Life on Credit

The art of borrowing money

Surviving the Economic and Financial Impact of COVID-19

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The coronavirus pandemic has seriously hit the Canadian economy, especially in provinces such as Alberta, Ontario, and British Columbia where hundreds of thousands of jobs were lost. Rising unemployment is mainly the result of many industries being severely affected, from travel and transportation and recreation and entertainment to food and beverage services and accommodation. Rising unemployment has also resulted in a significant drop in car, retail, and home sales, and recent reports show that home prices are expected to drop by up to 5 percent due to the pandemic. Restaurants, gyms, sports facilities, and movie theatres are closed, with people being ordered to stay home. The drop in crude oil prices hit a blow on Newfoundland and Labrador and Alberta as they mainly rely on oil exports. This is largely due to travel restrictions, lockdowns, and stay-at-home orders which resulted in reduced oil demand across the world. Alberta’s major oil exporter Western Canadian Select hit a record low of less than $4, and experts warn that this usually happens during depression. University of Saskatchewan Professor Greg Poelzer explained, however, that for oil producers it is cheaper to reduce oil prices than to shut down and restart operations.covid-19Many Canadians who lost their jobs struggle with debt, whether mortgage, personal, or car loans, lines of credit, or credit card debt. Some complain that big banks refuse to defer payments on mortgages that are new. And while in most cases big banks are willing to work with customers and defer payments for 6 months, some finance companies and other non-bank lenders offer payment deferrals of up to 3 months. And while the pandemic has a devastating effect on Canada’s economy and many struggle to keep their finances afloat, there are some things to do even during turbulent times. To deal with unmanageable debt during the COVID-19 crisis, a consolidation loan can help save on interest payments. In the coronavirus aftermath, it is important to rebuild credit to get access to a range of borrowing solutions with flexible repayment terms and attractive rates.

Dealing with Unmanageable Debt – Apply for a Consolidation Loan

Applying for a debt consolidation loan is one option for Canadians paying high interest rates on personal loans and credit cards. Many financial institutions in Canada offer consolidation loans to help borrowers repay multiple debts provided that they are eligible. These include utilities, lines of credit, credit cards, and personal loans. Mortgages are one exception. The main benefits for customers include lower monthly payments and interest rate and a single payment. What is more, the borrower’s credit score is not affected. RBC, for example, offers consolidation loans and lines of credit to help customers repay outstanding balances faster. Those who choose to leverage their home equity are offered a lower interest rate. Customers who opt for a line of credit are free to access cash at any time, and they pay no annual fee. Borrowers who apply for a personal loan can choose a term of up to 5 years to lock in their rate.face mask

Another option to avoid high payday loan fees and credit card rates is to apply for a consolidation loan offered by Consolidated Credit. Customers can consolidate their existing card balances by moving them to a balance transfer account. One of the main benefits for borrowers is that they are offered a customized debt management plan that comes with reduced interest charges. Being a non-for-profit charity, Consolidated Credit Counseling Services of Canada works with customers to help them solve their financial problems and deal with debt. The goal is to help Canadians pay off their debts faster through debt management and credit counseling. The charity offers education, counseling, and consolidation. Customers benefit from a variety of educational resources with a focus on credit rating and the factors that affect it, household budgeting, and money management. Their debt management program allows borrowers to get rid of debt while credit counseling helps pay off outstanding card balances and take control of personal finances. Financial advisors examine customers’ budgets to offer advice on how to get more organized and manage money.

How to Rebuild Credit in the COVID-19 Aftermath

If your credit score suffered during the pandemic, there are different ways to rebuild it to access a pool of attractive borrowing solutions. One option is to apply for a secured credit card and another is to get a credit builder loan.

Applying for a Secured Credit Card

Secured cards offer many benefits, one being that financial institutions report to the main credit bureaus. The fact that account history is reflected in the report means that timely payments help rebuild credit. Some issuers offer additional benefits such as cash back, no annual fee, and no limit on rewards that can be earned. The Refresh Secured Credit Card is one option to rebuild credit and benefit from a low annual fee. Customers’ account history is reported to Equifax and TransUnion on a monthly basis, thus allowing them to improve their score. Approval is guaranteed, and customers are only asked to provide a valid government ID. Refresh takes into account factors such as budget, expenses, income, financial goals, score, and location but they do not run a credit check. Customers are offered a low annual fee of $48.95, and the interest rate is just 17.99 percent.

Applying for a Credit Builder Loan

This is also a good option for persons who are rebuilding credit or are looking to establish one. Credit builder loans are offered by unions, financial companies, and smaller loan providers. Upon approval, the borrowed amount is deposited in a savings account over a specified period and is returned after the loan amount has been repaid in full. Payments are reported to the credit bureaus.

There are many options to choose from, but if you are looking for a loan that helps you to rebuild credit and make approval for low-rate solutions more likely, check the credit builder loan offered by Refresh Financial. This is also a good solution for Canadians who have filed a consumer proposal or declared bankruptcy. It comes with an interest rate of 19.99 percent and there are no admin fees – you start building your equity, and credit score from day one. Customers also have access to a paid referral program and education. It is easy to make payments as they are scheduled on the borrower’s account. However, it is important to make timely payments to ensure that the account is in good standing. There is also an option to change the payment date as to avoid missed or late payments. Early repayment is an added benefit meaning that the outstanding balance can be repaid at any time. Refresh Financial also offers perks such as credit simulator, score updates, and discounts on wellness, entertainment, travel, and shopping. The Refresh Academy features templates, quizzes, and video courses that help customers to improve their financial literacy.

motusbank – Meridian Credit Union Creates a New National Bank

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A subsidiary of Meridian Credit Union, Motus Bank features a suite of financial products, including mortgages, personal loans, investment solutions, and savings and checking accounts. As a full-service digital bank, it will soon introduce banking services tailored to the needs of business customers. Motusbank is a Canadian federally chartered bank that opened doors in 2018 and is headquartered in Toronto, Ontario. It is also a member institution of the Canadian Deposit Insurance Corporation.

The idea behind the new bank is to offer customers across Canada the opportunity to access all services and products and to manage accounts online. In fact, virtually everything can be done by phone, mobile app, and online. The new bank is customer-oriented and offers checking and savings accounts with no monthly fees.

Meridian Credit Union

As Canada’s third largest credit union, Meridian offers personal and business financial products and online banking services. Individual customers are offered a selection of checking accounts, including U.S. dollar, senior, electronic, and limitless. Meridian also features youth, advantage, and high-interest savings accounts. There is an array of credit cards to choose from, with cash back, U.S., travel, and Visa benefits. Lines of credit, personal loans, and fixed and variable rate mortgages are also available. Travel insurance and mortgage protection are also offered as well as investment solutions such as registered retirement income funds and tax-free savings accounts. Business customers also benefit from a wealth of financial products, including business U.S. dollar checking and small business checking accounts. In addition to cashback credit cards, customers are offered business lines of credit, loans, and mortgages, and equipment financing and leasing. Meridian also features cash management and investment solutions and business planning assistance.

Competitors

Unlike financial institutions that have shareholders and pay profits, motusbank has members and the main goal is to offer personalized service, competitive rates and pricing, and the option to access all products online, including mortgages, investment solutions, lines of credit, and more.

Why Choose motusbank

This new full-service digital bank features a selection of investment, borrowing, and savings solutions with competitive rates. Given that Motus has no physical branches and associated overhead costs, customers enjoy affordable interest rates on mortgages and personal loans. Another benefit is the fact that decisions on applications for loans, mortgages, and other products are made quickly.

