Life on Credit

The art of borrowing money

How Would Filing for Bankruptcy Affect Your Borrowing Power?

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Filing for bankruptcy can negatively affect your borrowing power because your credit score is likely to plummet. This depends on your credit profile, however. If you have fair or bad credit and multiple negative items listed, then you would expect a low to moderate drop. Borrowers with spotless or very good credit, however, see a significant drop.

What to Expect

It is a good idea to learn more about bankruptcy as to know what to expect. This is a last resort for borrowers who have exhausted all other options such as counseling, negotiation with creditors, debt consolidation. Consolidation loans, for example, are offered to borrowers to combine multiple debts and benefit from a single payment. It is a form of refinancing for borrowers with a lot of outstanding debt. Bankruptcy is a solution for people who owe more money than the total value of their assets. In fact, if you owe $1,000 or more and are unable to keep up with payments, you meet the criteria.

Bankruptcy is a solution for borrowers who have unsecured debts, including personal loans, vacation loans, credit cards, lines of credit, etc. Those having a lot of equity may not be allowed to keep their home. When it comes to personal belongings, there are certain exemptions to look into. The list includes things like retirement savings and pensions, heating fuel and food, and farm supplies, equipment, animals, and land. When filing for bankruptcy Canada based borrowers are also allowed to keep their vehicle, furniture, clothing, and health aids. Exemptions vary from province to province. In Alberta, for example, you are allowed to keep your social allowance, farm land, principal home, farm property, tools of trade, household appliances, and food. In Manitoba, you are also allowed to keep some life insurance policies, locked-in pension plans, religious items, etc. In any case, bank accounts are not exempt.

The Bankruptcy and Insolvency Act governs receiverships, commercial and consumer proposals, and bankruptcies. A bankruptcy trustee is appointed to represent the borrower’s estate. Once you have filed, you can expect to receive a discharge in about 9 months unless a court orders an extension.

Your Borrowing Power

After you have filed for bankruptcy, your borrowing power will be seriously affected because you are considered a high-risk customer. There are some things to do to improve your chances of getting approved for a loan or a credit card.

Get Your Discharge

The first step is to get your discharge in a timely manner. Once you do this, it is time to start rebuilding your credit.

Apply for a Secured Card

There are several options to look into, among which secured loans and secured credit cards. A secured credit card is easier to get even if you have a tarnished credit score. The reason is that your savings account serves as collateral, i.e. guarantee of repayment. This makes it less risky for financial institutions. Secured cards are offered to borrowers with a history of poor credit and limited credit exposure. The limit depends on the amount deposited and your score.

A Store Card

Another option is to apply for and open a department store card but interest rates tend to be significantly higher compared to other products. This can be a good solution if your department store offers generous discounts but there is more. A store card can help you to improve you score if you make occasional purchases (as opposed to many purchases). This will help you to lower your utilization rate. A low utilization rate proves to financial institutions that you are a low-risk borrower. Aim at a utilization rate of about 15 percent to help rebuild your credit score. This is provided that you make timely payments and use the line in a responsible manner. In fact, responsible use is the key to rebuilding credit. Late and missed payments show on your report and negatively affect your score. You don’t want this if you declared bankruptcy recently.

An Installment Loan

There are other things to do to boost your borrowing power, and one is to get an installment loan. If you made regular payments on your department store or secured card over the past couple of months, you may want to visit your local bank. Ask what they have on offer. If you get approved for a small installment loan, make regular payments. When it comes to the loan amount, it is always better to be on the safe side and start small. Borrowers with poor credit are usually offered very high interest rates, which adds to the cost of the loan. It is always good to have a credit mix, i.e. personal loans, credit cards, etc. A good mix means diversity and shows financial institutions that you can handle different types of credit. Be careful when applying. Multiple applications can have a negative effect on your score.

Develop Healthy Financial Habits to Deal with Debt

Finally, the most important thing is to develop healthy money and credit management habits to avoid debt and bankruptcy. If you are unsure where to start, you may want to contact a bankruptcy advisor or financial advisor to learn the basics. Your financial advisor will help you learn how to budget, save, and set long- and short-term financial goals. They will help you build a financial cushion (an emergency fund) for a rainy day and emergency situations. A financial advisor will also help you develop a personalized plan based on your individual circumstances. A personalized, step-by-step plan can help you a great deal in terms of rebuilding credit, when to start, what financial products to apply for, and more. When choosing an advisor, make sure you ask whether they offer free information, what services they offer, how much they charge, etc. Ask whether they have monthly or set-up fees.

Once you succeed in rebuilding credit, you will have plenty of choice when it comes to credit cards and loans with attractive terms, low than average rates, and incentives and perks.

Student Loans in Canada – The Ultimate Guide

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There are plenty of ways to pay for college in Canada, and many young people opt for student loans to pay tuition fees, room and board, textbooks, books and other expenses.

Student Loan in Canada Overview

Who Offers Student Loans

Financing is available from different sources, including the federal and provincial governments as well as private providers such as banks, finance companies, and credit unions. The Government of Canada offers federal loans to students enrolled in designated universities and colleges. The provincial governments also offer funding in the form of grants, bursaries, and loans. The rules and requirements vary by province and territory. Quebec, the Northwest Territories, and Nunavut, for example, have their own funding programs, and federal loans are not available. Depending on the student’s territory or province of residence, when applying for funding, students may be asked to provide information such as their bank account number in Canada, their last year’s income tax return, birth date, social insurance number, spouse or parents’ social insurance numbers, etc. Undergraduates who fail to qualify for federal or provincial assistance often apply for a loan with their local bank or credit union or a major bank such as BMO or RBC. Many financial institutions feature education or student lines of credit with reasonable interest rates to help pay major expenses such as residency and tuition fees. Personal loans are also available to meet college-related expenses and come with either variable or fixed rate. Some banks also offer scholarships based on merit and scholarships for females, indigenous and aboriginal people, children of their employees, and people in special circumstances in general.

Laws and Regulations

A number of regulations and laws govern loan provision, including the Canada Student Financial Assistance Act, Canada Student Loans Act, and others. The Canada Student Loans Regulations, for example, include provisions on applicable interest rates, payment of interest rate and the principal, agreements and alterations, consolidation, reinstatement and continuation, and a lot more.

Federal Government Student Loan Programs

Canada Student Loan Program (CSLP)

Funding under the Canada Student Loan Program is available in most Canadian territories and provinces, including Quebec, Ontario, British Columbia, Nova Scotia, and others. There are certain eligibility criteria to meet, one being financial need. Students qualify for financial assistance provided that they are enrolled part-time or full-time in a certificate, diploma, or degree program. Permanent residents and citizens qualify for funding, and protected and designated persons are also eligible to apply. People aged 22 and over are required to pass a credit check.
The repayment period begins once people leave school, transfer from full-time to part-time studies, graduate from school, or leave school for a period of more than 6 months. There are different types of repayment assistance plans for undergraduates who find it difficult to keep up with payments, including Canada Student Loan Rehabilitation, revision of terms, the Repayment Assistance Plan, and others.

