording around the new 5x points earning rate. As noted by the always astute Josh C. the 5x points on grocery and dining isn't actually capped at $2,500 per month for those categories but rather $2,500 of all your spending. So if you happen to spend $2,500 on some nice new furniture on your card your 5x points earn rate for groceries is gone for that month!

Here is the wording from National Bank of Canada about the earn rate change on the page that details the changes and the part we should have paid closer attention to:

The amount of points earned on grocery and restaurant purchases depends on the total gross monthly amount charged to the credit card account, regardless of the purchase category. You will earn 5 points for every dollar in eligible grocery and restaurant purchases until a total of $2,500 in gross monthly purchases is charged to the account. After that, you will earn 2 points per dollar in eligible grocery and restaurant purchases

Bolding is mine

What this means is that you will earn 5x points for whatever portion of your $2,500 spend that month is on groceries and restaurants. AFTER that $2,500 is hit any grocery and restaurant purchases made will earn 2x points. 

Here is a monthly spending example provided by National Bank where the total monthly spend exceeds that $2,500 mark. This is in chronological order of spending:

• $800 in groceries: 800x5= 4,000 pts
• $200 in gas: 200x2 = 400 pts
• $400 in recurring bill payments: 400x2= 800 pts
• $500 in other purchases: 500x1 = 500 pts
• $700 in groceries: 700x5=3,500 pts (even if the amount exceeds the $2,500 cap, the entire transaction will accumulate the 5 pts/$ spent)
• $100 in gas: 100x2 = 200 pts
• $500 in restaurants: 500x2 = 1,000 pts (because the total gross monthly amount charged to the credit card account is over $2500, regardless of the purchase category, these groceries&dining purchases and next purchases in that category are now at 2 pts/$ spent)
  

Total expenses charged to the account in the month: $3,200
Total points earned in the month: 10,400 points

So as you can see by the example from National Bank, if you are at, say $2,450 in spending for that month and go buy $250 of groceries you will still earn the 5x on that transaction since your account wasn't at the $2,500 of spending yet. 

Wrapping it up

While the new 5x points multiplier is a nice addition to the World Elite Mastercard it is clear that unless you only use your card for dining and groceries and only for around that maximum of $2,500 spend monthly you'll be eating away at your potential for earning the maximum points possible. In some ways it almost seems like they are encouraging the cardholder NOT to spend a lot on their cards outside of those categories!