Considering that Canada credit cards have different rewards and points systems, interest rates, fees, penalties, introductory periods, balance transfer capabilities, and so on, it is no wonder that so many people cringe when it comes to finding the best personal credit card.  One of the most important things about looking for a personal Canada credit card is the interest rate.  For this, it is not only regular interest charged for purchases, but also interest charged during the introductory period, interest for balance transfers, etc.

For instance, when looking for a personal Canada credit card that has balance transfer options, interest would need to be understood on several levels.  Most credit card companies and banks that issue cards will provide an introductory period during which time no interest or extremely low interest is charged.  The length of this period varies dramatically although on average it lasts 12 months.  During this time, it is common for interest to be at 0%.  However, once the introductory period ends, the Annual Percentage Rate would increase to a prime or subprime rate.

One of the important things to understand for this feature of a personal Canada credit card is whether the 0% or low interest rate is on just the balance transfer feature or regular purchases too.  Unfortunately, many people will secure a balance transfer credit card believing the 0% being advertised during the introductory period is for everything.  However, after transferring the balance over from a high interest rate card to the new card, and then using the new card for purchases, the statement comes only to shock the cardholder.

Yes, this person was provided 0% interest on the money transferred over from the other credit card.  However, the individual had no clue that interest being charged for purchases was at 24%.  Therefore, when the statement came, the person realized that a mess had been created.  For this reason, anyone looking for a personal Canada credit card, especially one that would be used for both balance transfers and purchases needs to know if two different interest rates would be applied, or just one.

It would also be important for a person with less than perfect credit who was looking for a personal Canada credit card to know if the interest rate would ever decrease.  Typically, someone with bad credit would automatically be charged higher interest but as that person’s credit improves and card payments are made on time, the high rate would start to decline.  However, this would not be something to assume.  Instead, the individual should talk to a representative of the issuing company to make sure.

But one thing is certain: we adults have always had the right to apply for, open and use credit cards as we saw fit so long as we were old enough to sign a contract, which we can do when we’re 18. Thanks to some, we now no longer enjoy the privilege to make up our own minds on this matter.

Thanks to the Credit Card Accountability Responsibility Disclosure Act of 2009, or CARD Act, you can no longer open a credit card account until you’re 21 years old, unless you have a job or a co-signer. This is the law of the land since February 22 of this year.

The question is, was this the right move? How old should you have to be before you walk around with your very own credit card, no strings attached? What exactly was accomplished?

I’ve always found these age-based “forced avoidance” rules somewhat humorous and extremely nonsensical, especially when there is no scientific basis for the age cutoff.

It’s a statistical fact that drivers are higher insurance risks when they’re younger than 25, so many rental companies won’t rent to people in that age group — or would rent under more expensive terms. That rule makes sense, because it saves rental car companies money. Stipulated!  But where is the evidence that supports that a 21-year old is a better manager of credit cards than an 18-, 19- or 20-year olds? You can stop looking because it doesn’t exist.

What does exist is a mountain of evidence why this provision of the CARD Act not only doesn’t make any sense but also is, in fact, problematic. Follow me…

“Avoidance” Doesn’t Equate to “Education”

I promise that no credit epiphany occurs at age 21.  I know plenty of credit savvy 21 years old and even more credit disasters pushing 50.  Proper credit management knows no age boundary yet someone felt it necessary to make you wait the three additional years to either be responsible or not.

There is also no new requirement to take a “Credit Cards 101” class in either high school or college, yet it’s hard to argue that it’s not more important than history, music, art, psychology or physical education.

Co-signing = BAD IDEA

This CARD Act actually allows a lender to issue you a credit card as long as your parent co-signs for you, regardless of your age or income.  What this means is both of you would now be equally liable for the debt and equally at risk for credit damage if the card is mismanaged in any way.

For example, if your parent runs up a balance on the card, your credit will suffer – and vice versa. If you think your parent is making the payments on time, and they aren’t, your credit will suffer — and vice versa.  If these things happen you (or your parent) won’t be able to simply change your mind about being on the account because the lender won’t let one of you jump off the liability train.

Lending 101 = Two liable parties is better than one liable party.

Additionally, if your parent has poor credit then you could very well be declined outright or saddled with adverse terms.  So, the penalty for being under 21 could be a 29% interest rate on your revolving balances, thanks to mom or dad.  And, because this is your initial interest rate, you can’t earn a better one by properly managing the account. The lender is under no obligation to adjust it downward, ever.

No, I think it’s safe to say that this was the legislative equivalent of “swing and a miss.”  I get the hypothesis; you restrict credit card usage by young people and you prevent them from getting into debt.  Nobody likes to see people in debt, let alone young people.  But this isn’t going to prevent that from happening.  It just delays it for three years.