Canada Student Grants Program (CSGP)

Government grants are available to students from middle- and low-income families who are enrolled in a post-secondary program. Only people in designated institutions qualify for grants. Designated colleges and universities include the Red Deer College, Mount Royal University, College of New Caledonia, Atlantic Business College, Maritime Business College, and more.
There are plenty of options to look into, among which grants for part-time and full-time students, for persons with disabilities, people with dependents, aboriginal people, registered apprentices, and others. Full-time scholars are eligible to apply provided that they are enrolled in a certificate, diploma, or degree program. Funding is based on financial need, i.e. factors such as household annual income and family size. In addition, there are different programs to look into, examples being the Athlete Assistance Program and Post-Secondary Student Support Program.

Provincial and Territorial Student Loans

Alberta: The Alberta Learning Information Service

Scholars are eligible to apply for grants and student loans based on financial need. Funding is available to help meet expenses such as supplies and books, mandatory fees, and tuition fees. The monthly allowance is different for people with dependent children and those with no children. Students with dependents can also apply for dental, optical, and medical coverage.

British Columbia: StudentAidBC

People in British Columbia have different options to meet college expenses, including scholarships, grants, and loans. Other types of financial assistance include the Youth Educational Assistance Fund, work study programs, bursaries, awards.

Manitoba: Manitoba Student Aid

Students in Manitoba are offered financial aid in the form of bursaries, grants, and loans. Protected persons, landed immigrants, and Canadian citizens qualify for assistance. Undergraduate loans are interest-free during the repayment period and while enrolled in a diploma or degree program.

New Brunswick: New Brunswick’s Student Financial Service

Scholars in New Brunswick have access to a number of programs and services, among which personal learning and academic upgrading programs, digital literacy training, GED preparation courses, employment counseling and assistance services, financial assistance, and others. When applying for financial assistance, people are asked to provide details such as citizenship, province of residence, visible minority status, and category, i.e. married, single parent, or dependent.

Newfoundland and Labrador: Newfoundland and Labrador Student Aid

Aid is offered in the form of grants and loans and is available to part-time and full-time students as well as to persons with permanent disabilities. Applicants who are landed immigrants or Canadian citizens and demonstrate financial need qualify for assistance. To maintain eligibility, students are required to have an 80-percent course load for provincial funding and a 60-percent load for federal funding. Different types of assistance are available, including NL and Canada loans, the Canada Student Grant for Adult Learners.

Northwest Territories: NWT Student Financial Assistance

In the Northwest Territories, funding is available under the Student Financial Assistance Program. There are different types of funding for part-time and full-time students, including course reimbursement, the NWT Grant for Students with Permanent Disabilities, repayable loans, remissible loans, and basic grants. Repayable loans are offered to help students meet expenses such as travel, books, tuition fees, etc. Remissible loans, on the other hand, are in the form of a monthly living allowance.

Nova Scotia: Nova Scotia Assistance

There are different types of funding available, including grants and Canada Student and Nova Scotia loans. Financial assistance is available to both full- and part-time students. When applying, they are asked to provide information such as their income and spouse’s income, course description, start and end date.

Ontario: Ontario Student Assistance Program

In Ontario, funding is available to students who are enrolled in private career colleges, diploma and college programs, and universities. The type and amount of funding depends on factors such as parental income, number of children, and the year in which the student graduated from high school. Financial assistance is also available to people in special circumstances such as those on social assistance, deaf students and those with hearing problems, former and current crown wards, and other categories. Sources of funding include the indigenous people bursary, living and learning grant, and others.

Prince Edward Island: PEI Student Financial Services

People enrolled in the College de l’Ile, Maritime Christian College, Holland College, and UPEI are eligible to get a bursary in the amount of $4,400 to $8,800. There is no need to apply. They can also apply for the Government of PEI Marine Atlantic Bursary and Community Service Bursary. Loans are also offered to students from middle- and low-income families. In addition, there are different types of funding available, including the Island Student Award, Island Skills Award, George Coles Graduate Scholarship, Career Connect, and others. Debt reduction is available to scholars who are unable to keep up with repayment.

Quebec: Aide financiere aux etudes

Part-time students are offered loans while full-time students are eligible to apply for grants and loans. People with special needs are also offered material resources, special needs housing, paratransit, and specialized services. Scholars with disabilities are eligible, including those with organic and motor impairment, speech and language impairment, and severe hearing and visual impairment.
People who are unable to repay their loan are offered a deferred payment plan whereby the government of Quebec pays monthly interest on behalf of the debtor over a certain period of time /up to 6 months/.

Saskatchewan: Saskatchewan Student Financial Assistance Program

The Government of Saskatchewan offers grants and loans to scholars who are enrolled in post-secondary programs. When applying for a loan, people are asked to provide personal information such as social insurance number, dependents, ancestry, program information, name of institution, and so on. Students enrolled in designated universities are eligible to apply, including St. Peter’s College, Luther College, First Nations University of Canada, University of Regina.
Student Loan Forgiveness for Nurses and Nurse Practitioners is a program that targets healthcare practitioners and encourages them to move to small remote and rural communities. To be eligible under the program, applicants must have a license to practice in the province as a nurse practitioner, licensed practical nurse, registered psychiatric nurse, or registered nurse. To apply, healthcare practitioners are asked to provide employment information such as name of facility, profession, work address, valid registration number, loan forgiveness period, and attestor or supervisor information.

Yukon Territory: Yukon Student Financial Assistance

Students in Yukon have plenty of options to explore when it comes to financial assistance, including scholarships, training allowance, Yukon Excellence Awards, Canada student grants and loans, and the Yukon Grant. The latter is offered to people enrolled in post-secondary studies, including PhD and Master’s Programs. Only scholars enrolled in designated institutions qualify, such institutions being the Yukon College and Alkan Air Flight Training.

Private Student Loans

Loan Types

Financial institutions in Canada offer student lines of credit, personal loans, and specialty and standard student credit cards. Big banks such as the Royal Bank of Canada and the Canadian Imperial Bank of Commerce offer lines of credit with competitive interest rates, extended grace periods, and flexible limits. Credit lines are offered to undergrads who are pursuing a degree in Veterinary Studies, Dentistry, Medicine, Law, Engineering, Accounting, and others. Applicants are asked to provide proof of citizenship or residency status, list of financial resources, cost estimate, and confirmation of enrollment. Examples of financial resources to include are part-time employment, government financial assistance, bursaries and scholarships, RESPs, and others. Scholars are also asked to provide a cost estimate, including travel expenses, room and board, fees, supplies and textbooks, and tuition fees. Credit unions, banks, and other establishments also offer personal loans with flexible repayment periods. Some banks offer loans with no prepayment penalty. Many finance companies and banks feature student credit cards with attractive interest rates, welcome bonuses, awards points, cash back on purchases, and other beneficial features. There are credit cards that go with sign-up bonuses, no annual fees, comprehensive travel and medical insurance, and generous discounts.

