Spend to save: Is it really such a good idea? An analysis of debit card savings programs and credit card cash back reward programs


Jean-François Vinet, Élise Thériault


Option consommateurs




In this study, Option consommateurs focussed on the advantages and disadvantages of debit card savings programs and credit card “cash back” rewards programs.

While debit card savings programs do allow consumers to save small amounts, which in itself is a good thing, they nonetheless have certain drawbacks. For example, the increased use of this card can cost you money, the interest rates offered on the savings are not necessarily competitive, and the amounts saved are difficult to calculate. For these reasons, Option consommateurs recommend that consumers check whether a conventional savings program might not be a better option if one intends to save regularly, even for small amounts.

Credit card “cash back” rewards programs can be advantageous if cardholders pay off the full balance before the due date, do not use their cards to spend more than they normally would and respect the conditions listed in their agreement for obtaining these rewards. Option consommateurs noted that many consumers encountered in the focus groups and those surveyed by another consumer association say they are pleased with credit card rewards programs.

However, the public could be misled by the terminology used to promote the credit card rewards program. In fact, even though certain financial institutions use the terms “cash rebate,” “cash dollars” and “cashback” in the names and descriptions of their programs, the rewards members receive are never in the form of a check or cash, but of credit added annually to their credit card balance. For this reason, Option consommateurs is asking the Competition Bureau to consider whether the information used to promote these products complies with the laws whose implementation it oversees.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

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Source: Consumer Policy Research Database

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