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There was a surprising twist when a personal finance newsletter called The Lean House Effect recently pitted credit card travel points against cashback for the title of best reward program.

Cashback won, but that’s not the twist. What really stands out is how much better cash back was than travel points. Ten travel and cashback reward cards were considered and monthly spending was set at an average $2,500. The benefits of cashback were apparent over a one-year span of time, but they really stand out over 10 years and longer.

Happy with the flights you’re getting with your travel card? The Lean House blog says you might be able to buy those same flights and more with the money you get from a cashback card.

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The top card in the comparison is Roger World Elite MasterCard, which has no annual fee and offers 4 per cent unlimited cashback on purchases in a foreign currency (enough to more than offset the standard 2.5 per cent foreign currency fee on most credit cards), 2 per cent unlimited cash back on Rogers Communications products and 1.75 per cent on all other eligible purchases.

Now, for a complication. Great cashback cards don’t tend to stay that way. It’s standard procedure for a card issuer to introduce a new product with a generous cashback formula, and then make it less favourable after a period of time. The more a card stands out, the more likely it is that it will be reined in.

Don’t ignore the benefits of cashback reward cards on this basis. Just be prepared to switch to something new periodically when your once great card gets knocked down a notch.

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Rob’s personal finance reading list…

Before you apply for a rewards credit card…

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A credit counselling agency suggests you get these questions answered before you apply for a credit card with loyalty rewards. Solid advice here that will prevent you from getting a card that doesn’t suit you.

Reverse mortgages: Myths and realities

This primer on reverse mortgages is framed as way of addressing misconceptions that have led to a negative perception of these borrowing vehicles. I’ll be writing something on reverse mortgages in the next while. Meantime, here’s my latest on this topic.

Three things unhappy couples have in common

You had to know that financial issues would be one of the three.

Housing is a major source of stress

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This is so typical – a poll showing how stressed people are about high housing prices, even as they endorse home ownership as important part of life.

Ask Rob

Q: All in all, would I do better by commuting my pension at the age of 55 and investing that money, or leaving it in?

A: For a detailed response tailored to your personal situation, see a financial planner. Now for my emotions-focused response: Keep the pension. A defined benefit pension means cash for life, which means there’s no risk of outliving your money. You’re also insulated from stock market crashes, recessions and other risk. Yes, you could do better, in theory, if you commuted your pension and invested it yourself. But you could do much worse, too.

Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.

Today’s financial tool

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The B.C. Securities Commission has created an introduction to investing for young adults. I liked the segment on saving versus investing. It’s an important distinction.

Video of the week

Top 10 tips for a better will from the Estate Law Canada blog.

In case you missed these Globe and Mail personal finance-related stories

  • Personal use of work smartphone, laptops by employees may become more of tax headache for Canadian employers
  • Are meal kits worth the money?
  • Bill Gross says to stick to dividend stocks amid low bond yields, but risks still remain (for Globe Unlimited subscribers)

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