Who Offers Private Student Loans

Big banks such as TD Bank, Scotiabank, BMO, CIBC, and RBC offer private loans and other borrowing solutions. TD Bank, for example, offers home equity and personal loans to help students pay major college expenses.

Education Savings – Canada Education Savings Grant and Registered Education Savings Plans

The Canada Education Savings Grant is money contributed to a RESP by the government. The goal is to help parents save toward education. The money can be used to cover the cost of part- and full-time studies in a designated university, college, trade school, publicly funded college or pre-university, or apprenticeship program. Parents, guardians, relatives, and others that choose to open a Registered Education Savings Plan are required to make a personal contribution. For every $1 contributed, the Canada Education Savings Grant contributes 20 cents.

CIBC Air Canada® AC conversion™ Visa Prepaid Card

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CIBC features a selection of standard and specialty credit cards for customers with different credit scores and requirements. Cards come with beneficial features such as no foreign conversion fees, no annual fees, cash back, complimentary bonuses, and a lot more. At the same time, while customers with excellent rating have plenty of choice, those with poor and average credit have fewer options to choose from. In fact, a handful of financial institutions in Canada offer prepaid and secured cards, and the CIBC Air Canada® AC conversionTM Visa Prepaid Card is one option to consider.

Overview, Features, and Fees

The CIBC Air Canada® AC conversionTM Visa Prepaid Card is a great choice for borrowers who have a less-than-perfect credit rating and are turned down by other issuers. It is a good option for customers who need a card to shop online, make in-store purchases, etc. Customization is free of charge. АТМ withdrawals are also free on the territory of Canada. The fee varies by country, i.e. it is 3.95 AUD for withdrawals in Australia, 1.95 GBP in Britain, and 349.95 JPY in Japan. The first withdrawal each month is free even outside of Canada. Foreign conversion fees apply in the amount of 2.5 percent over the rate paid by the bank. Conversion fees apply for non-supported currencies. There is a card replacement fee in the amount of $25 CAD. It is important to note that cardholders cannot make recurring payments or non-ATM withdrawals, i.e. withdrawals at a bank or another financial establishment are not allowed. Finally, an optional shipment fee applies equal to $25 CAD.

Application

It is easy and quick to apply for the prepaid card – customers are asked to provide basic information and details, load the card, and review and confirm. There is a minimum amount that customers are asked to load – $100 CAD. The maximum amount that can be loaded is $20,000 CAD in different currencies. The limit on the maximum balance is $20,000. There is also a limit on the amount that can be transferred by a single transaction – $2,999.99 CAD. The maximum amount to withdraw at an ATM per day is $2,000 CAD.Apply NowApply Now

Keep in mind that amounts loaded are not insured by the Canada Deposit Insurance Corporation.

There are eligibility criteria to meet when applying, and one is to be of legal age. Customers who have an address in Canada and are Canadian permanent residents qualify. There is a limit of one prepaid Visa card per cardholder meaning that additional cards are not available.

Supported Currencies

The list of supported currencies includes Swiss Franc, Turkish Lira, Japanese Jen, Australian Dollar, and Hong Kong Dollar. Other supported currencies are Great British Pound, Euro, United States Dollar, and Canadian dollar. Transactions in non-supported currencies can be made as well. However, the amount transferred is converted to CAD to make a transaction.

Customers are free to load money in different currencies of their choice. They are offered the option to load a maximum of 10 currencies and what is more, they are free to lock up the rate while loading. There are no added conversion fees when making purchases at major e-commerce retailers. Given that users are free to load amounts in different currencies, the CIBC Air Canada® AC conversionTM Visa is an excellent choice for frequent travelers and persons making purchases at different retailers worldwide. The fact that customers are free to load funds in 10 currencies means that they can make purchases in 45 countries worldwide, and no foreign transaction fees apply.

Benefits for Cardholders

There are plenty of benefits for cardholders, one being the fact that customers are free to use the card at about 36 million retail locations around the globe. The card can be used at ATMs and to make purchases in-store, over the phone, and online at retailers where VISA cards are accepted.  Another benefit is that the card comes with a chip and PIN technology for safety and peace of mind. The chip and PIN technology is a great add-on to protect customers and their money from theft, fraud, and other incidents. The fact that the CIBC Air Canada® AC conversionTM Visa is not linked to an active bank account means that the bank does not hold personal information for customers. Thus, customers are protected against identity theft and fraudulent activity. A third benefit is that the bank offers 24/7 support should anything happen. In case of a stolen or lost card, holders are free to call the bank to request card replacement. They can request emergency cash as well. Note that a replacement fee applies. Finally, even customers who don’t have a bank account at CIBC are welcome to apply for a prepaid Visa card.

Mobile App and Features

Customers can use a mobile app to move amounts between different currencies, load money, check their balance, and a lot more. The app allows customers to select a currency and shows the exchange rate and load amount. There are plenty of beneficial features for cardholders, one being the option to transfer money between different currencies. Customers are free to access and view their transaction history to check for errors, view latest purchases, or keep track of purchases and expenses. Another beneficial feature is the option to reload the card and choose from different currencies. Once funds have been loaded, the app shows details such as the transfer date and transaction ID. While there are plenty of beneficial features, keep in mind that additional service charges may apply. It is a good idea to contact the bank and ask about additional fees when using the mobile app.

There is a French and English version. The mobile app can be installed and used on Android devices, including mobile phones, tablets, and others.

Checking the Balance

There are different ways to check the available balance – by phone, through the mobile app, or online. Customers can activate the prepaid card in two ways, by using the mobile app or online.

Refresh Financial Secured Credit Card

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Refresh Financial offers a new secured card in light of the fact that credit conditions are tightening in Canada, especially for customers with fair and poor scores and average and low income. Many Canadians use credit cards in emergencies, to pay for car rentals and hotel bookings, to make in-store and online purchases, and so on. Some of them have poor credit and access to fewer options than those with stellar scores. The Refresh Financial credit card is one option for customers with less than perfect scores and stable income.

Market Conditions

The largest player in the market, People’s Trust discontinued their secured card while other providers tightened up conditions, making it more difficult to qualify with bad credit. People’s Trust is no longer accepting applications but existing holders can still use their cards. This is unfortunate given the low interest rate of 12.99 percent and low minimum deposit of just $500. The Affirm MasterCard Credit Card is another product suitable for borrowers with a poor or fair score.  Similar to People’s Trust, the company stopped issuing new cards. The only option that borrowers with poor credit have is the secured Visa offered by Home Trust. The card goes with no annual fee and a minimum deposit of $500. Customers need a bank account to apply but borrowers with poor credit have better chances to qualify compared to unsecured varieties. In reality, however, Home Trust does not approve many applications. The fact that Refresh Financial offers a secured card is good news for applicants with poor credit. As we all know, there are many ways to get bad credit, including divorce, items in collections, identity theft, bankruptcy, consumer proposal, and loss of job. Other reasons include car repossession, late or missed payments, mortgage foreclosure, and high card balances. People end up with a poor credit score when they cosign, fail to pay bills on time, have a seasonal or part time job, and have low income and too many commitments.

Who Is This Card for?

A secured Visa from Refresh Financial is ideal for borrowers with a blemished credit score. Whether applying for the Refresh secured credit card or another product offered by the company, approval requires banking verification (a bank account), a Canadian ID, and minimum monthly income.

Security Deposit, Perks, and Other Features

The card goes with a security deposit of $200 – $10,000, which is less or equal to the credit limit. Customers are offered free access to a program called Financial Intelligence Training. This is a financial education program to help customers gain basic skills and learn how to set financial goals. Borrowers learn how to save money, avoid credit traps, and build personal wealth. They are offered free short videos which are divided into 7 series. The short videos feature money tips and advice to get a better idea how credit works. In addition, customers are offered access to convenient tools such as credit builder calculators to find out how their credit score impacts the interest rate on their card, vehicle or personal loan, or mortgage loan.

Added Benefits

There are further benefits for customers, one being that borrowers have access to more than 1 million ATM locations across the globe. They are also free to make online purchases and shop at more than 24 million in-store locations in Canada and abroad. What is more, the card goes with all benefits of Visa and helps customers build or rebuild their credit. Visa benefits include roadside dispatch, zero liability, rental collision damage waiver, and reporting for stolen and lost cards. Cardholder inquiry service is an added benefit for Visa holders. The rental collision damage waiver, for example, is a beneficial feature in case of damage due to theft or collision. The coverage is offered to all standard Visa holders. The secured Visa from Refresh Financial also comes with standard benefits such as emergency cash disbursement and card replacement and other convenient features.

Rates and Fees

  • Interest rate: 17.99 percent
  • Purchase rate: 17.99 percent
  • Annual fee: $48.95

The Refresh secured credit card is advertised as the lowest cost card on the market, and no credit is required. All payments are reported to the major bureaus to help borrowers rebuild credit. Customers have the chance to rebuild credit over time provided that they make on-time payments. Like other secured cards, maxing out and missing payments has an adverse effect on the customer’s score.

Other Products Offered by Refresh Financial

The company offers a credit building program as well, which is an alternative to secured cards. There are several benefits for participants, and one is that they do not need up-front money. On-time payments are reported to the major credit bureaus which helps borrowers improve their scores. On the downside, there is an initial commitment fee. In fact, customers can choose from different solutions to rebuild credit. One alternative for borrowers with poor credit is the Fresh Start program offered by Refresh Financial. Customers get approved regardless of their score and provided that they are committed to rebuilding credit. The amount available varies depending on the borrower’s requirements. Payments are reported to the bureaus like payments on an installment loan. Timely payments prove potential lenders that applicants are trustworthy and responsible. A portion of the money paid goes toward fees and interest charges, and borrowers are free to use the remaining amount in any way they like after they finish the program.

Keep in mind that the company does not offer credit repair services but only the Refresh credit card and short term secured savings loans. Repayment terms vary from 36 to 60 months and loan amounts are in the range of $1,200 to $5,500. There is a loan set up fee that can be as low as $200 and as high as $400.

The Small Business Tax Reform in Canada

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The proposed reform aims to introduce changes and eliminate tax loopholes that allow self-employed people to pass income to spouses and other family members. This is a hot topic in Canada as a recent Ipsos poll shows that 55 percent of respondents support the reform while 44 percent oppose the changes, especially small businesses. Making changes to the tax law to deal with vague and obscure language sounds like a good idea, but is it so in reality?

Justifications to Implement New Measures

The reform targets self-employed Canadians and the loopholes they use to reduce their tax burden. The focus is on investment portfolios and capital gains. Proponents claim that the new tax reform can help reduce income sprinkling. Income sprinkling enables self-employed persons to divert income to children and other family members by way of paying dividends, wages, and salaries. According to a report by the Department of Finance, this is a common practice, and about 50,000 small businesses in Canada use sprinkling to pay less in taxes. This is also a way to benefit from passive investments, a practice that the proposed measures aim to limit. This can be done by means of a reasonable test to find out whether children, spouses, and other family members participate and actually contribute to the family business. The pay, whether in the form of wage or salary, is reasonable only if it is comparable to the pay another person would get for the work done. When it comes to capital gains, profits generated through the sale of real estate, stocks, and securities fall in this category. In the view of liberals, diverting income in the form of capital gains gives unfair tax advantage to CCPCs. At present, businesses are free to sell shares to another company and thus avoid taxation. Passive investment is also an issue for Liberals. Income generated through an investment portfolio falls in this category. It is different from active income generated through business operations. The problem with passive investments is that businesses benefit from a significantly lower corporate tax compared to active income.


In addition to small business owners, certain professions take advantage of this to reduce their tax burden. These include physicians, lawyers, farmers, and others. The planned reform is targeted at farming families that distribute profits and work responsibilities to pay less in taxes. Physicians also oppose the new measures, and this can be explained by the fact that most of them are incorporated. A report by the Canadian Medical Association proves this. Again, this is a way to pay less. Some physicians support the tax reform but believe that the best way to implement it is through a transition plan.

Proponents note that the goal of the new measures is to establish a fair tax system for everyone. This can be done by closing gaps that offer tax advantages to those incorporated as a Canadian controlled private corporation. At present, the tax system encourages well-paid Canadians in the high-income bracket to use CCPC to reduce their tax rate and increase their net income. The new measures are also expected to increase government revenue to help vulnerable members and communities and citizens marginalized at the fringes of society. And while Prime Minster Justin Trudeau and Finance Minister Bill Morneau noted that this is not the main goal, a tax reform is one way to increase government revenue.

What Opponents Say

Opponents, on the other hand, point to the fact that the proposed changes place an undue burden on small businesses, especially those planning to expand or invest in new products, services, or operations. And many businesses would be affected as figures by Statistics Canada show. Out of 1.17 million employers operating in the country, small businesses account for 98 percent of employers or 1.14 million. More than 50 percent operate in Quebec and Ontario. Opponents also point to the fact that the new tax reform targets small businesses such as corner stores, garages, bakeries, and florist shops, and not just lawyers, doctors, and other professionals in the high-income bracket. Small businesses such as coffee shops, landscapers, family restaurants, roofing businesses, electricians, and plumbers would be affected. And while the proposed reform is not expected to destroy small businesses, the new measures might discourage many from starting a business. At the same time, small businesses are the backbone and driving force of the Canadian economy.


Opponents also warn that cutting tax benefits means less revenue for small businesses. This often goes hand in hand with fewer benefits, basic or reduced health insurance, longer working hours for employees, and layoffs. The government counters this argument by pointing out that businesses with an annual income of $150,000 CAD would be impacted the most. The same goes for self-employed individuals with extra income after making the maximum contribution to their tax-free savings account or registered retirement savings plan.

Salaried Employees vs. Small Business Owners

Proponents believe that the way things are, small businesses get unfair tax advantage over persons working regular salaried jobs. Opponents to the reform, on the other hand, argue that running a business is a costly endeavor. A lack of paid leave is also an argument in favor of more lenient taxation for small businesses. They suffer further disadvantages such as no guaranteed salary, no guaranteed vacation and pension income, etc. To sum it up, the main downsides of running a small business are fewer free benefits, less security, and lack of regular income stream. Proponents to the tax reform counter this argument by explaining that entitlement to state benefits is not a justification to offer tax advantages. Self-employment also offers advantages in the form of financial rewards, especially when it comes to independent contractors. Many large businesses choose to work with independent contractors instead of hiring employees, which is, by itself, a long-term commitment. Basically, it is less expensive to hire a contractor than an employee. To this, contractors are required to supply their own equipment, tools of trade, mobile devices, computers, laptops, software, etc. Independent contractors are also allowed to deduct business-related expenses for taxation purposes. This is yet another way to increase financial rewards.

Finally, whether the new measures are fair or not is a difficult question to answer. Tax experts draw attention to the fact that there are too many exemptions and exceptions in the current tax code. Even if the new measures come into effect, there is plenty of room for improvement.

5 Ways to Improve Your Credit Score

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There are plenty of ways to improve your credit score and become a trustworthy borrower who uses credit responsibly. Eliminate outstanding balances, pay your bills on time, and never go over your limit to boost your score.

1. Eliminate Card Balances

This is the first step to make, and there are different ways to go about this. If you have high-interest cards, you may want to shop around for balance transfer cards with low promotional rates. In fact, some banks offer zero interest over a period of 6 to 12 months. Another way to eliminate outstanding balances is to focus on one of your cards first and pay as much as you can. Financial experts advice to start with the lowest balance, i.e. set a short-term goal that brings quick results. Meanwhile you can pay the minimum toward your other balances. The next step is to lower your utilization rate because this is what brings your score down. Simply divide the balance by the credit limit for each card to find the utilization rate. Then pick the card with the highest utilization rate and pay as much as you can to reduce the outstanding balance.

2. Pay Bills on Time – Try to Pay Your Bills in Full by the Due Date

Paying your bills on time is yet another way to boost your score because delinquent bills usually show on your report. In fact, if you are behind with your payments, including phone, electricity, gas, or other bills, it is likely that your provider contacts a collection agency. Your credit score will suffer because information about late payments and delinquent bills is forwarded to the credit bureaus.

3. Reduce the Number of Credit Applications You Make

A large number of credit applications can affect your credit score because lenders usually pull your report to see whether you are able to manage debt responsibly. They will do this regardless of whether you apply for a personal loan, car loan, credit card, or anything else. The problem here is that the number of new applications is one factor that affects your score. In fact, applications make 10 percent of your score. A major mistake to avoid is to apply with multiple providers over a short period of time. This will cost you more score points than applying for credit with one lender. Wait for some time before you apply with another provider unless you are desperate for credit. If this is the case, yes, your score may suffer, but there are other factors that lenders take into account (like whether you make regular payments and if you have a good or tarnished score). Plus your score is based on other factors such as the length of your history, your utilization rate and credit mix (vehicle and personal loans, mortgages, lines of credit and credit cards, etc.)

And even if you credit score does not suffer due to multiple applications, providers may turn your application down. This is because you applied for multiple cards at the same time.

4. Make Sure You Have a Credit history

If you don’t have credit history, it is difficult for lenders to determine whether you are a trustworthy customer. There are several ways to start building a credit history, and one is to apply for a card with a small limit. You can also use a department store card to this end, but remember that department stores usually offer higher than average rates. Another option is to apply for a small loan with your local union or bank, especially if you are a regular customer. If you have a savings or checking account with a local bank, it is a good idea to visit them first. Regardless of whether you apply for a credit card or a personal loan, make sure that you make payments on time. Late payments are one of the reasons to have a fair or poor credit score.

5. Don’t Go over the Credit Limit on Your Credit Card

This is a no-no if you have a tarnished credit score. Your score will be affected even more if you go over your limit and do this regularly. The limit on a credit card is the amount you are allowed to charge when making payments. You are free to opt out so that you don’t go over the limit by mistake. In this case, your card will be declined when you try to make a transaction. While this can be embarrassing, your credit score is unlikely to suffer. What is more, you will save on over the limit fees that some providers charge. Over the limit fees are often equal to the amount by which you exceeded the limit. If you go over by $20, for instance, the fee will be $20.

What Else You Can Do

There are other ways to boost your credit score and surprisingly, one thing to do is to leave debt on your report. Bad debt will be removed in several years anyway. Good debt, however, shows that you are capable of managing credit in a responsible manner. And the longer your credit history, the better – leave good accounts on your credit report for as long as possible. If you have credit cards with a solid record of payment, it is a bad idea to close them. Another way to boost your credit score is to contact your financial institution and ask them to erase debt. If you have a good reason, say you were unemployed over the last couple of months, your bank may be willing to do this for you. Finally, it pays to request a free copy of your report and check for any errors and omissions that affect your credit score.

Budget March Break Ideas for a Romantic Beach Getaway or Winter Vacation

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There are myriads of unique and exciting travel destinations for an unforgettable March break vacation away from home. Even if you are a budget traveler, inexpensive holiday and travel spots abound. Just pick a destination and pack your suitcase!

Caribbean All-Inclusive Vacations

If you are looking for a budget-friendly destination and a beach holiday at the same time, how about a sunny vacation on a Caribbean island? There are plenty of great resorts for a March break vacation to enjoy delicious food, warm weather, and superb service. Caribbean resorts are luxurious and inexpensive and offer a variety of activities for your leisure time, including golf, scuba diving, land sports, and watersports. Adventure tours are also offered. From off-road excursions and mountain biking to canopy tours and catamaran sails, you are sure to have a memorable vacation. Entertainment venues also abound, offering unlimited spirits, theme nights, limbo dancers and fire eaters, acrobats, and a lot more. The islands in the Caribbean are also the perfect choice for a romantic getaway and candlelight dinners now that weather is nice, with daily highs of 30°C. Whether you choose to travel to Grenada, Antigua, Barbados, the Cayman Islands, Cuba, or Jamaica, you will love it. All-inclusive resorts offer concierge and butler service, free wifi and land sports, and plenty of entertainment for free – beach parties, costume and theme parties, bonfire parties, live shows, and a lot more.

Mexico

Mexico is also a good deal for your spring vacation as weather warms up in March, with average daily averages of about 25°C. You will find great deals away from the traditional tourist zones. All-inclusive resorts offer plenty of entertainment for your entire family, from theatre shows and water parks to teen’s and kids’ clubs, mini-Olympics, and handicrafts. Tourists also enjoy dance instruction, mariachi music, golden beaches, and superb food. In some resorts, kids stay for free. The best part is that you can choose from a great variety of package deals, from deep dive packages and luxury vacation packages to flight and hotel and hotel only packages, and more. There is plenty of choice when it comes to holiday destinations – Riviera Maya, Riviera Nayarit, Mazatlan, Los Cabos, Cozumel, Cancun, and many others. You will enjoy gorgeous, palm tree-lined, sunny beaches, underwater activities, nightlife, fishing activities, and a lot more.

Florida

Florida is nice and sunny at that time of the year. And there are all-inclusive resorts, too, offering world-class accommodation, superb food, spa, and family-friendly games and activities. Many resorts offer activities such as paddle boarding, kayaking, and fishing. Some resorts even feature shopping villages. Recreation activities abound, from parasailing, jet skiing, and boating and scuba diving to live entertainment and cruises.

Indonesia

Indonesia is also a great choice for Canadians, especially for budget travelers. There are plenty of ways to stretch your dollar here. If you don’t mind staying in a guest house in Jakarta, for example, you can find accommodation for as little as $8 per night. A double room on Lake Toba or the island of Sumatra costs as little as $3 per night. Food is also inexpensive. A good single plate meal costs between $0.50 and $1.70 if you don’t mind eating streel-style food. You will pay around $2,50 – $5,50 a meal at a restaurant. Entry tickets for museums and other attractions are also inexpensive. A visit to the Indonesia National Museum will cost you just $0.23. When it comes to all-inclusive resorts, there is plenty of choice, whether travelling solo or with kids. Resorts offer cultural and artistic activities, sports, beach and ocean views, windsurfing, sailing and golf schools, and a lot more. Sports such as cardio, tennis, squash, snorkeling, kayaking, and water polo are often included in the price. Some resorts offer golf at extra cost. Gourmet dining is always a plus.

The Philippines

Also a great destination for budget travelers, this is a good choice for your spring vacation, especially if you plan to fly from the West Coast. Plus weather is nice in March (the high season ends in April) as opposed to June – September when typhoons and storms hit. Accommodation is more expensive but you will find plenty of good deals for your holiday. There are all-inclusive resorts that offer spas, private beaches, beauty salons, shopping arcades, swimming lessons and fitness training, billiards tournaments, snorkeling safaris, and a lot more. When it comes to budgeting, the cost of living depends on location and season. At the same time it is 50 percent cheaper to live in Manila than in cities such as Tokyo, London, and Sydney. To give you a basic idea, a combo meal (burger, Big Mac, etc.) will cost you around $3 at a fast food joint. Domestic beer (0.5l) costs around $0.90 in the store. If you prefer Coca-Cola, you will pay around $1.30 for a 2l-bottle. Prices are affordable. Taxi trips are also inexpensive, i.e. around $11 per 5 miles.

Ski Vacation

Whistler

Whistler is a popular spot and ski resort to spend your March break vacation away from home. Ski packages are available, including snow school, equipment rentals, lift tickets, accommodation, and more. Some hotels also offer event lodging deals as well as golf vacation packages and last minute deals. Whistler also features Olympic tracks, snow peaks, diverse wildlife, and glaciers.

Slovenia

If you are up for a vacation away from Canada, why not visit Slovenia? The country takes pride in having nice skiing resorts which are quite affordable. In fact, there are many low-cost hotels and other accommodation options to go skiing or snowboarding. Check ski resorts such as Kranjska Gora, Vogel, and Mariborsko Pohorje, for example. There are pistes for beginners, intermediate, and expert skiers.  Mariborsko Pohorje is one of the largest skiing centers in the country, situated close to downtown Maribor. Visitors enjoy the mountainous landscape and first-class ski slopes and pistes. There are wellness and spa centers, restaurants and cafes, and excursions and guided tours on offer. You can join a wine tour or culinary tour, for example. Hiking and cycling tours are also available to visit the Botanical Garden and Pohorje forests. Another option is to visit the Organic Urban Center which is situated in Maribor and illustrates the importance of healthy food choices.

Mont Tremblant

If traveling to Slovenia looks like too much, how about a ski vacation at Mont Tremblant? There are plenty of good deals and packages for your March break, including Scandinavian spa packages and snow and ski packages. If coming over with children, what they get is lunch boxes, snowboard and ski lessons, and equipment such as helmets, boots, poles, skis, etc.

When it comes to accommodation, prices depend on time of the year but there are package deals to look into. In any case, you can find a decent hotel for about $70 (breakfast included). It is also a good idea to book in advance. Some resorts offer lift tickets as well (included in the package). Many hotels also have game rooms fitted with consoles, foosball, air hockey, table hockey, and a lot more.

HBC Credit Card

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HBC credit card is offered by Hudson’s Bay Financial Group in Canada. It is tied to the loyalty rewards program offered by the company.

Overview

The HBC credit card is marketed as the best way to earn Hudson’s Bay rewards points at approved stores around Canada. It functions as a rewards program as well as a store card. Though people can apply separately to the rewards programs, HBC cardholders can double the points they earn at stores. Each $1 spent using this credit option can earn as much as 4 points. Regular rewards program subscribers only get 2 points per dollar spent.

Cardholders can stack up points without time limits. People who can earn up to 2,000 points receive a $10 gift voucher. Rewards points can be redeemed as Hudson’s Bay gift vouchers to use online on thebay.com and Home Outfitters.

For this credit card, HBC does not charge an annual fee. But the annual interest rate is 29.9% by default. Customers should refer to the Disclosure Statement provided following approval for detailed legal information. Cardholders who pay off their balances by the due date can enjoy an interest-free grace period for 21 days for all new purchases. Customers should note that the grace period does not apply to balance transfers or cash advances.

Cardholders can earn even more points by using this rewards credit at “exclusive events.” These events will be announced online and users can get notification of them by signing up at thebay.com. Cardholders can get the best returns by using the HBC card at Hudson’s Bay Company stores. Using it can get customers free shipping and up to 90-day returns on purchases on the thebay.com

The HBC credit program should not be confused with the Hudson’s Bay MasterCard. The MasterCard can be used anywhere regular MasterCards are accepted, both online and offline. The HBC credit card can only be used at thebay.com, Home Outfitters, and Hudson’s Bay. With the MasterCard, users can earn 2 rewards points per each dollar spent on non-Hudson’s Bay Company stores. Cardholders can earn up to a 25% bonus each year for all such points. With the credit program, each point earned can be doubled at the stores.

Though the two are separate, customers must present a Hudson’s Bay MasterCard when making purchases at Hudson’s Bay Company outlets to get store points for the HBC credit card. When the MasterCard is used at other stores, the reward points will be automatically added to the account associated with the credit card.

Earlier, The Bay allowed cardholders to convert points to Air Miles and Esso Extra points. However, this is no longer possible. The Air Miles and Esso partnerships ended on September 30, 2015. In its place, the company added a third-party service called points.com to allow cardholders to add extra points.

Certain associated transaction fees and service charges, such as for foreign currency conversions, may occur when using the attached HBC account. Customers who subscribe to the special payment plan must pay $99 unless the fee is lowered or waived upon request. Payments and cheques that bounce cost $30 each. Rush cards cost $20. The over limit for this card is $29 if the account balance per billing periods exceeds the preapproved amount. Customers will be charged a fee equal to the existing balance if the accounts are inactive for six consecutive billing periods (usually months).

Customers do not have to be enrolled in The Bay Rewards program to apply for or receive a HBC credit card. Those who are approved will be automatically enrolled in the program. Customers can earn more points with the rewards program by spending more. Customers who spend more than $1,200 using one of these accounts can get VIP benefits, which mainly mean more points per each dollar spent. VIP and Plus customers also have better chances of doubling the points they earn.

The Hudson’s Bay rewards program was quite popular in the Canada in the past. However, participation has dwindled because most Canadians don’t value the program as they used to. The new HBC rewards program that Canadians apply for is a completely revamped version not offered in previous decades. The new program rewards customers more for spending at The Bay and for combining the credit card with the MasterCard.

Pros and Cons

Pros

  • No annual fees associated with the HBC credit card.
  • The more a customer spends, the more points he or she can earn per dollar spent. Customers who spend more can upgrade accounts to VIP or Plus to increase chances of doubling points.
  • Excellent option to save money at thebay.com and Home Outfitters.
  • Rewards program can be extended to third-party stores when used with a Hudson’s Bay MasterCard.
  • Free $10 gift voucher awarded to customers who earn 2,000 points.

Cons

  • HBC credit cards only earn rewards at thebay.com, Home Outfitters and other Hudson’s Bay companies. Customers need a Hudson’s Bay MasterCard to earn points from third-party stores.
  • High annual interest rate close to 30%.
  • Rewards can only be redeemed on an annual basis.
  • The number of outlets available to earn points is limited.
  • Air Miles and Esso Extra points are no longer offered as redeeming option.

Comparison to Canadian Rewards Credit Cards

The most popular Canadian cash back rewards programs, such as Tangerine and American Express Simply Cash, offer wider shopping options in comparison to HBC. This card is designed mainly as a loyalty program. The shopping options of customers are largely limited to Hudson’s Bay Company stores and affiliates.

In addition, rewards programs like Tangerine offer cash back rewards on a monthly basis. With the HBC card, customers can only redeem points once a year. Customers can mostly benefit only by combining the HBC MasterCard with the credit card. On the plus side, there are no annual fees that are charged to associated accounts. But there’s a 29.99% interest rate.

This card is best suited for customers who already frequently shop at places like Home Outfitters and thebay.com.

Top 5 Canadian Travel Credit Cards

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Credit cards with travel perks are truly the best. You can benefit from these if you enjoy traveling, are a frequent flyer, love getting a bargain on something, bonus hunter, or all of the above. Subscribing to one of the best credit cards in Canada will save you a lot of money on airplane tickets, travel insurance, luggage claims, and many other similar things.

Consumers often evaluate credit cards rewards programs based on value offered per point. A good way to measure is to check how may air miles or associated perks each dollar you spend on the card gets you. While value points are important, it’s also important to consider other factors. For example, the annual fee should not cancel out the rewards you earn per point.

The cost per reward should also match the rewards on offer. Once all the fees have been considered, the credit card should offer a number of perks such as insurance coverage, low foreign transaction fees, travel opportunities, and so on. Travel credit cards that combine the best cost per reward with an increased number of perks are the best to subscribe to.

Here is a list of five of travel credit cards in Canada that offer the best value as described above:

1.     American Express® Gold Rewards Card    amex-goldrewards

Amex Gold is really the gold standard for travel credit cards in Canada. Points earned can be used for any travel-related purchase either online or offline. In some cases, you can convert points to frequent flyer programs. The welcome bonus is 25,000. For purchases made for $1,500 or above during the first three months, members get rewards points that can convert to close to $550. The annual fee for the first year is automatically waived, which will save you $150.

The biggest advantage with this card is that you can double your points easily by spending money at gas stations, grocery stores, and pharmacies. Plus, travel-related expenses incurred for road, air, rail, or water transport also counts. In some cases, lodging and tour operator charges paid with the card can earn you points.

An Amex point is equivalent to one cent. That makes the base rewards rate 1% and the bonus rate 2%. These rates can be increased by transferring points to Aeroplan. You will earn points for booking a flight, renting a hotel room, or hiring a rental car. Then, these earned points can be redeemed at full value to pay off any travel expense that shows up on the statement plus taxes and service charges. No extra charges incur when you transfer points for Aeroplan or British Airways AVIOS program.

2.     TD® Aeroplan® Visa Infinite Card

This is an excellent card to start collecting Air Miles with. You don’t have to pay any annual fees for the first year of use and you will receive a welcome bonus of 30,000 miles. You will earn 15,000 miles with the first purchase you make using the card. If you keep the card active for 90 days following approval, you receive 10,000 miles more. You can receive 5,000 miles per authorized card user you add. For the first year, the primary cardholder can get an annual rebate of $120. This is a lot of incentive just for signing up.

Stack up 25,000 points on the TD card and that will be enough to fly from Canada to any city in the United States or Mexico. Each air mile you receive using this card will amount to roughly 1.28 cents per mile for economy tickets. For business class, it would amount to about 2.2 cents per mile. This is definitely a bargain. Earning mile points is not that difficult. The card offers an extra 1.5 points per dollar spent buying gas, groceries, or pharmaceutical items. At this amount, your earn rate will be at about 3.3%.

There are many other cherries on top of this cake, including coverage for travel insurance, trip cancellations, baggage rental, car rental, and flight interruptions, among others.

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3.     MBNA Rewards World Elite MasterCard®mbna-elite_en

There are many incentives offered for signing up, including a sign in bonus of up to $100 and a waiver for first year annual fee. This card does not have a minimum spending requirement. Everything earns a 2% reward rate. This card allows users to redeem cash credit points for anything, which includes your travel-related expenses.

MBNA offers 2 points per dollar spend on all purchases, which is a solid advantage this card has over the others. There are no cap limits on how many points you can earn either. If you are a frequent flyer, you can redeem points for anything travel related. Keep in mind that points can be redeemed against any purchase regardless of whether it’s travel related. So, if you only fly periodically or once every two or three years, this is the best travel credit card to have.

4.     Rogers™ Platinum MasterCard®rogershome-credit-card

Most travel credit cards have a downside: hefty foreign transaction fees. Rogers is actually one of the few travel credit cards to subsidize transaction fees incurred overseas. You can earn a whopping 4% cash back on any foreign purchase. The rewards rate for all other purchases is 1.75%. Points can be redeemed regardless of the type of expense.

There’s no annual fee during the first year, and you will receive a $25 welcoming bonus. Cash rewards can be redeemed once annually, which will include travel expenses. It’s possible to not pay any annual fee at all by pre-authorizing payments. Also keep in mind that Rogers offers one of the best travel insurance policies in Canada with this card.

5.     Desjardins Visa Odyssey Golddesj-odyssee

The travel credit cards mentioned above on this list require hefty monthly income levels. Desjardins travel credit card is one of the most egalitarian offered in Canada. You can get approval without earning a six-figure salary.

This card comes with a solid travel medical insurance policy that will cover you and your family for 60 days straight when out of your province. This is a significantly longer coverage period than the industry average. Also, the policy covers up to $5 million in claims in comparison to others that offer only one or two million. In addition to insurance, there’s car rental, lost baggage, baggage rental, trip delay, flight cancellation, purchase protection, and accident coverage as well.

So, if you are on the hunt for a really good travel credit card, choose one from the above list for the best perks and consumer options.

Tangerine Cashback Credit Card

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Money-Back Credit Card
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Tangerine cashback credit cards are offered by Scotiabank-owned Tangerine bank. They are available exclusively in Canada. It’s one of the most popular cash back credit cards available in Canada.

Overview

The main draw of the Tangerine cashback credit cards is that there is no annual fee attached to it. Each purchase a user makes using the Tangerine cards earns cash back. The earned rewards can be deposited directly back to the credit card account so that it applies towards the balance.

A user has to select 2% money-back categories to get 2% cash back on these purchases, plus 1% on all other purchases. Tangerine credit cards are usually attached to a Tangerine savings account, so the rewards can easily be deposited. Cashback rewards deposited to the savings accounts are treated just like other savings deposits and will earn interest. Users can choose the redemption option on the savings accounts and choose two 2% cash back categories. The other option is to have the money directly deposited into a credit account, where the rewards will be applied against the other balance.

The advantage of Tangerine is that rewards do not need to be requested in advance. Rewards are also unlimited and are not subject to a throng of restrictions. Lack of annual fee means users can get cashback without rewards being deducted by service charges. Money-back rewards are also awarded on a monthly basis, rather than an annual basis.

It’s important to note that white there is no annual fee, there are several charges for other transactions. Each foreign currency exchange will have a 1.50% charge added to the converted transaction amount. Cash advances are $2.50 in Canada and $5 outside Canada. Balance transfer charge is 1% of the transfer amount or a minimum of $5. Dishonoured payments cost $25. The overcharge limit is $20, and only one overcharge payment is allowed each month. If you want to print a past statement, it will cost you $5. No charges apply to print current monthly statements.

Tangerine cashback cards are for personal use only, and businesses are not issued these cards. A single card can have up to 5 authorized users attached to the account. These authorized users will be able to make purchases and can take cash advances on the individual credit cards issued to them. However, authorized users cannot change the credit limit on the account or request balance transfers to other accounts. The primary cardholder will be responsible for paying the total balance on the account. It’s important to note that the primary cardholder is responsible for any and all transactions authorized users make.

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Users can change the 2% money-back categories after activating the card anytime. Changes will take effect once the first monthly statement arrives. Users have the freedom to request changes throughout. However, existing categories must have been in place for 90 days before the changes can be implemented.

Pros and Cons

Pros

  • No annual fee being charged. Most money-back credit cards have annual fees of close to a $100.
  • Cash back is unlimited.
  • Users receive 4% cash back as a welcome bonus for the first 90 days.
  • After the first three months, users can receive 2% cash back on any two categories of their choosing, and an additional 1% cash back on all other purchases.
  • No earning caps or restrictions imposed on non-category purchases.
  • Cardholders can choose two categories from 10 options, which covers expenses such as gas, clothes, electronics, pharmacy, and certain recurring bill payments.
  • Freedom to change categories any time as wished.
  • Cash back rewards can be deposited to a savings account if desired.
  • Rewards are granted automatically. No requesting process necessary.
  • Add up to 5 authorized users to a single account.
  • Schedule automatic payments online.

Cons

  • No travel perks.
  • While the Tangerine cashback card can be used outside Canada, transactions may be limited or restricted considering international banking regulations and safety of overseas transactions.
  • A 1% balance transfer charge applies.
  • Balance transfers between authorized users is not allowed.
  • Overcharging is limited to only $20, and only one overcharge is allowed per month.

Comparison to Other Canadian Cashback Credit Cards

Currently, Tangerine cashback credit cards are highly favoured by consumers over other Canadian credit cards available on the market such as American Express Simply Cash Card and Rogers Platinum MasterCard.

One of the biggest advantages that Tangerine has is that cash back is unlimited and is deposited automatically without the need for formal requests. Users often have to make requests and sort through complicated bonus rewards programs to get the money-back on other similar cards.

Most cashback rewards programs offer bonuses at the end of each year. Tangerine cards offer cashback rewards on a monthly basis. Redeeming rewards is effortless and convenient. The rewards can be arranged to be deposited to a savings account or towards the balance of the account. This is an option absent from many other similar programs.

While the Tangerine card charges 1.5% foreign transaction fee, this is quite low compared to what many other money-back credit cards charge. Most offer rates closer to 2.5%.

There are other cards offering flat 2% to 4% rewards and bonus points for all purchases. However, these also require cardholders to show a minimum monthly income of $6,000 or more. The Tangerine card’s monthly income requirement is much lower. So, this is a good option for entry-level workers and those firmly in the mid-income category.

As there is no annual fee, the Tangerine credit card stands as a desirable alternative to cash back cards that demand premium yearly service charges.

Other similar programs, like American Express’s Simply Cash, offers 1.25% money back on all purchases. Tangerine offers only 1% money back on all purchases.  But remember, this is in addition to the 2% you get on selected categories. It’s easy to apply the higher rate for transactions you tend to conduct more frequently, like paying for gas, and also earn rewards for non-frequent transactions, like buying clothes, as well.

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