Personal Loans and Other Borrowing Solutions

Personal loans come with low interest rates that can be as low as 5.15 percent, and members can borrow up to $35,000. Secured lines of credit feature even lower interest rates (3.75 percent) to help customers secure financing for major purchases. It is quick and easy to apply, and customers only need to provide their social insurance number and information such as housing and family status and employment type. They are also asked about the amount required and the loan purpose, i.e. vacation, investment, home repairs, debt consolidation, or recreational vehicle, boat, or vehicle purchase. Motusbank also features fixed and variable rate mortgages with affordable interest rates that can be as low as 2.90 percent. 5-year fixed rate mortgages come with an interest rate of 3.09 percent. In comparison, Scotiabank offers an interest rate of 5.34 percent on the same type of mortgage, and the Bank of Montreal offers 3.54 percent. Secured home equity lines of credit also feature a low rate of just 3.75 percent. CIBC, for example, offers a rate of 3.95 percent on secured credit lines.

Savings and Checking Accounts

Motusbank also features a selection of checking and savings accounts, including RRSP, TFSA, and high interest savings accounts. Customers who choose to open high interest savings accounts can enjoy a rate of 2.25 percent. Savings accounts offer multiple benefits such as the option to make unlimited withdrawals and purchases, free-of-charge access to ATMs, no banking fees, no minimum balance requirements, and no monthly account charges. Motusbank also features checking accounts with no monthly fees, and customers enjoy unlimited Interac e-transfers. There are plenty of reasons to choose this type of account over products offered by other banks. The account has no minimum balance requirement and allows for unlimited bill payments and debit purchases. Another benefit is that every dollar earns 0.50 percent interest. Customers are free to make mobile check deposits and are offered 25 checks free of charge. Those who are travelling to the U.S. can access cash through the Cirrus or Accel ATM networks.

Investment Products

Motusbank also features investment solutions such as 5-year RRSP guaranteed investment certificates, 18-month TFSA GICs, and 18-month GICs. The 5-year RRSP GIC, for example, comes with a competitive interest rate of 3.25 percent, which makes it a good addition to a balanced investment portfolio. In comparison, CIBC offers non-redeemable 5-year RRSP GICs with an interest rate of 1.25 percent. Opening an account is quick and easy, and customers are asked to provide details such as personal information, term and length, and renewal option, i.e. reinvest in the same term or payout to the account. The bank features additional benefits such as tax free options, choice of non-registered and registered plans, and a low minimum investment of just $100. Terms vary from 1 month to 5 years.

Online Banking and Features

The online banking platform of motusbank offers convenient features to access and monitor investment accounts and view e-statements. Customers are free to download deposit forms and transactions and filter and sort accounts. Notifications, alerts, and secure messaging are also available. Depositing checks is also quick and easy and can be done from the customer’s phone. There is also an option to set up mobile alerts. The mobile app offers convenient features that allow customers to transfer money, make bill payments, and check account balances, including savings and checking accounts and tax free savings accounts. Mobile Bill Pay is a convenient feature that allows users to make bill payments and access more than 10,000 payees. The app can be used on Android and iOS devices.

The Money Mover service featured by motusbank offers customers the option to transfer large amounts of up to $10,000 daily and is free to use. Money is transferred within 3 business days. Users are also free to set up recurring and future transfers through the mobile app or online. Motusbank also features Interac payments to transfer amounts of up to $3,000 a day, and money is deposited immediately. Customers can make an unlimited number of transactions up to $10,000 a month.

The bank’s contact centre offers assistance to members and can be reached by dialing its international or toll free number. While the bank is fully digital, the fact that it is customer-centric means that the emphasis is on customer service. Motusbank also places an emphasis on safety and security, and all deposits are insured by the Canada Deposit Insurance Corporation.

Finally, the new bank also offers advice and practical information across a host of different topics related to borrowing, investing, and saving. The goal is to help customers learn more about dealing with debt, planning for retirement, preparing financially for a new child, and choosing the best investment solution. Other topics include home improvement loans, choosing between variable and fixed rate mortgages, down payments. The bank also features handy online tools such as mortgage prepayment calculator, savings calculator, retirement planning calculator, and loan and line of credit calculator. These online tools help customers figure out what size of mortgage to apply for, whether their monthly payments are affordable, and other important issues.

