BMO Cash Back Credit Card review: A cord-cutter’s dream?

The Wells Fargo Active Cash® Card earns 2 percent cash rewards on purchases, covering anything that falls outside the BMO Cash Back Credit Cards' bonus categories. The Active Cash also has stronger cellphone protection coverage but similar intro APR offer to what you’d get from the BMO Cash Back. 

The Chase Freedom Unlimited® offers 1.5 percent cash back on general purchases and 3 percent back on dining and drugstore purchases — two everyday categories missing from the BMO Cash Back Credit Card. The Freedom Unlimited also boasts decent travel protection benefits. 

The Blue Cash Preferred® Card from American Express offers superior cash back on all of the BMO Cash Back Credit Card bonus categories: unlimited 6 percent cash back on select U.S. streaming services, 6 percent back in eligible purchases at U.S. supermarkets (on up to $6,000 per year, then 1 percent) and unlimited 3 percent back at eligible U.S. gas stations and on transit (cash back is received in the form of reward dollars that can be redeemed as a statement credit and at Amazon.com checkout.) The Blue Cash Preferred card even offers a 12-month 0 percent intro APR on both purchases and balance transfers (then a 20.24%-29.24% Variable APR).

Your biggest concern may be the Blue Cash Preferred card’s annual fee, but thanks to its best-in-class cash back rate at U.S. supermarkets, you may earn far more cash back overall despite this fee. Unless you have a high cable or satellite TV bill, it might be hard to earn as much with the BMO Cash Back Credit Card as you would with the Blue Cash Preferred.

However, the BMO Cash Back Credit Card doesn’t limit its eligible streaming services to a specific list like the Blue Cash Preferred card. If you use many of the services not included on the Blue Cash Preferred streaming list, then you may get more out of the BMO Cash Back. If you want a slightly more well-rounded cash back card with more practical spending categories, the Blue Cash Preferred could be a good choice. 

If you prefer sticking to cash back cards with no annual fee, the Capital One Savor Cash Rewards Credit Card (See Rates & Fees) may offer better rewards for your food and entertainment purchases.

Although it earns just 3 percent cash back on popular streaming services and 1 percent on gas, the Savor can outperform the BMO card with unlimited rewards on a wider variety of expenses — including grocery store purchases (excluding superstores like Walmart® and Target®), dining, entertainment and select travel purchases booked through Capital One Travel. The Savor card also gives you more ways to redeem cash back, including automatic redemptions.

You may earn more cash back with the Savor thanks to its wider variety of everyday bonus categories, despite its lower rate on streaming services. However, if streaming accounts for a larger portion of your budget, the BMO Cash Back might be a better fit.

This card’s list of eligible streaming services, cable and satellite TV services includes but is not limited to:

•  Netflix
• Apple Music
• AT&T TV NOW
• CBS All Access
• Disney+
• ESPN+
• Hulu
• Pandora
• Paramount+
• Showtime
• Sling TV
• Spotify
• Starz
• SiriusXM
• Vudu
• YouTube TV
• Tidal

Although this list is missing some popular streaming, cable and satellite TV services (such as Amazon Prime Video or Peacock), they may still be eligible for bonus cash back based on their merchant category codes (MCC).

You’ll have the best approval odds if you apply for the  [sc code='credit_card' pid='238811207' field='name' with a good to excellent credit score (a FICO score of 670 or higher, or a VantageScore of 661 or higher).

You can redeem the cash back you’ve earned with the BMO Cash Back Credit Card by logging into your BMO account, going to the “Account Details” page and selecting “View and Redeem.”

Then, you’ll be able to redeem your cash back as a statement credit that will be applied to the account that earned the cash back. Once you’ve redeemed your rewards, you’ll receive your cash back within the next seven to 10 business days.

The primary criteria for a rewards or cash back card’s rating is its rewards value. This includes the card’s average rewards rate, estimated annual rewards earnings, sign-up bonus value and reward redemption value.

To estimate a card’s average annual rewards earnings, we first calculate its average rewards rate based on how much it earns in different bonus categories and how closely its categories align with the average person’s spending habits, according to data from the Bureau of Labor Statistics. 

Based on this data, we determine a “chargeable” spend (which purchases are likely to be put on a credit card and earn rewards). This includes the following spending by category:

• Groceries: $5,200
• Dining out: $3,000
• Entertainment: $2,500
• Gas: $2,100
• Apparel and services: $1,700

Using this data, we assign a weighting to each of a card’s bonus categories. For example, a card’s grocery rewards rate receives a 23 percent weighting based on how much of the average person’s budget is spent on groceries. We also estimate the redemption value of points or miles from various issuer, airline and hotel rewards programs.

This weighting and rewards valuation allows us to estimate a card’s average annual rewards earnings — how many points or miles you’d earn with a given card if your spending was about average and you used the card for all of your purchases, as well as what those points are worth. We also use point valuations to determine a card’s sign-up bonus value

With these calculations complete, we assign each card a score based on how its average rewards earnings, sign-up bonus value, rewards rate and redemption value stack up against other rewards cards.

We also rate cards based on how much it costs to keep them in your wallet or carry a balance. 

To start, each rewards or cash back card is scored based on whether it offers an intro APR and how its ongoing APR compares to the rates available on other rewards or cash back cards. 

We also score each card based on how its annual fee influences its overall value. 

We consider a card’s annual fee in two ways — how it ranks relative to the fees you’ll find on other cards in the category and how it impacts a card’s overall rewards value. Cards with an annual fee will always be at a slight disadvantage in our scoring system since annual fees inherently cut into your rewards value, but if a card offers terrific value via its ongoing rewards and perks, it can earn a high score even if it carries a high annual fee. 

With this in mind, we rate a card based primarily on how its ongoing rewards value and ongoing perk value (such as annual credits or bonuses) stack up against other cards in the category when you subtract its annual fee.

We rate each card’s flexibility based on the restrictions it imposes on earning and redeeming rewards and factor this rating into a card’s overall score. 

Flexibility factors include whether a card only allows you to earn a high rewards rate on a small amount of spending or requires you to meet a certain earning threshold before you can redeem rewards. We also examine whether your points are worth less when you redeem for some options versus others and whether a card gives you the flexibility to transfer rewards to airline and hotel partners. 

We also score each card’s set of features – its perks and benefits — against five tiers of features to provide a rating. 

We break down these tiers as follows:

• Tier 1 has less than standard card features (an ultra-streamlined card that offers basic utility and next to nothing in the way of ancillary benefits. 
• Tier 2 includes the benefits you’d expect on standard Visa or Mastercard credit cards, such as free access to your credit score, car rental insurance and $0 liability for fraudulent charges. 
• Tier 3 includes “prime card” or better-than-average card features like cellphone insurance, lost luggage insurance, concierge services and purchase protection. 
• Tier 4 includes luxury features such as airport lounge access, elite status with an airline or hotel and credits for expedited security screening membership programs. 
• Tier 5 includes the sort of exemplary benefits you’ll find on top-tier luxury cards, such as high-value travel credits, cardholder memberships and other unique and valuable perks.