In late 2022, RBC announced its plans to acquire HSBC Bank Canada.
Since then, the acquisition has been approved by the Canadian government, albeit with a laundry list of conditions, and RBC has been preparing to finalize the acquisition.
With the completion of the transition imminent, new details have been trickling in regarding the future of HSBC Canada’s products, including those pertaining to the much-beloved HSBC World Elite Mastercard.
RBC to Transition HSBC Cardholders by March 2024
Recently, HSBC customers have been receiving communication regarding the upcoming acquisition by RBC.
At first, emails were sent to update customers that the acquisition had received regulatory approvals, and that cardholders would receive further communication about the transition plan.
More recently, customers have been receiving a packet in the mail detailing what will happen to their existing products.
Of particular interest to the Canadian Miles & Points community is the transition plan for the HSBC World Elite Mastercard, which has long been a keystone travel credit card, with its no foreign transaction fees, flexible HSBC Rewards points, and many other features.
In the information packet sent out by mail, it was learned that legacy cardholders of the HSBC World Elite Mastercard will be transitioned to the RBC® Avion Visa Infinite†.
The packet also outlines a number of other important details about features of the transitioned card, which we’ll discuss below.
Card Features
Once transitioned, the RBC® Avion Visa Infinite†will feature no foreign transaction fees, as was the case with the HSBC World Elite Mastercard. However, this isn’t a feature that’s available to “standard” RBC® Avion Visa Infinite† cardholders who didn’t previously have the HSBC World Elite Mastercard, and it’s only for those transitioning from the HSBC World Elite Mastercard.
When it comes to the HSBC World Elite Mastercard’s $100 annual travel enhancement credit, there will be a one-time travel credit available for use in the Avion Rewards travel portal for hotels and cars only. The credit to be available is the sum of any remaining value from the HSBC travel enhancement credit, plus $100 (CAD).
At most, this means that you’ll have a $200 (CAD) travel credit available to use for hotels and cars in the Avion Rewards portal as a one-off benefit.
The credit will be valid for up to one year following the card migration date, and unfortunately, it won’t be an ongoing benefit.
Among the ancillary features of the HSBC World Elite Mastercard are the pay-per-access DragonPass membership and Boingo Wi-Fi access. Sadly, no similar benefits are attached to the transitioned RBC® Avion Visa Infinite†.
Earning Points
RBC has stated that any remaining HSBC Rewards points will be converted to Avion Rewards points at a “comparable value.” However, details of the conversion rate haven’t been communicated yet, but we can expect to learn more soon.
If you have points sitting in your HSBC Rewards account, it’s best to wait until an announcement before taking any further action.
When it comes to earning rates, it appears that the transitioned cards will adopt the default earning structure of the RBC® Avion Visa Infinite†, which is as follows:
- 1.25 RBC Avion points† per dollar spent on qualifying travel purchases
- 1 RBC Avion point† per dollar spent on all other qualifying purchases
For comparison, the earning rate on the HSBC World Elite Mastercard was as follows:
- 6 HSBC Rewards points per dollar spent on eligible travel purchases
- 4 HSBC Rewards points per dollar spent on eligible gas, groceries, and drugstore purchases
- 2 HSBC Rewards points per dollar spent on all other eligible purchases
At a minimum, the corresponding minimum redemption value for HSBC Rewards points is 3%, 2%, and 1%, respectively, since you can redeem them at a rate of 0.5 cents per point against travel purchases.
Meanwhile, the minimum redemption value of RBC Avion points earned on the transitioned cards is 1.25% and 1%, respectively. This is because you can redeem RBC Avion points at a rate of 1 cent per point against travel purchases.
This means that HSBC cardholders will be losing out on an accelerated earning rate on eligible travel, gas, groceries, and drugstore purchases.
To use a different value comparison, we value RBC Avion points at 2 cents per point, and HSBC Rewards points at 0.8 cents per point. These elevated values above the baseline are due to the flexible nature of both points currencies, which can be transferred to airline programs, as well as the respective transfer ratios to partner airlines in both programs.
Even though we value RBC Avion points more than HSBC Rewards, when you consider the earning rates on both cards, the HSBC World Elite Mastercard had more valuable returns, as per our valuations.
Insurance Coverage
Starting March 31, 2024, the insurance coverage for RBC® Avion Visa Infinite† will take effect for new purchases made on the card.
It’s worth noting that there are some notable differences in insurance coverage between the two cards, while in other cases it’s comparable.
With the HSBC World Elite Mastercard, cardholders and dependents are covered for travel emergency medical insurance for the first 31 consecutive days of a trip for those under 65, and the first 21 consecutive days for those over 65.
