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marty123
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Post by marty123 »

The Citi Driver's Edge used to pay out for used vehicles too BTW. I suspect they still do. I still have $1600 in GM credit on my TD GM Card from 6 years ago. They are none transferable and will start expiring next year. Big mistake!
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Post by adrian2 »

Bylo Selhi wrote:at least every 5 years
A "trick" one of my friends uses is to first lease a car, use Citi's points, then when the lease expires use the card's points again on the same vehicle. As the ownership changes both times (first it's the leasing company, then it's the individual) he had no problems taking advantage twice on the same car.
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Post by FinEcon »

adrian2 wrote:
FinEcon wrote:Counterpoint: IMO price protection is a near worthless benefit, just to easy to do yourself. No decent retailer will not give you the last sale price and if you can get the last sale price that means you can get the future sale price too.
I've just used its price protection feature for an HDTV from Canadian Tire: I've bought it on sale, a couple of weeks later the same store had it for a liquidation price of $50 less. I've tried to get the lower price from the store's customer service, but they've declined as their policy is to refund the difference for 7 days only after the sale. I could have gone through the hassle of returning it for the original price and get a new one for the sale price, but I've decided to try out price protection: it worked out with no problems.

One other situation where it would not be a "worthless benefit" is if you find the item at a better price at a different store. Good luck trying to convince the original store to retroactively match their competitor.
Adrian, your story definitely illustrates the hassle savings that purchase protection can provide in such a situation. Personally, I would never buy an item from any store with a 7 day return policy.

Retroactive price match? No problem at any decent retailer. Most retailers have a reasonable return period as well as a price matching guarantee. Put them together and voila you have price protection. In all fairness, I failed to mention that one must be knowledgeable, diligent and not shy of verbal judo to do what I am suggesting. You are definitely right to claim purchase protection is a much easier way to achieve the same result. BTW, the trick you described above is a work of pure genius!

Hotgo, if you're maxing out reward points there are cards with no cap on the cashback.

Bylo, I forgot about the TD thread here but the reason I suggested RFD is because they have credit card comparisons and thread which explain a wide assortment of cards and their specific features. As well there is currently an incredible mbna cashback card on their forum that is not advertised. AMEX had one a while back too.
Show me the incentive and I will show you the outcome

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adrian2
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Post by adrian2 »

FinEcon wrote:Adrian, your story definitely illustrates the hassle savings that purchase protection can provide in such a situation. Personally, I would never buy an item from any store with a 7 day return policy.
Just to clarify, the store had a 7 day price match policy.
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Post by hotgo »

FinEcon wrote:Hotgo, if you're maxing out reward points there are cards with no cap on the cashback.
I maxed out the Price Guarantee feature ($500) and not the reward $$$.
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Post by EmperorCoder »

I recently switched to a new MBNA SmartCash Mastercard.

I get 3% cash back on grocery and gas purchases up to 600$ a month, 1% cash back on everything else.

For the first 6 months, these incentives are bumped to 5% and 3% respectively. Not bad at all.


http://www.redflagdeals.com/forums/show ... p?t=722828
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Post by iluvnascar »

"I'd rather have 1% cash in hand to do with whatever I want than 2% that may expire before my next car purchase. YMMV."


To each his own....but for me, 2% at new-car time beats 1% anytime. I may buy more cars than the average person and so maybe I'm biased. But the fact that you can direct the 2% to anyone on the card suggests to me that there is always a way to use the 2%.

P.S....What is "YMMV"?
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Post by adrian2 »

iluvnascar wrote:To each his own....but for me, 2% at new-car time beats 1% anytime.
It's actually 2% for any car, new or used.
iluvnascar wrote:P.S....What is "YMMV"?
Your mileage may vary.
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Post by iluvnascar »

"It's actually 2% for any car, new or used. "

I'm aware of that adrian. My comment was directed at Bylo who apparently likes those 1% cashback cards and whose post stated: "I'd rather have 1% cash in hand to do with whatever I want than 2% that may expire before my next car purchase. YMMV."