Source: http://www.mint.com/blog/trends/student-credit-cards-08022010/

The Case for Cash

Credit is a fairly new concept within the history of finance, which is why so many people would rather stick with tried and true physical currency.

Safety

No one has ever had their identity stolen by leaving their cash behind. Credit cards can be the key to your personal financial information, but money is just money. You don’t have to be concerned about fraud when you spend in cash.

Tangibility

Sometimes it’s easier to spend money when you don’t see it leave your bank account. When you have a wallet full of cash on the other hand, you watch it disappear as you make purchases. Many people prefer to use cash only because it helps them keep mental tabs on how quickly their money is going out.

No Interest or Fees

The great thing about making purchases with cash is you pay the item’s cost and that’s it. There’s no factoring in interest payments. You also don’t have to worry about racking up late fees at the end of the month because there’s no bill–you’re always paid up. Paying cash makes things much simpler and less expensive overall.

Freedom From Debt

With cash, it’s much harder to fall into debt. You can still overspend and end up with no money, but at least you don’t owe creditors anything at the end of the day.

Why Credit Is King

According to The Wall Street Journal, the Federal Reserve reported in June that Americans owe about $826.5 billion in revolving credit. Why do so many people rely on plastic over cash?

Safety

Yes, this was the argument for cash, but the same can be true of credit cards. The problem with physical money is if you lose it, it’s gone. That’s it. No more. Anyone who has ever had a wad of cash fall victim to theft or loss has felt the pain of knowing it’s gone forever. Credit cards, on the other hand, are just pieces of plastic. If you lose yours, you can cancel it and not lose a dime.

Large Expenses Made Affordable

Imagine if every time you needed to make a big purchase you had to wait for weeks or months until you had saved up enough to buy it. This may be doable when you decide to upgrade your television, but what if your car needs a new transmission or if there’s a hole in your roof? You can’t afford to wait. Credit cards allow you to make purchases and then spread the cost out over a longer, more manageable period of time.

Expense Tracking

Another problem with cash is there is no record of where it went unless you hold onto every receipt. Credit cards, however, present you with a neat list of transactions every month in your statement. This makes budgeting a whole lot simpler and also alerts you to any suspicious charges.

The All-Important Credit Score

It’s really hard to get by in today’s society without a credit score. Whether you want to obtain a student loan or turn the utilities on in your new apartment, you’re going to need credit. Of course, the only way to build credit is to use credit.

So which one reigns supreme? The honest answer is that it probably doesn’t matter.

People who prefer an old-school, cash-based system of finance tend to distrust financial institutions or have had bad experiences with debt. Credit users are all about speed and convenience. It all comes down to your personal preference.

Regardless, getting along in today’s world without using some type of credit is very difficult. Even if you prefer cash, you’re going to have to borrow money at some point even if it’s not necessarily on a credit card. Things may change in the future, but for now, credit isn’t going anywhere.

Source: http://www.gobankingrates.com/credit-card-rates/cash-versus-credit/

MBNA Smart Cash Platinum Plus – up to 5% cash back

* 5.00% cash back on qualifying net retail gas and grocery purchases for the first 6 months

