The Smart Spending Guide for Newbies: Turn Everyday Purchases Into Rewards – MoneySense

This guide breaks down which daily spending categories deliver the best rewards, how to choose a rewards program that suits your needs, and practical tips to help you build credit faster while keeping more money in your pocket.

Daily spending categories that deliver the best rewards

If you’re new to Canada, chances are you’re already spending in many of these categories. Take a look at the list below and think about where most of your money is going. These are the areas where the rewards can add up the fastest.

• Groceries: Weekly grocery shopping is often one of the largest household expenses, making it one of the easiest ways to earn significant rewards.
• Transport: Paying for monthly bus passes, rides, gas, and parking is another big budget that can really add up. For example, if you use the RBC More Rewards Visayou’ll earn 5 points per $1 spent on gas, EV charging, dining, and purchases at grocery stores and pharmacy partners.
• Restaurants and restaurants: Whether you want to grab a quick bite to eat or stop at a coffee shop for your morning espresso, you can earn rewards.
• Drugstores and pharmacies: As you feel more at home, you can spend more on household and health items. This is another important reward category that you can take advantage of.
• Recurring invoices: Monthly expenses like your cell phone, internet, streaming services, and utilities may seem small on their own, but they add up over time.
• Online shopping and services: While most credit cards don’t specifically reward online shopping, almost all cards earn basic rewards for online purchases.

Essential vs. Lifestyle Purchases (and How to Optimize Both)

If you’re like many newcomers, you’re probably trying to stick to a budget. Part of holding yourself accountable is distinguishing between wants and needs.

Essentials

Essentials fall right into the category needsSince these are things you do need to buy, we’re talking about food, transportation, and household necessities. Utilities are recurring bills that also qualify as needs (although something like streaming services falls into the “wants” category).

Since you know you need to make these purchases, look for a rewards credit card that offers these offers highest reward rates for these essentials. You’ll get the most back for your purchases, and relying on one primary rewards credit card can help you track your spending and stay on budget.

The RBC Ion+ Visa gives 3x the Avion points for every $1 you spend groceries, gas, dining, food delivery, ride sharing and streaming services. For all other purchases, you earn 1 point per €1. So you can see how quickly you earn points with a credit card that prioritizes everyday spending.

Lifestyle purchases

When you think about wishing, eating out, seeing movies or concerts, and decorating your home all count as things that are fun to do, but not essential. However, you can still earn rewards by using the right credit card.

Since these may be occasional purchases in the first few months after settling in Canada, you may want to get a credit card that will allow you to fixed rate for all spending categorieslike the RBC Cashback Preferred World Elite Mastercard. You get a constant 1.5% cashback on all your purchases And needs.

How flexible rewards evolve with spending trends

When you first get a credit card after arriving in Canada, it’s natural to focus on a few key spending categories, but your budget and priorities will likely evolve. You may spend more on settlement costs and transport in the first few weeks. Over time, groceries and household expenses often take up a larger portion of your budget, followed by larger lifestyle purchases.

As your expenses change, so will the way you use your rewards. Early on, cashback applied to your credit card balance may be the most useful option. Later, you may prefer the flexibility to book travel, purchase merchandise, choose gift cards, or combine different redemption options.

The strongest flexible rewards programs will help you too more value from your spend through vendor offers and seasonal promotions. The most important thing is that they give to you control over how you redeem your rewards. For example, RBC’s Avion Rewards program lets you book flights, transfer points to airline partners, donate points to charity, use them for financial products, purchase merchandise or gift cards, or redeem them as statement credits so your rewards can grow with you.

6 smart spending strategies for newcomers

Using the right credit card isn’t the only financial step you need to make. Here are some of the most effective strategies for managing your money as a newcomer:

• Take advantage of welcome offers: If you open a credit card (or even a bank account), most issuers offer you the opportunity to earn a limited-time bonus for reaching spending milestones. Keep these promotions in mind when making purchases, but don’t overspend in pursuit of the rewards.
• Track your early spending habits: If you’ve been using a credit card for a month or two, take some time to identify your high-income categories. You might decide that another credit card would reward you better, or you might discover that you are indeed using the best card for you.
• Charge your everyday purchases and recurring bills to a savings card: Earn rewards for the things you need to buy. This is a smart move, as long as you pay off the card every month. It also simplifies bill payment.
• Pay on time: Whether you have a credit card bill or a recurring utility payment, prioritize paying your bills on time and in full. This helps you build a solid credit score, which can help you get better interest rates down the road.
• Don’t spend more than you can pay back: If you carry a balance or pay late fees, interest charges quickly erase the value of any rewards you earn. Rewards only make sense if you pay your credit card balance in full and on time every month.
• Use digital tools to budget: When choosing a bank, familiarize yourself with the online tools and mobile app. This makes it easy for you to track your spending and stay on top of the rewards you’ve collected.

If there is one piece of advice you should remember, it is this: always make at least the minimum payment on your credit card on time. Even if you can’t pay off the full balance each month, paying the minimum will prevent negative information from being reported to Canada’s credit bureaus.

Building your personal goals starts with smart money habits and laying a strong financial foundation in Canada from the start.

Read more about credit cards: