In this edition of Head-to-Head, we’ll take a look at two credit cards in the Canadian marketplace that are known for their very strong earnings rates: the American Express Cobalt Card and the Scotiabank Gold American Express.
The Cobalt Card recently underwent some major changes in the summer of 2021 – so how does it now compare to its closest competitor?
While these cards are overall quite similar, there are several notable differences that may sway your decision either way or might even compel you to give both of them a place in your wallet. Let’s compare the two cards in all the ways that matter.
|Credit Card||Best Offer||Value|
|30,000 MR points||$636||Apply Now|
|45,000 Scotia Rewards points||$405||Apply Now|
When deciding between two credit cards, the most important comparisons will always be made on a few key factors.
1. Welcome Bonuses
The Amex Cobalt Card currently offers 50,000 MR points over the course of the first year of card membership:
- 20,000 MR points upon spending $3,000 in the first three months
- 2,500 MR points for each of the first 12 months that you spend $500 (requiring $6,000 of total spend)
Similarly, the Scotia Gold Amex currently offers 50,000 Scotia Rewards points, distributed as follows:
- 30,000 Scotia Rewards points upon spending $1,000 in the first three months
- 20,000 Scotia Rewards points upon spending $7,500 in the first year
Verdict: As you can see, both cards’ current record-high welcome bonuses are comparable to each other.
The Cobalt Card requires a lower total spend over the first year to unlock the full bonus, whereas the Scotia Gold Amex requires a lower upfront spend to unlock the initial chunk of bonus points.
Historically, the two welcome bonuses have also tended to move with each other, fluctuating in the range of 30,000–50,000 points.
Putting aside the relative strength of MR points and Scotia Rewards points for now (which we’ll address later), the two cards are fairly evenly matched here.
2. Referral Bonuses
Like other American Express products, the Amex Cobalt Card offers a referral bonus of 5,000 MR points for each friend or family member you refer to a card of their own, up to a maximum of 75,000 MR points in a calendar year.
Scotiabank credit cards do not offer referral bonuses, so Scotia Gold Amex cardholders would miss out on this method of supercharging their points balances.
Verdict: Only the Amex Cobalt Card has a referral bonus of any kind, so it wins this round handily.
3. Annual Fee
The Cobalt Card operates on a monthly fee model. The $12.99 monthly fee is charged on every statement, and adds up to $155.88 over the course of a year.
Meanwhile, the Scotia Gold Amex has an $120 annual fee, which is charged entirely upfront.
Verdict: Even though the Cobalt’s monthly fee structure works in its favour in that you can pay less fees upfront, its overall price point is still higher. The Scotia Gold Amex wins this round.
4. Earning Rates
This is arguably the most significant comparison for us to look at, since the elevated earning rates on select spending categories is what lies at the heart of both of these cards’ identities.
The Amex Cobalt Card earns you:
5 MR points per dollar spent on groceries and dining
- 3 MR points per dollar spent on streaming services
2 MR points per dollar spent on travel, transit, and gas
1 MR point per dollar spent on all other purchases
The Scotia Gold Amex gives:
5 Scotia Rewards points per dollar spent on groceries, dining, and entertainment
3 Scotia Rewards points per dollar spent on gas, transit, and streaming services
1 Scotia Rewards points per dollar spent on all other purchases
If we put aside the differences in inherent value between MR and Scotia Rewards points for now, and look solely at the earning rates, we see that the two cards match each other at 5x for groceries and dining and at 3x for streaming.
Other than that, the Scotia Gold Amex wins out in the entertainment category (5x vs. 1x) and the transit and gas categories (3x vs. 2x), while the Cobalt wins out in the travel category (2x vs. 1x).
Verdict: Looking at earning rates alone, the two cards are fairly even, especially with the Cobalt Card’s recent improvements with 3x points on streaming) – but the Scotia Gold Amex continues to hold the edge in more categories than the Cobalt.
If you’re someone who wants to use these cards primarily as a vehicle towards higher cash-back on your purchases (perhaps via the refundable hotel trick on either points currency), you’d do better with the Scotia Gold Amex than the Cobalt.
5. Cap on Higher Earning Rates
This is a minor point for the majority of credit card users, but will be of particular concern to those of you transacting at high volumes.
Both of these cards have placed limits on the 5x earning category to prevent people with gargantuan “eats & drinks” purchases from running away with millions upon millions of points.
The Scotia Gold Amex limits cardholders to earning 5x points on the first $50,000 of purchases in the 5x categories every calendar year, while the Cobalt imposes a stricter limit of $30,000 for the card membership year.
Verdict: The Scotia Gold Amex’s higher 5x transaction limit means that those of you with high spending patterns can extract significantly more out of the 5x bonus category on a yearly basis than via the Amex Cobalt.
6. Foreign Exchange Rate
Finally, the Amex Cobalt charges a 2.5% foreign transaction fee on any purchases in a foreign currency, while the Scotia Gold Amex recently moved to eliminating foreign transaction fees, following the trend set by Scotiabank’s other products.
Verdict: The Scotia Gold Amex is the clear winner with a 0% FX fee.
The value proposition of these two credit cards is also closely tied to the redemption possibilities of the points currencies they respectively earn: Amex MR points and Scotia Rewards points. Thus, we must pit these against each other as well.
1. Redemption Methods
As of 2021, the Cobalt Card now earns regular MR points that can be transferred to airline partners like Aeroplan and British Airways Avios at a 1:1 ratio. Combined with the card’s 5x earning rate, this makes the Cobalt one of the most powerful credit cards in Canada.