* 3.00% cash back on qualifying net retail gas and grocery purchases thereafter

* 1.00% cash back for all other qualifying net retail purchases

* no cash back limit

* Up to $1,000,000 in common carrier travel accident insurance

* Interest rate: 19.99%

Canadian Tire Cash Advantage MasterCard – up to 1.5% cash back

* 0.25% cash back on the first $1,500 purchases

* 0.50% cash back on purchases above $1,500 and up to $3,000

* 1.00% cash back on purchases above $3,000

* 1.50% cash back on purchases above $24,000

* 3.00% cash back at Canadian Tire

* no cash back limit

* Interest rate: 19.99%

* Additional cards: Free

American Express Costco TrueEarnings Card – up to 1% cash back

* 0.25% cash back up to $1,000

* 0.50% cash back on the next $2,000

* 1.00% cash back on any amount over $3,000

* 2.00% cash back on eligible gas purchases

* 2.00% cash back up to $3,000 annually

* 1.00% cash back on any amount over $3,000

* 3.00% cash back on eligible restaurant purchases

* $100,000 Travel Accident Insurance

* Interest rate: 19.75%

* Additional cards: Free

MBNA Premier Rewards Platinum Plus MasterCard – up to 1% cash back

* 1.00% back on all net retail purchases

* no cash back limit

* Interest rate: 19.99%

Capital One Cash Back Gold MasterCard – up to 1% cash back

* 0.50% cash back on the first $3,000

* 1.00% cash back on amount above $3,000

* no cash back limit

* Interest rate: 19.80%

* Additional cards: Free

Scotiabank No-Fee Scotia Moneyback VISA Card – up to 1% Moneyback

* 0.25% cash back on the first $1,500

* 0.50% cash back on the next $1,500

* 1.00% cash back on any amount over $3,000

* no cash back limit

* Save with discounts of up to 20% at participating AVIS car rental locations

* Interest rate: 19.50%

CIBC Dividend Card – up to 1% cash back

* 0.25% cash back for net annual purchases up to $1,500

* 0.50% cash back for net annual purchases from $1,500.01 to $3,000

* 1.00% cash back for net annual purchases over $3,000

* no cash back limit

* $100,000 Common Carrier Accident Insurance

* AVIS car rental discounts up to 20% on at participating locations

* Interest rate: 19.50%

* Additional cards: Free, up to 3 cards maximum

TD Rebate Rewards Visa Card – up to 1% cash back

* 0.50% cash reward on the first $3,000 in net annual purchases

* cash reward on your net annual purchases over $3,000

* maximum annual purchase limit of $25,000

* Interest rate: 19.99%

* Additional cards: Free

Spend around $36k/year on credit card:

* MBNA Smart Cash Platinum Plus: $540 (assuming max out gas/groceries of $500/month)

* Canadian Tire Cash Advantage MasterCard: $416.25 (assuming $1000/year purchases at Canadian Tire)

* American Express Costco TrueEarnings Card: $378.5 (assuming $2400/year on gas purchases and $600 on restaurant purchases)

* MBNA Premier Rewards Platinum Plus MasterCard: $360

* Capital One Cash Back Gold MasterCard: $345

* Scotiabank No-Fee Scotia Moneyback VISA Card: $341.25

* CIBC Dividend Card: $341.25

* TD Rebate Rewards Visa Card: $235

Spend around $24K/year on credit card:

* MBNA Smart Cash Platinum Plus: $394 (assuming max out gas/groceries of $400/month)

* American Express Costco TrueEarnings Card: $258.5 (assuming $2400/year on gas purchases and $600 on restaurant purchases)

* Canadian Tire Cash Advantage MasterCard: $241.25 (assuming $1000/year purchases at Canadian Tire)

* MBNA Premier Rewards Platinum Plus MasterCard: $240

* Capital One Cash Back Gold MasterCard: $225

* TD Rebate Rewards Visa Card: $225

* Scotiabank No-Fee Scotia Moneyback VISA Card: $221.25

* CIBC Dividend Card: $221.25

Conclusions

MBNA Smart Cash Platinum Plus Mastercard wins as we spend a lot of gas and groceries every month.

If we don’t have a car, MBNA Premier Rewards Platinum Plus MasterCard is a good choice, because it always give us 1% cash back.

RBC Visa Platinum Credit Card Benefits

• Credit limit of up to $50,000
• No annual fee
• Guaranteed hotel reservations
• Emergency travel assistance 24 hours a day, 7 days a week
• Minimum credit limit of $1,000
• $1,000 ATM cash advance limit (up to available credit)
• Commission Free Travellers Cheques

RBC Visa Classic Low Rate Credit Card Benefits

• Permanent low interest rate helps you save money when you carry a balance on your card.
• Free Additional Card
• Guaranteed hotel reservations
• 24-hour worldwide fraud detection keeps your card safe
• Accepted at more than 600,000 locations in Canada and over 22 million worldwide
• Worldwide cash access up to $500 daily (up to your available credit limit)

RBC WestJet World MasterCard Benefits

• Earn WestJet Dollars toward WestJet flights and WestJet Vacations.
• Earn 1.5% of credit card spend in WestJet Dollars
• Comprehensive Insurance coverage
• Enjoy guaranteed hotel reservations, commission–free travellers cheques and 24/7 Assured Assistance customer service

RBC WestJet RBC MasterCard Benefits

• Earn WestJet Dollars toward WestJet flights and WestJet Vacations.
• Earn 1% of credit card spend in WestJet Dollars
• Earn additional 0.5% of net purchase on WestJet flights and vacations.
• Save up your WestJet dollars or use them as you go—you can even use them to take advantage of WestJet seat sales
• Receive valuable insurance coverage, including Auto Rental Collision/Loss Damage Insurance, Travel Accident Insurance and more
• Receive travel benefits such as guaranteed hotel reservations, commission–free travellers cheques and 24/7 Assured Assistance customer service

RBC Esso Visa Classic Credit Card Benefits

• Earn points towards free gas at Esso stations
• No annual fee credit card
• Redeem points for car washes, gas and more

RBC US Dollar Visa Gold Credit Card Benefits

• Earn 1 RBC Rewards point for every $1 U.S. spent
• Earn additional RBC Rewards points with the Rewards Network Restaurant Program
• Exchange RBC Rewards points for Esso Extra points
• Minimum credit limit of $1,000
• Accepted at more than 23 million locations worldwide wherever you see the Visa logo
• Guaranteed hotel reservations
• Emergency travel assistance 24 hours a day, 7 days a week
• $1,000 ATM cash advance limit (up to available credit)
• Commission Free Travellers Cheques