Top 5 Money Problems Canadians Face Today

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The amount of debt accumulated by Canadian households has skyrocketed to $2.16 trillion in 2018. And while borrowing has cooled due to the new mortgage rules, many Canadians live beyond their means and have credit history problems as a result of this.

Canadians Live Beyond Their Means

A survey conducted by the Canadian Payroll Association reveals that around 48 percent of Canadians live paycheck to paycheck. This is a troubling fact which shows that many people are financially vulnerable. Cheap credit partly explains why half of the respondents do not have an emergency fund for a rainy day. Yet, the fact that many Canadians spend their entire earnings and borrow on top means that they live beyond their means. A recent survey by the Canadian Imperial Bank of Commerce confirms this. The survey shows that 50 percent of respondents are unwilling to downgrade and trim unnecessary and non-essential spending. This is a worrisome finding in light of the fact that essential expenses such as rent and groceries already eat up a large percentage of households’ disposable income.

People who live paycheck to paycheck often carry a balance and only pay the minimum. Many have multiple credit cards and other debt such as personal loans and mortgages. They never set a monthly budget and short – and long – term financial goals. The problem with living large is that many people are unable to save at least 5 percent of their disposable income. This puts them in a vulnerable position when faced with a major crisis such as loss of income or employment, divorce, or prolonged illness. Then many are forced to resort to high-interest rate loans to pay bills and make ends meet.

Using Payday Loans

A survey by the Financial Consumer Agency shows that 4.3 percent of Canadians resorted to payday loans in 2014, up from 1.9 percent in 2009. The majority of respondents or 45 percent borrowed to pay emergency expenses such as car or household repairs while 41 percent used the money to pay expenses such as electricity, water, and heating bills. And while 70 percent of respondents used their paycheck to pay off the balance, 7 percent of people admit that they took a new loan. Others used their credit card, sold something of value, used an overdraft, or borrowed from family or friends. One of the main problems is that many people are not aware of the fact that payday loans come with very high interest rates. Some 43 percent of respondents admitted that they were not aware of this. The majority of respondents or 88 percent reported that they were unable to access a line of credit. Poor credit rating and history are major obstacles for many borrowers who are forced to resort to costly alternatives.

Accumulating Too Much Credit Card Debt

According to an Ipsos poll, Canadians owe over $8,530 in consumer debt on average, and 14 percent of respondents carry balances between $10,000 and $24,999. It is obvious that Canadians tend to accumulate excessive card debt, and data by Bankruptcy Canada confirms this. Some 75 percent of people carry a balance on a monthly basis while 25 percent pay it in full. The problem with credit cards is that many opt for products with high interest rates just to take advantage of complimentary bonuses, discounts, and rewards points. Many are also tempted to make card purchases just to collect points.

Credit History Problems

A good score is one in the range of 660 – 700 but data by Refresh Financial reveals that some 20 percent of Canadians have scores that are below 600. Data by Equifax Canada shows that close to 3 percent of borrowers have a very low score below 520, which puts them in a high-risk category. At the same time, this is not surprising given that 65 percent of Canadians check their score once a year or have never bothered to check it. What is more, people of working age hold 2.2 credit cards on average. Card debt also makes for about 5 percent of the total debt carried in Canada. The problem is that it accounts for 15 percent of all monthly payments and increases to 88 percent if borrowers were to pay off the balance in full.

Poor credit rating is a serious problem for many Canadians because it leaves them with few options for accessing new credit. Brick-and-mortar financial institutions are often unwilling to approve customers with financial problems as they are viewed as less trustworthy. In times of financial hardship, life crisis, or emergency, borrowers with poor credit are forced to resort to payday lenders and pawnbrokers. And the problem is that this often leads to a spiral of debt.