Aeroplan points, Avios, and other airline transfer partners are best redeemed for high-value flights in business class or First Class. In this fashion, you can often earn a redemption value of 5–10 cents per point (cpp) or greater.
If you aren’t able to locate award availability, the Amex Fixed Points Travel Program can be a useful backup option, capping out at a redemption value of 2 cents per point.
In addition, you also have the possibility of transferring MR Select points to hotel partners, namely Marriott Bonvoy at a 1:1.2 ratio, for luxurious hotel stays that can also fetch top-dollar value.
On the other hand, Scotia Rewards points can only be redeemed to offset against the cost of travel charged to the credit card at a baseline rate of 1 cent per point – a feature that’s also shared by Amex MR points.
Verdict: Both MR and Scotia Rewards points can be cashed out against travel purchases at 1cpp, but MR points can be redeemed for much higher value through airline or hotel transfers, so it’s the clear winner.
2. Ease of Redeeming
There’s also something to be said for how easy it is to redeem your points in either program, and the good news is that both MR and Scotia Rewards allow you to make redemptions pretty effortlessly.
Notably, Scotia Rewards allows you to retroactively use points to offset any travel purchase you make on the card, instead of forcing you to book on points through the bank’s in-house travel agency, and this is a much more favourable scheme than many of its competitors among Canada’s Big 5 banks.
Additionally, both Amex MR and Scotia Rewards can also be effectively treated as cash in your pocket by taking advantage of the refundable hotel trick, so the two programs are evenly matched in that regard as well.
Verdict: Honours even.
Finally, we’ll look at the cards’ ancillary benefits and any other last-ditch considerations that might sway your choice in either of their favour.
1. Travel Insurance
Insurance can be a major factor in choosing a credit card, and the Amex Cobalt and Scotia Gold Amex each have their strengths and weaknesses:
The Cobalt offers up to $5,000,000 in emergency medical insurance for the first 15 days of your trip, while the Scotia Gold Amex offers up to $1,000,000 for the first 25 days of your trip.
The Cobalt does not offer Trip Cancellation/Interruption insurance, while the Scotia Gold Amex offers coverage of up to $1,500 per person with a maximum of $10,000 per group.
Baggage delay insurance is provided by the Cobalt for up to $500, and on the Scotia Gold Amex for up to $1,000 per group, for delays of four hours or more.
The Cobalt’s car rental collision and damage waiver applies on automobiles with an MSRP of up to $85,000, while the Scotia Gold Amex’s equivalent provision is limited to an MSRP of $65,000.
I personally value emergency medical insurance the most, and I’d probably choose to benefit from the Scotia Gold Amex’s coverage, which is less comprehensive in terms of the dollar amount but covers a longer out-of-province trip.
Also note that as with all forms of credit card insurance, the emergency medical insurance applies to you whether or not you booked the trip using the card, while all the other insurance items only apply if you charge the cost of the trip to the card.
In particular, the Amex Cobalt’s insurance perks would apply if you were redeeming MR points (for example via the Fixed Points Travel program), but not if you redeemed any other type of points.
Verdict: I’d place these two cards pretty much on par with each other based on their travel insurance propositions, but the Scotia Gold Amex probably wins by just a hair, thanks to its longer medical coverage and stronger Trip Cancellation/Interruption provisions.
2. Ease of Getting Approved
It’s a rather minor point, but the Scotia Gold Amex imposes a minimum annual income of $12,000 to apply, whereas American Express just doesn’t do minimum income requirements.
Furthermore, Scotiabank requires a minimum credit limit of $5,000 for this card, so your eligibility will depend on whether your credit score is good enough for Scotia to be comfortable extending you that much credit, whereas American Express has no such specifications.
Verdict: Based on the above thresholds as well as anecdotal evidence, American Express’s general leniency across the board in approving new credit applications makes it the winner in this category.
3. Supplementary Cards
The Cobalt Card is one of the few Amex cards to make supplementary cards available for free, whereas the Scotia Gold Amex will bill you $29 per year for every additional cardholder you add.
Verdict: The Cobalt Card is much more friendly to supplementary cards, which can work out well for you in situations when it’s favourable to add as many supplementary cards as possible, such as…
Verdict: While both cards enjoy the savings and bonuses available through Amex Offers, Cobalt cardholders will usually receive a wider range of offers on their accounts, without having to register manually through a separate page.
5. Visual Appearance
The Cobalt has had one of the most striking designs in the credit card marketplace ever since it was introduced, and it recently spruced things up even further with a new-look card that’s 99% made of recycled plastic.
This is of course entirely my subjective opinion, but I’d guess that more people would agree than disagree with me on this point.
Verdict: The Cobalt Card’s visual appearance is in a league of its own, and the Scotia Gold Amex has a long way to go until it can compete with the instantly recognizable midnight-blue gladiator.
The Amex Cobalt Card and the Scotia Gold Amex are both excellent cards thanks to their 5x earning rates on food and drinks, and there are several compelling reasons why you might go for either card over the other.
The Cobalt Card would be a far better choice for those of you seeking high-value travel redemptions, as its MR points are now significantly more powerful than the Scotia Rewards points offered by its opposite number.
However, the equal 5x earnings on the Scotia Gold Amex make it a worthy competitor, especially with its higher limit of $50,000 in annual purchases at the 5x rate compared to the Cobalt Card’s $30,000 annual limit.
If you have consistent high spending in the 5x categories, you’re very likely to benefit from alternating between both cards to enjoy the best of both worlds – especially at this point in time with record-high welcome bonuses on both products.