Meanwhile, with the RBC® Avion Visa Infinite†, cardholders and dependents are covered with travel emergency medical insurance for only the first 15 consecutive days for those under 65, and the first three consecutive days for those over 65.
Other Cards
If you hold the HSBC +Rewards Card, you’ll be transitioned to the RBC® ION Card, with the annual interest rate kept at 11.90%.
If you hold the HSBC Metal World Elite Mastercard, you’ll be transitioned to the RBC Avion Visa Infinite Privilege for Private Banking credit card, with the following features:
- No annual fee (regularly $399)
- No foreign transaction fees
- $400 Avion Rewards travel credit (one-time only; $200 + any remaining credit from your HSBC Metal World Elite Mastercard)
- Six free lounge visits through the Visa Airport Companion Program (DragonPass)
It’s not clear if all HSBC Metal World Elite Mastercard-holders will receive this offer, or if this is exclusively for customers eligible for Private Banking.
We’ve yet to confirm details regarding the fate of all other HSBC credit cards.
If you’ve received transition offers for any other HSBC product, please feel free to reach out so we can update this article.
HSBC Canada’s Transition to RBC
As part of the conditions placed on RBC’s acquisition of HSBC Canada, cardholders were supposed to receive “substantially similar benefits” on the RBC cards to which they’re being transferred.
With this in mind, the only substantially similar benefits on the RBC® Avion Visa Infinite† to which cardholders of the HSBC World Elite Mastercard are being transferred are the no foreign transaction fees, and that it earns flexible points that can be redeemed in a variety of ways.
Otherwise, there’s certainly an argument to be made that the benefits offered on transitioned RBC cards aren’t substantially similar.
For example, the HSBC World Elite Mastercard offered a $100 annual travel enhancement credit. The RBC® Avion Visa Infinite† is only offering this as a one-time benefit worth up to $200, but it won’t be a mainstay feature on the card in the years to come.
In terms of earning rates, the HSBC World Elite Mastercard’s three-tiered earning structure offered minimum returns of 3%, 2%, and 1%, whereas the RBC® Avion Visa Infinite† offers a minimum return of 1.25% on travel purchases, and 1% on everything else.
Likewise, cardholders will no longer enjoy complimentary Boingo Wi-Fi on eligible flights and at Boingo hotspots worldwide, and nor will they enjoy a complimentary DragonPass membership (even if it was on a pay-per-use basis).
One of the biggest strengths of the HSBC World Elite Mastercard was that you could earn flexible HSBC Rewards points on out-of-country spending without incurring foreign transaction fees. Plus, the category multipliers counted when abroad, so paying for hotels, car rentals, and any other travel expenses resulted in a great return in the form of points.
With the transitioned version of the RBC® Avion Visa Infinite†, you’ll still enjoy no foreign transaction fees and earn flexible points; however, it’ll be at a lower rate when it comes to travel, gas, groceries, and drugstores, both at home and abroad. And many of the HSBC World Elite Mastercard’s other attractive features will no longer be available.
In Canada, we aren’t as blessed as our neighbours to the south with a bounty of travel credit cards that offer no foreign transaction fees, flexible points with competitive earning rates, and other features that are useful to travellers. Indeed, these reasons made the HSBC World Elite Mastercard so attractive.
With the upcoming loss of the HSBC World Elite Mastercard, and the parallel loss of many of its most attractive features, there’s plenty of room for a new player to step in to compete with Scotiabank’s no foreign transaction fee cards, which remain the best available in Canada.
Without a welcome bonus offered to transitioned cardholders, it’s also worth considering simply applying for an RBC® Avion Visa Infinite† product before the transition happens, especially since the cards are currently offering a record welcome bonus.
In the coming days, we should get an idea of what will happen to HSBC Rewards, and we’ll update this article with our recommendations as soon as we learn more.
If you’re not satisfied with the transition, refer to information about filing complaints listed on the Financial Consumer Agency of Canada’s website.
Conclusion
RBC is in the final stretch of acquiring HSBC Canada. By the end of March 2024, all HSBC Canada clients will have been transitioned to RBC products.
We now know some details about the transition to RBC for cardholders of the HSBC World Elite Mastercard, who will move to a special version of the RBC® Avion Visa Infinite†.
Fortunately, converted cards will feature no foreign transaction fees; however, the rest of the features will be changed, including losing the $100 annual travel enhancement credit after a one-time courtesy.
More details about the acquisition are expected in the coming days, including the future of HSBC Rewards points.