Making Poor Financial and Investment Decisions

Purchasing Decisions

Bad financial decisions are usually the result of poor money management skills and lack of financial literacy. People who are financially literate have good knowledge of basic concepts such as net income, annual percentage rate, amortization, compound interest, certificates of deposit, etc. People with poor money management skills lack basic knowledge and make bad purchasing decisions. They tend to splurge and buy non-essential items such as alcohol, tobacco, and candy even when they are short on cash. Many people cannot prioritize and tell the difference between non-essential and essential spending. Examples of essential expenses include things such as baby items, laundry, health-related expenses, rent, and utility bills. The list of non-essential expenses, on the other hand, includes items such as video games, haircuts, lottery tickets, dry cleaning, vacations, etc. These are things that people normally can live without. Many people make poor purchasing decisions like buying on credit and buying items they don’t really need. They also tend to make impulse purchases that they cannot really afford. Some people also buy expensive things just to show off, whether it is a new phone or laptop, vacation abroad, or a luxury vehicle. Outdoing family, friends, or colleagues is a poor idea, especially for people who live from paycheck to paycheck and buy expensive items on credit.

Investment Decisions

Many people also make poor investment decisions, and the main reasons are that they set the wrong investment goals and have a lower risk tolerance than they think of. Persons who have low risk tolerance and basic knowledge are usually advised to invest in products such as municipal bonds, certificates of deposit, and savings accounts. Those with extensive experience and high risk tolerance often benefit from investing in products such as hedge funds, penny stocks, and futures and options. Other products that help savvy investors to make good profits include leveraged ETFs, junk bonds, spread betting, venture capital trusts, and unregulated collective investment schemes. While high-risk products offer high returns, they are a good choice for people with knowledge of advanced concepts such as contingent deferred sales charge, capital gains reinvest NAV, dollar cost averaging, and Lipper ratings. Finally, savvy people know the difference between short-term and long-term investments. Short-term products include municipal bonds, short-term bond funds, and certificates of deposit. Long-term products are real estate, long-term bonds, real estate crowdfunding, and real estate investment trusts.

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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Top 5 Student Credit Cards for Young Canadians

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Young Canadians usually have a more limited exposure to credit, which makes it more difficult to get approved for unsecured loans and specialty credit cards. The good news is that issuers offer student cards that are specially designed for young people enrolled in college.

Options Available to Young People

Young Canadians have several options to look into, including department store, secured, prepaid, and student credit cards. Secured cards require that customers first make a deposit and then use the money to pay bills and make payments. This is one option if you want to build credit. A department store card is another option that gives you access to exclusive promos and deals but the rate is often higher compared to standard cards. A prepaid card is a third option that works much like a standard debit card and payments are not reported. A student credit card is also an alternative, and there are perks such as cash back incentives, no annual fee, and discounts on school-related items and purchases.

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What Are the Benefits of Student Credit Cards

Student credit cards offer a number of benefits, among which additional protection in the form of zero fraud liability, miles, cashback points and other incentives, and lower credit limits. Many issuers also offer convenient tools to save users valuable time, help them stay current on their payments, and avoid penalty interest and negative impact on their credit score. Such tools are, for example, automatic bill payment, spend analyzer, and others.

How to Apply

It is easy to apply for a student card if you meet the requirements. Many issuers offer online applications and ask customers to provide employment, personal, and financial details such as your social insurance number, mother’s maiden name, whether you are a landed immigrant or Canadian citizen, and whether you are a domestic or foreign student. You may be asked to provide information such as your expected graduation date, program start date, whether you apply on your own or together with a co-signer, etc.

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Fees to Watch for

Like other credit cards, student cards come with fees such as penalty interest, annual fee, cash advance fees, foreign currency conversion fees, and others. If you find good deals with no annual fee, this is a great way to save on charges. There are other fees to check for with your issuer, including late payment and over-the-limit fees, replacement, lost, or emergency issue card charges, and additional cardholder fees. The latter is usually $0 on no annual fee, low fee, and low rate credit cards. Fees and charges vary from one bank to another and can be different for business and individual cards. Some issuers charge fees for urgent card delivery as well as balance transfer fees, overdraft fees, surcharges, and so on. Make sure you check with your provider to ensure there are no hidden charges and penalties.

