Points 2: Earn Aeroplan Miles with No-Fee Credit Card

In Points 101 I began by saying I like to focus on travel rewards and highlighted three of the loyalty programs most popular with Canadians. Next I'd like to discuss credit cards that earn points and show you how you can earn travel without paying hefty annual fees.

Several Canadian banks issue credit cards that earn 1 Aeroplan mile for every dollar spent. And though they usually come with a sign-up bonus, they also carry an annual fee, generally in the $120 range (plus extra for secondary cards). Since I value an airline mile at about 1 cent (that's open to debate, but let's assume), the sign-up bonus can make the fee worthwhile for the first year, and even thereafter, if you spend over $25K a year. There are other benefits that come with these cards, such as travel insurance, that may have additional value for you, but if, like me, you're not a high roller and don't need those benefits, there's a free way to earn miles.

Remember how in Points 101 I mentioned you can earn Aeroplan miles by shopping at Sobeys? You do this by setting up your Club Sobeys account to automatically convert points to Aeroplan miles (2 Club Sobeys points equals 1 Aeroplan mile). But you can also earn points with a Club Sobeys MasterCard, issued by Bank of Montreal. It gives you 1 Club Sobeys point (equal to ½ Aeroplan mile) for every dollar you spend anywhere. And it's a no-fee card. So, pay $120 year for 1 Aeroplan mile per dollar spend, or pay nothing and get ½ Aeroplan mile per dollar spend. As I say, this could be a good deal if you're putting less than $25K a year on the card.

I got a few thousand Club Sobeys points/Aeroplan Miles when I originally signed up for the card about two years ago. It was issued by Citi Bank then, but this summer Bank of Montreal bought Citi's credit card business in Canada. Next month, I'll receive 2,600 Club Sobeys points (equalling 1,300 Aeroplan miles) when I get my new BMO Club Sobey's MasterCard and make a purchase with it, but you can cash in too. Club Sobeys and BMO have an introductory offer on right now. You'll get a welcome bonus of 2,000 Club Sobeys points/1,000 Aeroplan miles after making a single purchase with the card. You can apply online. Enter offer code CS1.

I carry the Club Sobeys MasterCard as a back-up when I travel, but haven't used it much. That's because I have a free card that earns even more Aeroplan miles (and miles on many other airlines besides, if I choose). I'll tell you about it in part 2.

So, if you're keeping track, I belong to PC points, but only incidentally; I don't actively collect. I don't collect Air Miles, mainly because of poor earning potential where I live. I belong to Club Sobey's, but only to earn Aeroplan miles. I have a Club Sobeys MasterCard, mainly for the sign-up bonuses. Aeroplan is a focus program, but I don't have the annual spending to make paying a $120 annual fee worthwhile when there are cheaper ways to earn miles.