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 generous elevated earnings rates: the American Express Cobalt Card and the Scotiabank Gold American Express.
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.
When deciding between two credit cards, the most important comparisons will always be made on a few key factors: namely, the welcome bonus, the annual fee, and the earning rate on purchases.
1. Welcome Bonus
The Amex Cobalt Card offers 30,000 MR Select points over the course of the first year of card membership, distributed over the first 12 months. That means that you’ll earn 2,500 MR Select points every calendar month that you meet the monthly minimum spending of $500, and you’ll only claim the full signup bonus upon reaching a full year of card membership.
The Scotia Gold Amex currently advertises a welcome bonus of 30,000 Scotia Rewards points (if you apply before December 30, 2019), although you’ll only earn 25,000 points upon spending $1,000 in the first three months, and the final 5,000 points are only delivered upon spending a whopping $10,000 during the first year. Needless to say, that’s an insanely high spending threshold purely to earn an additional 5,000 Scotia Rewards points.
Verdict: Both cards are strong in some ways and weak in others. The Cobalt gives you a higher realistic signup bonus of 30,000 MR Select points (and the Perkopolis or TicketMaster offers may raise that value proposition even further), although the Scotia Gold Amex’s signup bonus can be claimed entirely up front instead of being distributed over the course of 12 months. Factoring in the higher utility of MR Select points over Scotia Rewards points (which I’ll address further in the article), I’d say the Cobalt wins this round.
2. Annual Fee
Similar to the welcome bonus and minimum spending, the Cobalt’s annual fee is also split into 12 monthly chunks of $10 each. Meanwhile, the Scotia Gold Amex has an equivalent $120 annual fee, which is charged entirely upfront.
Verdict: While both cards have the equivalent of a $120 annual fee, the Cobalt’s monthly fee structure works in its favour. If you merely want to hold onto the card for a few months before ditching it, you can do so and get away with paying less in fees.
3. 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 Select points per dollar spent on groceries and dining
2 MR Select points per dollar spent on travel, transit, and gas
1 MR Select 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 Select and Scotia Rewards points for now, and look solely at the earning rates, we see that the two cards match each other at the 5x for groceries and dining. Other than that, the Scotia Gold Amex wins out in the entertainment category (5x vs. 1x), the transit and gas categories (3x vs. 2x), and the streaming services category (3x vs 1x), while the Cobalt wins out in the travel category (2x vs. 1x).
But if you’re a savvy points earner, you wouldn’t be using the Cobalt for your travel purchases anyway, because you could do better by earning regular MR points on the Platinum or Gold Rewards Card instead. And so…
Verdict: Looking at earning rates alone, the Scotia Gold Amex edges out the Cobalt in several categories. 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.
4. 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.
5. 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 Select points and Scotia Rewards points, and thus we must pit these against each other as well.
1. Redemption Methods
Both MR Select points and Scotia Rewards points can be offset against the cost of travel charged to the credit card at a baseline rate of 1 cent per point (cpp).
So if you charged $300 of travel purchases (whether it’s flights, hotels, Airbnbs, ferries, trains, etc.) to either your Amex Cobalt or your Scotia Gold Amex, you’d be able to redeem 30,000 of their respective points currencies against the purchase and wipe it off your bill.
On top of this, MR Select points also have two additional compelling redemption avenues that may well provide higher than 1cpp in value. One is Amex Fixed Points Travel, which allows you to redeem MR Select points for round-trip economy class or business class airline tickets departing from Canada at certain fixed ratios, based on the price of the ticket if booked with cash. Through Fixed Points Travel, you can often redeem your Cobalt points for as high as 1.5cpp, 1.8cpp, or even 2cpp in the short-haul economy class category.
You’ll need to be judicious about when you transfer the points, though: only make the transfer when you’ll be getting sufficient value out of your Bonvoy points. This post on the best ways to use Cobalt points should shed more light on this topic.
Verdict: Both MR Select and Scotia Rewards points can be cashed out against travel purchases at 1cpp, but MR Select can do much better as well via the Amex Fixed Points Program and Marriott Bonvoy 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 Select 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 insurance, while the Scotia Gold Amex offers coverage of up to $2,500 per person with a maximum of $10,000 per group
Both cards offer Trip Interruption insurance of up to $500
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 Trip Cancellation provision.
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 when Amex runs particular promotions in which it’s favourable to add as many supplementary cards as possible.
4. Visual Appearance
Scotiabank may have tried to jazz up the Scotia Gold Amex’s appearance in its most recent redesign this year, but the Cobalt has had one of the most striking designs in the credit card marketplace ever since it was introduced. 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 as much as the Scotia Gold Amex’s recent redesign improved upon the previously rather drab appearance, it still has a long way to go until it can compete with the instantly recognizable midnight-blue gladiator.
Both cards are appealing for their powerful 5x earnings on food and drinks – on one hand, the Scotia Gold Amex has the higher limit of $50,000 in annual purchases and a few additional high-earning spending categories as well (i.e., entertainment and streaming services), whereas on the other hand, the Cobalt Card’s MR Select points can actually be redeemed at higher than 1cpp in value, and so will be much more useful to those of you seeking high-value travel redemptions.
If you have consistent high spending in the 5x categories, though, you’re very likely to benefit from alternating between both cards to enjoy the best of both worlds.