Top 5 Student Credit Cards

Many credit unions, banks, and online services offer student cards, including CIBC, Laurentian Bank, Desjardins, and others. If you are a regular customer and have a savings or checking account or an outstanding balance, it pays to check with your bank first.

#1. No-Fee Scotiabank Value® Visa Card SB

Scotiabank features a handy student card with card protection and introductory rate of only 3.99 percent. The introductory rate is for both cash advances and balance transfers, and makes it a good choice if you need to consolidate high-interest credit card balances. The card also offers car rental discounts, itemized transactions, and free supplementary cards. All in one this is a great student credit card choice.
• Annual fee: none
• Interest rate: 16.99 percent
• Credit limit: $500 (min)apply

#2. Tangerine Money-Back Credit CardMoney-Back Credit Card

The Tangerine Money-Back Credit Card is a great choice for students, as it doesn’t have annual fee, and is actually one of the top cashback credit cards in Canada. The card offers 2% money back in many categories, and 1% on everything else. However for a limited time you can get 4% cashback in the 2% categories for the first 3 months. The card has no limit on the amount of cashback rewards you can earn.
• Annual fee: none
• Interest rate: 19.95 percent
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#3. Desjardins VISA® FOR STUDENTS ONLY Credit Carddesjardins-students

Also a great choice to start building credit, VISA for Students Only comes with handy features such as free-of-charge access to credit reports, travel insurance covering the first 3 days of each trip, mobile device insurance, and more. Cardholders benefit from additional perks such as flexible financing, no annual fee on additional cards, payment reminders, and the option to manage their account from their tablet, mobile device, or computer. There are additional features such as generous Hertz discounts, mobile payments, and no transaction fees.
• Interest rate: 12.9 percent
• Annual fee: $30

• Interest rate: 19.9 percent
• No annual fee

#4. Laurentian Bank Student VISA® Black Cardvisa_laurentian

Laurentian Bank also features a student VISA card with perks such as exclusive discounts, free additional cards, and more. In addition to virtual mail statements, customers also benefit from convenient payments at bank branches, online, by phone, and by mail. This product is a great choice to build credit if you are studying aboard and are a full-time student. You can use it to make payments in emergency situations or pay daily and small expenses. If you usually maintain a balance, you may want to look into other options.
• Interest rate on purchases: 19.99 percent
• Monthly fee: none

#5. CIBC Aventura® Visa* Student Cardcibc-student

CIBC Aventura is another student card that offers the option to collect rewards points and features benefits such as accident coverage, travel medical insurance, mobile and online banking, authorized spending limits, and a lot more. Customers are free to use the online banking system to request additional cards, increase their limit, and make payments. The first purchase earns 5,000 rewards points. Cardholders also earn 2x bonus points on travel purchases at the CIBC Rewards Centre and 1 bonus point on regular purchases.
• Interest rate on purchases: 19. 99 percent
• Annual fee: $39
• Up to 3 free additional cards

#6. MBNA Rewards MasterCard® credit card for Studentsmbna-student

This student credit card is yet another option if you are new to credit and offers immediate cash access, online account access, and unlimited rewards. Each dollar spent brings 1 rewards point. You can redeem points for charitable donations, money back, gift cards, travel purchases, and brand-name merchandise. To apply online, college students are asked to provide information such as date of birth, SIN (optional), monthly payment and housing status, employment status (unemployed, self-employed, retired, homemaker, employed, etc), and other financial and personal information.
• Interest rate: 19.99 percent
• Grace period: 21 days
• No annual fee

Conclusion

As you can see, big banks and other major issuers offer plenty of choice to help you build a solid credit history and stay current on utility and other payments. A student credit card is a handy tool if you make payments by the end of the grace period. Just make sure you check for transaction fees such as cash equivalents, over-the-counter cash, and ATM fees, account fees, and other charges. Ask about the default rate in case you are late on your payments because penalty charges can be considerably higher. If you have a credit card with high interest charges, there are student cards with a balance transfer option to benefit from a lower interest rate. Ask about the promotional rate as well and the amount you can request if you choose to make a balance transfer.