The 1% cashback cards certainly have a purpose. My son - who has a TERRIBLE credit rating and, in fact, can't get credit - had to opt for a secured credit card. Luckily, TD has a secured credit card option that actually gives him 1% cashback and with no annual fee. It's great for him.
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Post by Bylo Selhi »

iluvnascar wrote:To each his own....but for me...
That's how I feel about 2% car rebate cards. I'd rather have 1% now that I can use to purchase anything -- including investments that have a positive return -- rather than accumulate 2% over a number of years (without any return BTW) that I might be able to use on a car if the credits haven't expired by then.

The same thinking applies to Aeroplan and AirMiles. If I can get the flight I want then usually the value is 2% or 3%, however, it's worthless if there are no seats available when I want to travel or worth less if I have to upgrade to a higher fare class and/or have to pay outrageous surcharges and/or use the points to buy non-flight rewards.
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Post by zinfit »

Bylo what is the name of your card?
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Post by travesty »

EmperorCoder wrote:I recently switched to a new MBNA SmartCash Mastercard.

I get 3% cash back on grocery and gas purchases up to 600$ a month, 1% cash back on everything else.

For the first 6 months, these incentives are bumped to 5% and 3% respectively. Not bad at all.


http://www.redflagdeals.com/forums/show ... p?t=722828
Only the gas/groceries are bumped up to 5% for the first six months - other purchases remain at 1% during this period (not 3%).
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Post by Bylo Selhi »

zinfit wrote:Bylo what is the name of your card?
See here upthread.

BTW Scotia's Momentum VISA card is only $40, offers 2% on gas, groceries, recurring payments and drug store purchases and 1% on everything else, etc. I suspect anyone who has a good relationship with Scotia could probably wrangle that card for free.
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Post by flywaysuzy »

The bns card's price is escalating faster than you can imagine-it used to be free, then it was $8, now its close to $40/yr. The simmering frog approach I believe it is called..I guess it's for the privilage of having a chip in it that may or may not work in all machines...I'm going to have to phone in and complain. Don't they have to notify card holders ahead of a 400% price jump? I bet landlords wish they could issue credit cards instead of being hamstrung by whatever rent increases they are limited to.
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Bylo Selhi
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Post by Bylo Selhi »

flywaysuzy wrote:it used to be free, then it was $8, now its close to $40/yr.
I didn't know that. That sucks.
I guess it's for the privilege of having a chip in it that may or may not work in all machines.
All CCs are going to have chips in the next couple of years. That includes the free ones, so that can't be the justification for the fee increase. And if some machines burp on chip cards then all CC companies are going to have a PR mess on their hands. (FWIW chip cards have been piloted in K-W for the past couple of years. I haven't heard of any problems. I've also used my chip card outside of K-W several times without any problem.)
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Post by Shakespeare »

some machines burp on chip cards
Sounds fishy to me. 8)
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Post by flywaysuzy »

It does suck, having to pay any fee for what used to be free, but it wasn't a cash back card then either-so you have to do the math. I think it is a better card than the point ones, as there isn't any work involved to get your bonus money-it just flies into your bank account . The airmiles ones require paperwork or phone calls etc. to use your points. Although, to its credit, the airmiles amex card I do have is free and hasn't (yet) started charging for the privilage of using it. Maybe when I retire I will have time to figure out how to use the points...
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Bylo Selhi
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Post by Bylo Selhi »

<OT TYPE="FISHY TALE">
Shakespeare wrote:
some machines burp on chip cards
Sounds fishy to me. 8)
Hawaii fish burps up gold watch. (Must have been a Timex.)
</OT>
Last edited by Bylo Selhi on 06 Jun 2009 18:02, edited 1 time in total.
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Post by Peculiar_Investor »

travesty wrote:
EmperorCoder wrote:I recently switched to a new MBNA SmartCash Mastercard.

I get 3% cash back on grocery and gas purchases up to 600$ a month, 1% cash back on everything else.