RBC Cathay Pacific Visa Platinum Credit Card Benefits

• Earn Asia miles towards flights and more
• Earn Asia Miles for dollars spent on the card
• 5,000 Bonus Asia Miles upon enrolment
• Commission Free Travellers Cheques
• Enjoy the convenience and protection you need in a Credit Card with purchase-related insurances
• Zero Cardholder Liability eliminates your liability for fraudulent card transactions, provided you take reasonable precautions to protect your PIN and your card, as set out in your RBC Royal Bank Credit Card Agreement.
• Accepted at more than 600,000 locations in Canada and over 20 million locations worldwide
• Guaranteed hotel reservations

RBC British Airways Visa Platinum Benefits

• 10,000 bonus BA Miles upon enrolment
• 31-day Out of Province/Country Emergency Medical Insurance
• One BA Mile for every dollar you spend on the card
• Double BA Miles for every dollar you spend on British Airways flights purchased with the card

RBC Visa Gold Preferred Credit Card Benefits

• Comprehensive insurance coverage
• Earn 1 RBC Rewards point for every $1 spent
• Redeem points for travel, merchandise & more
• 2,500 bonus points upon enrolment
• Exchange RBC Rewards points for Esso Extra points
• Earn RBC Rewards points faster with travel bookings through Carlson Wagonlit Travel
• Earn additional RBC Rewards points with the Rewards Network Restaurant Program
• Emergency travel assistance 24 hours a day, 7 days a week
• Accepted at over 23 million locations worldwide wherever you see the Visa logo
• Guaranteed hotel reservations
• $1,000 ATM cash advance limit (up to available credit)
• Commission Free Travellers Cheques

Make your first purchase and earn 10,000 AAdvantage^®miles!

TD AAdvantage Platinum Visa Card Benefits

• One mile for every dollar – you’ll earn one AAdvantage mile for every dollar charged to your Card
• Double miles – earn double miles when you use the Card to purchase an American Airlines flight, Admirals Club Membership, or items onboard American Airlines flights
  
• Bonus miles – upon annual renewal, you will receive 2,500 bonus miles every year
• Free Travel Insurance
• Purchase Security and Extended Warranty Protection – enjoy worry-free shopping

TD Business Travel Visa Card Benefits

• You’ll receive 30,000 Bonus TD Points upon approval
• You’ll earn 3 TD Points for every dollar in purchases charged to your Card
• You’ll earn 9 TD Points for every dollar charged to your Card for eligible travel purchases booked through the TD Visa Travel Rewards Centre
• You’ll enjoy the freedom to book your trip through any travel agency or website on your Card and still use your TD Points

RBC Visa Platinum Avion Benefits

• Redeem points for flights on any airline
• No blackout periods or seat restrictions
• Earn 1 RBC Rewards point for every $1 spent
• 15,000 welcome points upon enrolment
• earn additional RBC Rewards points with the RBC Rewards Dining Program and Thrifty Car Rental.
• Exchange RBC Rewards points for Esso Extra points
• Option to transfer RBC Rewards points to Asia Miles, BA Miles or AMERICAN AIRLINES AADVANTAGE miles

TD Business Visa Card Benefits

• Valuable insurance protection
• Emergency Assistance Services
• Business Banking Services
• The convenience of managing your TD Business Visa Account online through EasyWeb Internet banking

RBC Visa Classic II Credit Card Benefits

• Earn 1 RBC Rewards point for every $1 spent
• Exchange RBC Rewards points for Esso Extra points
• Free Additional Card
• Earn RBC Rewards points faster with travel bookings through Carlson Wagonlit Travel
• Earn additional RBC Rewards points with the Rewards Network Restaurant Program
• Guaranteed hotel reservations
• 24-hour worldwide fraud detection keeps your card safe
• Worldwide cash access up to $500 daily (up to your available credit limit)

TD Venture Line of Credit Visa Card Benefits

• Instant access to your available business credit with the flexibility of a credit card
• A variable annual interest rate based on TD Prime
• Automatic yearly renewal with no business plan or annual reviews required
• Minimum credit limit of $1,000

TD U.S. Dollar Visa Card Benefits

• Auto Rental Collision/Loss Damage Insurance — save money when you rent a car
• Emergency Travel Assistance Services — help in a personal emergency when you are travelling
• Delayed and Lost Baggage Insurance — up to $1,000 coverage
• Purchase Security and Extended Warranty Protection –protects most items when purchased with your TD Visa
• Common Carrier Travel Accident Insurance — up to $500,000 coverage for you, your spouse and dependent children