For the first 6 months, these incentives are bumped to 5% and 3% respectively. Not bad at all.


http://www.redflagdeals.com/forums/show ... p?t=722828
Only the gas/groceries are bumped up to 5% for the first six months - other purchases remain at 1% during this period (not 3%).
Does this mean that merchants of gas/groceries establishments have, or will soon, increase their prices by x% as a result of the fees the credit card companies are changing them to offer the "enhancement" back to the consumer? There is no free money -- someone's paying extra so that the customer can get these "cash-back" features.
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Post by pmj »

Does this mean that merchants of gas/groceries establishments have, or will soon, increase their prices by x% as a result of the fees the credit card companies are changing them to offer the "enhancement" back to the consumer? There is no free money -- someone's paying extra so that the customer can get these "cash-back" features.
I'm also finding this issue to be somewhat challenging. On the one hand, many of us here focus on low-MER investments to minimize frictional costs, and (hopefully) maximize our investment returns. On the other hand, by using credit cards (as compared to, say, cash, Interac, or cheques) we are imposing significant frictional costs on those we do business with. In these days of razor-thin profit margins, those 1% / 2% fees must be taking quite a bite into the profit?
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Post by marty123 »

flywaysuzy wrote:it used to be free, then it was $8, now its close to $40/yr.
I thought of getting this card and use it only for the 3% rebates (pre-authorized + gas mostly). The $40/yr stopped me because it made it significantly less attractive unless I made it my main card. I guess it's meant to deter people from getting the card, moving all pre-authorized payments to it, and putting it in a drawer.
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Post by marty123 »

pmj wrote:
Does this mean that merchants of gas/groceries establishments have, or will soon, increase their prices by x% as a result of the fees the credit card companies are changing them to offer the "enhancement" back to the consumer? There is no free money -- someone's paying extra so that the customer can get these "cash-back" features.
I'm also finding this issue to be somewhat challenging. On the one hand, many of us here focus on low-MER investments to minimize frictional costs, and (hopefully) maximize our investment returns. On the other hand, by using credit cards (as compared to, say, cash, Interac, or cheques) we are imposing significant frictional costs on those we do business with. In these days of razor-thin profit margins, those 1% / 2% fees must be taking quite a bite into the profit?
Most merchants build the credit card merchant fee into their pricing now. It's a use-it-or-lose-it situation. The small percentage of people that don't use a reward card are subsidizing those that do.

I can't see a different (higher) merchant cost being charged with these specialty reward cards (i.e. Scotia's and MBNA's Smartcard). The card issuer simply structures the reward program to make less money on gas & groceries, and make it up on the rest (i.e. instead of paying 1.25% on all purchases, they break it down 3% gas/groceires + 1%). That also explains why the impose monthly limits on the 3% rewards. If they recoup it all from these types of merchants, they wouldn't need to do that. Just the same, I doubt that the issuer of a credit card that has CDW charges more to rental agencies ... they just average it out over the other purchases.

A merchant once explained to me that different types of cards (Infinite, "premium", plain gold, plain regular, ...) attract different merchant fees, but I didn't get the impression it could be related to the type of establishment they have. He said my MBNA SPG Platinum was a "premium" card, and that it cost him about 3.5%(*) in merchant fee for it (yes, he whined about it, and no, I didn't offer up another card).

EDIT (*): I'm not sure I believe him about the 3.5% (what would the Infinite be?), but I believe him about the different card tiers because he seemed to be hinting he preferred I paid with a non-premium card :roll:

EDIT2: A way to maximize the 6-month promo of the MBNA Smartcard (5% on gas & groceries) could be to buy gift cards from your gas station or grocery store if you don't believe your monthly purchases will add up to $600. For the Scotia Momentum card, Shoppers Drugmart pays 2% and sells gift cards from various stores (Futureshop, Staples, boutiques, etc.).
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Post by Peculiar_Investor »

pmj wrote:
Does this mean that merchants of gas/groceries establishments have, or will soon, increase their prices by x% as a result of the fees the credit card companies are changing them to offer the "enhancement" back to the consumer? There is no free money -- someone's paying extra so that the customer can get these "cash-back" features.
I'm also finding this issue to be somewhat challenging. On the one hand, many of us here focus on low-MER investments to minimize frictional costs, and (hopefully) maximize our investment returns. On the other hand, by using credit cards (as compared to, say, cash, Interac, or cheques) we are imposing significant frictional costs on those we do business with. In these days of razor-thin profit margins, those 1% / 2% fees must be taking quite a bite into the profit?
Did some Google work on the issue and came up with these stories.

From CBC, Card costs: who pays what to whom

From The StopStickingItToUs Coalition is a group of Canadian associations, led by Retail Council of Canada and backed by over 200,000 businesses from coast-to-coast, that is standing up to the Big Credit Card Companies to put a stop to skyrocketing fees, Stop Sticking It to Us! WHAT ARE THESE FEES?

From Ellen Roseman, The Toronto Star, Credit card firms cash in on fees

The bottom line appears that we all pay into the rewards system, sort of like a ponzi scheme where we hope many others under utilize their benefits so that we get extra.
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Post by pmj »

Thanks for the links. From the Stop Sticking It To Ussite:
Myth: Canada’s interchange rates are in-line with those in the rest of the world.
Reality: In fact, Canada has some of the highest interchange rates compared to other countries around the world.

Australia - 0.45%
UK - 0.79%
Sweden - 0.90%
Belgium - 1.35%
US - 1.75%
Canada - 2%
Sounds like Mutual Funds MER's all over again :shock:.
Most merchants build the credit card merchant fee into their pricing now. It's a use-it-or-lose-it situation. The small percentage of people that don't use a reward card are subsidizing those that do.
Any data that shows most people use reward cards - or more to the point - that most transactions are paid via reward cards? Would this include all types of payments - or just all credit card payments?

Maybe I'm in a minority of one - but I make most of my bill payments online from my chequing account, and I make most payments when shopping via Interac. I'll confess that this is not 'cos I'm trying to help out the merchants - it's much easier to budget if the outward cash flow is as smooth as possible. Monthly credit card payments are (potentially) very lumpy. I've recently started using a PC Financial MCard - the rewards are way higher than 1% by using the coupons that keep arriving in the mail - and cashflow budgetting is noticeably more work.
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Post by marty123 »

pmj wrote:Thanks for the links. From the Stop Sticking It To Ussite:
Myth: Canada’s interchange rates are in-line with those in the rest of the world.
Reality: In fact, Canada has some of the highest interchange rates compared to other countries around the world.

Australia - 0.45%
UK - 0.79%
Sweden - 0.90%
Belgium - 1.35%
US - 1.75%
Canada - 2%
Sounds like Mutual Funds MER's all over again :shock:.
It seems like cash reward cards are not as common in Australia, but they do exist. The most generous card appears to be ANZ Reward, which gives 1 pt per $1.50 spent. Getting a $30 cash reward costs 3100 points. That means a cash reward rate of 0.65%, which exceeds the rate that Visa is said to collect. So either the numbers are misleading, the story in incomplete, or money gets created out of thin air (keep in mind that the linked site is a lobbyist organization).

Still, you've got to admit that 2% to outsource a payment processing system is not bad, especially when all your competitors face the same cost.
Any data that shows most people use reward cards - or more to the point - that most transactions are paid via reward cards? Would this include all types of payments - or just all credit card payments?
This Torstar article says that more than 1/3 of shoppers at Giant Tiger (a thrifty store) pay by premium credit cards. A few things to keep in mind:

- GT is a discount store, less likely to attract affluent buyers
- A lot of GT are located in small communities where cash is still more often used
- A lot of GT customers may not qualify for these cards (income > $35K, etc.)
- A lot of GT are located in poorer areas of cities

So if "everyone is doing it", the sale price reflects the credit card transaction cost. It means that rewards is not "free money" and it also reinforces that cash buyers are leaving money on the table.
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